Morepen files suit against DiaMed

Morepen Laboratories has filed a suit before the Delhi High Court against the Swiss-based DiaMed Scientific Laboratories, seeking an order restraining the latter from appointing any other dealer in India for distribution of its products here.

DiaMed Scientific Laboratories had in 2001 given exclusive rights to Morepen for marketing and distributing its products.

The contract was for seven years. However, in November this year, the company expressed its intentions to appoint one of its subsidiaries, DiaMed Scientific Technologies, as the distributor.

Ironically, the employees of DiaMed Scientific Technologies were earlier employed with Morepen Laboratories. In its suit, the Indian company has also sought a restraint order against DiaMed from utilising the contacts and database which Morepen had created through its ``aggressive marketing'' during the past five years while promoting the imported health care products.

According to Morepen the company's entire data of diagnostics division including the list of all the customers and clients along with cost sheet with import tariff, sales data and profitability statement since February 2001 are in possession with DiaMed's employees, who earlier worked with Morepen.

Justice Reva Khetrapal has already issued notice, following which DiaMed has filed a written reply in the court. The Swiss-based company has defended its decision of making Morepen a non-exclusive partner on the ground that the sales of its product were not upto the mark.

According to Morepen, DiaMed had on July 4, 2006, made the company a non-exclusive partner in India after the latter set up a subsidiary in Gurgaon in the name of DiaMed Scientific Technologies.

As per Morepen's petition, DiaMed had informed it about creating the subsidiary but the same was apparently to train the scientific and technical staff of blood transfusion centres and hospital laboratories.

DiaMed's intentions to market its products exclusively through its subsidiary were known to Morepen after its senior executives stumbled upon an e-mail of the Swiss company's scientific and business manager to its counterpart in Switzerland.

The mail apparently contained information regarding DiaMed's efforts to get a registration for DiaMed India.

Even as Morepen sought an explanation from DiaMed, the latter denied starting an exclusive distribution network in India. However, on November 8, the company terminated its contract without allegedly giving notice to Morepen.