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TOPIC:

Contract Act

Company Background

Unilever Limited, a leading multinational company, is a fast moving consumer goods (FMCG) company that operates in different locations all across Pakistan. Initially it produced soaps and margarine produced from oil and fats. Its operations in the country continued to expand further into the food industry and also increased investment in research and development for further growth. Although, It is now one of the world's top companies, but continues to focus its portfolio, and rationalize its businesses to focus on core products and brands.

The Case

Unilever sold its oil business to M/s Dalda Foods (Pvt) Limited for Rs 250 million in 2012. Later on both the companies made an agreement of non-competition. According to the agreement, Dalda Foods restricted Unilever to compete with it in oil businesses for the period of five years. Monopoly Control Authority of Pakistan issued a show-cause notice to the Unilever Pakistan Limited and termed this agreement as a violation of monopoly laws but Unilever Pakistan ignored this order and filed an appeal in the High Court.

REQUIREMENT:
You are required to discuss:

  • The kind of contract took place between the Unilever Pakistan and M/s Dalda Foods (Pvt) Limited. (10)
  • The act committed by the Unilever Pakistan in reference to the Monopoly laws. (10)

please Provide Solution...

Thanks


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Views: 2227

Replies to This Discussion

qno2 main act batana hai k kon sa act hai

monoply act ya competitive act 2010. main confuse hoon k koun sa act hai ye

act ka matlab?

 act committed by the Unilever Pakistan MEAN

It means you have to write some reasons in favor of "unilever" in which they are sure that they are doing well and similiar exception available in the law...like that

2nd part bhi discuss karein plzz ... 

ISLAMABAD (January 27 2007): Monopoly Control Authority (MCA) has served another show cause notice on M/s Unilever Pakistan Ltd for non-compliance to authority's order dated December 19, and the continued silence over MCA's notices.

Following hearings, MCA terminated Non-Competition Agreement between them and directed Unilever to return M/s Dalda Foods (Pvt) Ltd the sum of Rs 250 million, observing that the covenant constituted a restraint of trade and had the effect of lessening competition in the market.

According to details, M/s Unilever Pakistan Ltd and M/s Dalda Foods (Pvt) Ltd signed an agreement to transfer business, but later they also made another agreement of non-competition, under which, Dalda Foods was restricted to compete in vanaspati and oil businesses for the period of five years, in return of Rs 250 million. The authority termed this agreement as violation of monopoly laws.

Since, the Unilever did not responded to the authority's directives the authority issued them a reminder after the lapse of given timeframe.

The authority has issued again a show cause notice to M/s Unilever on January 26, providing them another opportunity to appear before the authority to clear their position for non-compliance of its orders. The official sources said that the authority reserves the right to take appropriate action against the company if it does not comply with its directives.

According to a press release, M/s Unilever Pakistan Ltd, sold the vanaspati and oils business other than margarine products to M/s Dalda Foods (Pvt) Ltd and executed a Non-Competition Agreement, in addition to the Agreement to transfer Business and received a sum of Rs 250 million for non-competition in vanaspati and oil business for a period of five years.

MCA's order dated December 19, 2006, terminated the Non-Competition Agreement with immediate effect and directed for refund of Rs 250 million to Dalda Foods (Pvt) Ltd, within 15-days of the order and report its compliance to the authority.

The order was dispatched to the undertaking, through registered A.D cover, vide letter dated December 19, 2006, but it failed to comply with the order of the MCA within the given timeframe. It further says, that Unilever was reminded vide letter dated January 11, 2007, to confirm compliance but it again failed to follow the order.

Since the failure of the undertaking attracts the provisions of sub-section (1) & (2) of Section 19 of the Ordinance, the MCA under the Chairmanship of Khalid A. Mirza decided to serve a show cause notice on Unilever under Section 19 of MRTPO 1970 on January 26, 2007, and the entity have been afforded an opportunity of being heard on February 9, 2007 at Islamabad.

does not understand one thing in the question. that dalda restricted unilever to not compete or dalda was restricted by unilever to non-compete.

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