McCormick involved in arbitration in UK over India venture

McCormick involved in arbitration in UK over India venture

McCormick & Co.'s dispute over a rice venture in India has moved to arbitration proceedings in the UK.

Kohinoor Speciality Foods India, the rice venture in which McCormick owns a majority stake, is an arbitration in London with the US spice and seasonings giant's partner in the business, the Indian food group Kohinoor Foods Ltd.

At the centre of the proceedings is a dispute over a rice sourcing contract between Kohinoor Speciality Foods India and Kohinoor Foods Ltd.

Reports in India suggest Kohinoor Speciality Foods India believes Kohinoor Foods Ltd. has been selling rice in the domestic market outside the venture, which goes against the venture's supply contract. In a statement McCormick provided to just-food, Kohinoor Speciality Foods India  alleges Kohinoor Foods Ltd broke the terms of the contract that centred on "non-compete obligations" and "trademark license matters".

Kohinoor Speciality Foods India decided last September to end its rice sourcing contract with Kohinoor Foods Ltd. and the arbitration proceedings are the latest stage in a dispute.

In a statement sent to just-food yesterday, Kohinoor Speciality Foods India said its decision to end the contract "was taken to protect its business and ensure a continuous supply of high-quality rice to its customers and consumers in India. KFL was informed of this move before implementation".

Last September, when Kohinoor Speciality Foods India moved to end the supply contract, Kohinoor Foods Ltd. said there was "no substance" behind the venture's decision to end the supply agreement. Kohinoor Foods Ltd. also claimed Kohinoor Speciality Foods India had itself broken the terms of the contract by not giving the Indian group "due notice". Kohinoor Foods Ltd. said it would be "taking all necessary steps to protect the interest of the company".

The Indian group has yet to comment publicly on the dispute going to arbitration.