The issue pertains to BigBasket’s acquisition of micro-delivery platform DailyNinja in March 2020. According to the suit filed by Town Essentials, it entered into an exclusive arrangement with DailyNinja in October 2017 to handle the entire sourcing, warehousing and backend supply of essentials for the delivery platform.
However, after the acquisition, BigBasket started moving customers of DailyNinja onto its own platform, BBdaily, without keeping Town Essentials in the loop, causing major losses to the business-to-business procurement partner, said the suit, a copy of which ET has seen.
Town Essentials approached the high court after a commercial court in Bengaluru directed DailyNinja and Town Essentials to take the dispute to arbitration. Town Essentials was worried that arbitration under its contract with DailyNinja would not cover BigBasket.
ETtech“The impugned order (of the commercial court) is set-aside and the application filed under Section 8 of the Arbitration and Conciliation Act is dismissed. The suit is restored. The parties are directed to appear before the trial court on June 12, 2023,” read the order by Justice Sreenivas Harish Kumar of the high court. ET has reviewed a copy of the order, dated May 24.
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Town Essentials in its plaint has sought a temporary injunction, restraining BigBasket from carrying on any micro-delivery business. It is also seeking a direction for BigBasket to procure all supplies from Town Essentials until the final disposal of the suit and more than Rs 36.22 crore in damages and losses.
The suit names BigBasket parent and linked entities Supermarket Grocery Supplies and Innovative Retail Concepts, along with cofounders Hari Menon and Vipul Parekh, as defendants and party to the suit.
Founded in 2002, Town Essentials is a multi-category grocery supplies platform and used to help B2B partners, as well as restaurants and hotels to procure their fresh produce.
BigBasket declined to comment on ET’s queries on the matter. A message to Menon, who is also BigBasket’s chief executive, went unanswered.
“We are glad that the high court has restored the suit filed against BigBasket entities. All efforts made by BigBasket to wriggle out of its obligations is turned down and now, based on the directions of the high court, the suit is listed on June 12, 2023 and Town Essentials will press its application for injunction against BigBasket,” Town Essentials director Amar Krishnamurthy told ET.
Founded in 2015, DailyNinja was a hyperlocal subscription-based delivery service of daily needs including milk and fresh fruits, and was backed by the likes of Sequoia Capital and Matrix Partners India.
The initial suit was filed by Town Essentials with the commercial court, Bengaluru, in August 2021 which referred the parties to arbitration by July 2022. The worry for Town Essentials was that if it goes with arbitration against DailyNinja, it would be fighting a battle with a company without any revenues or assets, given that its customers had been moved to BigBasket.
In its challenge before the high court, filed in August 2022, Town Essentials said that BigBasket and its directors, which were non-signatories to the agreement, could not be subjected to arbitration under the pact signed between Town Essentials and DailyNinja. However, the high court held also that BigBasket, having acquired DailyNinja, was bound by the agreement.
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