Asia Securities and Asia Capital Stockbrokers go for out of court settlement

Thursday, 18 May 2023 04:38 - - {{hitsCtrl.values.hits}}

Asia Securities to retain sole use of ‘Asia’ name in stockbroking; Asia Capital opt for name change

Asia Securities Ltd., and Asia Capital this week opted to go for an out of court settlement over the litigation filed by the former against the latter’s decision to use the word “Asia” to its stock broking arm.

The parties have discussed and reached a settlement in the matter and the Plaintiff and the 1st and 2nd Defendants entered Terms of Settlement when the case was taken up on 16 May, with Asia Capital Stockbrokers (Pvt) Ltd undertaking to change its name on or before 16 June. Based on the said undertaking, the High Court vacated the two Enjoining Orders and permitted the 1st Defendant to trade on the Colombo Stock Exchange until 16 June.

In addition, under the Terms of Settlement, both the 1st Defendant, Asia Capital Stockbrokers, and the 2nd Defendant, Asia Capital have undertaken to not use the word ‘Asia’ or any derivation of it, in any venture in the stockbroking business as a trademark or tradename in the future.

Avindra Rodrigo P.C. with Christina Hettiarachchi instructed by FJ&G de Sarams appeared for the Planitiff, and Dinal Philips P.C. with Heshan Thambimuttu instructed by H. Chandrakumar de Silva appeared for the 1st and 2nd Defendants.

Asia Capital Holdings Director Raju Radha said shareholders were earlier split on the name of the broking firm but subsequently it was resolved.

Following the agreement, the two enjoining orders issued by the Commercial High Court were revoked and Asia Capital’s subsidiary has resumed business.

Commercial High Court Pradeep Hettiarachchi’s orders were to prevent Asia Capital Stockbrokers, and Asia Capital PLC from using the word ‘Asia’ or any derivation of it, in any venture in the stockbroking business as a trademark or tradename and further enjoining Asia Capital Stockbrokers from trading on the Colombo Stock Exchange as a stockbroker using in its name the words ‘Asia’.

Asia Capital, being a former shareholder of the Plaintiff Company, undertook not to utilise the Trademarks of the Plaintiff or any derivations of it or the words “Asia Securities” or “Asia” in any business venture carried out by them or their Affiliates, when selling their shares in the Plaintiff Company.

Since the sale, the Plaintiff has become a leading stockbroker in Sri Lanka, being ranked as the No. 1 stockbroker in Sri Lanka this year by the CSE in terms of exchange trading turnover and has won many accolades and awards, resulting in its name being associated with goodwill and reputation.

The Plaintiff stated that several years after the sale, Asia Capital acquired another stockbroking firm by the name of ‘Nawara Securities’ and changed its name to Asia Capital Stockbrokers, acting in contravention of these contractual obligations. As a result, Asia Capital Stockbrokers, issued an Undertaking that it would change its name and until such time will not carry on any business in direct conflict with the Plaintiff.

However, contrary to its undertaking and several assurances given since then, the Plaintiff alleges that Asia Capital Stockbrokers, continued to trade on the CSE and carry out business activities without changing its name as promised, constituting an act of unfair competition infringing their intellectual property rights.