Delhi High Court refuses to halt Allchem IPO; refers trademark case filed by Alkem labs for mediation

The Delhi High Court on Thursday refused to halt Allchem Lifescience Limited from going ahead with its upcoming Initial Public Offering (IPO). .Justice Amit Bansal declined to pass any interim order against the IPO while hearing a trademark infringement suit filed by Alkem Laboratories against Allchem. Alkem is also a publicly traded company.The judge recorded Allchem's undertaking that in all future communications including the ones pertaining to IPO, Allchem will clearly state that it has no connection with Alkem. "Mr Kunal Tandon appearing for the the defendants (Allchem) states that in all future communications including the one pertaining to IPO, it shall clearly be stated that defendant company has no connection with plaintiff company," the Court noted in its order.Allchem was directed to state that it will have no association with Alkem going forward."Mr. (Sandeep) Sethi (Alkem's counsel) has drawn our attention to a communication, wherein the defendant has specifically stated that they shall not use the current trade name within B2C domain," the Court recorded.It further noted Allchem's submission that its business is different from Alkem's."In various communications, defendants have said that they provide raw materials for Active Pharmaceutical Ingredients (API) and (do) not directly deal with pharmaceuticals. In the event they do so, plaintiff (Alkem) can move an application," the Court stated.The case was then referred to the Delhi High Court Mediation Centre for mediation after both the parties consented to the same.Senior Advocate Sudhanshu Batra was appointed as mediator..Represented by Senior Advocate Sandeep Sethi, Alkem argued that Allchem's listing would create confusion in the minds of the public and could even lead to financial loss. He thus argued that the company cannot go ahead with the IPO without making changes to their name. .Senior Advocate Kunal Tandon, who appeared for Allchem, argued that while Alkem is a pharmaceutical company, Allchem provides raw materials for manufacturing Active Pharmaceutical Ingredients (API). Thus there is very little scope for confusion in the minds of the public. Tandon contended that the companies have worked together in the past and Allchem had in fact approached Alkem in December to include their name in their list of clients though Alkem refused. Further, he argued that Allchem filed its Draft Red Herring Prospectus (DRHP) in March, however the company has filed the suit in late April. .The case will now be taken up by the court after the mediation report is received. .Allchem Laboratories Limited has filed draft papers with the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). The IPO comprises a fresh issue of equity shares worth ₹500 crore and an offer for sale (OFS) of up to 1.2 crore shares by existing shareholders. Proceeds from the fresh issue will be utilized for debt repayment, working capital requirements and general corporate purposes. Allchem, a leading player in the specialty chemicals and pharmaceutical intermediates sector, aims to strengthen its market position and expand its manufacturing capabilities through this public offering..Alkem Laboratories Ltd. Was represented by Cyril Amarchand Mangaldas, IP Head & Partner Swati Sharma; Director - Patents, Gitika Suri and Associate, Akshit Singla along with lawyers of Sagar Chandra & Associates Sagar Chandra, Ishani Chandra, Shubhie Wahi, Sanya Kapoor and Mehek Dua..Tandon was briefed by a team from Bharucha & Partners comprising Partner Kaushik Moitra, Counsel Karnika Vallabh and Senior Associate Subhalaxmi Sen.