Nykaa, a prominent beauty and cosmetics retailer led by Falguni Nayar, has initiated legal action against its former Chief Business Officer, Gopal Asthana. Asthana, who is now the CEO of Tata Cliq, stands accused of breaching confidentiality and misappropriating proprietary data from Nykaa. The legal dispute also includes claims of harming Nykaa’s business by allegedly poaching former employees.
The dispute revolves around an appointment letter dated 11th November 2019, as well as documents related to Employee Stock Option Plans (ESOP) and Optionally Convertible Redeemable Preference Shares (OCRPS), as outlined in the petition. Nykaa’s petition to the Bombay High Court highlights that it provided substantial remuneration to Asthana during his tenure.
Nykaa is seeking substantial financial compensation, specifically aiming to recover Rs 19 crore related to employee stock options that Asthana is alleged to have accessed improperly. Additionally, the retailer is pursuing Rs 5 crore in damages for the loss of goodwill and negative impact on business performance resulting from Asthana’s actions.
Nykaa has requested the court to issue an injunction to prevent Asthana from using any proprietary data obtained during his time at Nykaa in his current role at Tata Cliq. The case has progressed to arbitration, with the court designating Justice Akil Kureshi, former Chief Justice of the Rajasthan High Court, as the sole arbitrator. This move follows mutual agreement between the parties to resolve the issue through arbitration.
The Bombay High Court converted the Section 9 petition, which originally sought interim relief, into an application under Section 17 of the Arbitration and Conciliation Act, 1996. This shift means that the arbitration process will be overseen by Justice Kureshi, with both Nykaa and Asthana sharing the associated costs. The arbitration proceedings will take place in Mumbai.
Asthana joined Tata Cliq in June 2023 after departing from Nykaa. His career spans over two decades in the retail industry, including significant roles at Future Group and Shoppers Stop Ltd. Asthana’s tenure at Nykaa lasted for more than three and a half years, beginning in November 2019. His transition to Tata Cliq has now become the focal point of Nykaa’s legal claims.
Nykaa’s legal actions reflect the company’s commitment to protecting its proprietary data and business interests. The outcome of the arbitration will be keenly watched by industry stakeholders, as it could have broader implications for employment practices and confidentiality agreements within the retail sector.
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