TAFE locked in legal battle with US’ AGCO Corporation over use of tractor brand Massey Ferguson in India

Chennai-based Tractors and Farm Equipment Ltd (TAFE) is locked in a legal battle with US agricultural machinery manufacturer AGCO Corporation regarding the use of tractor brand Massey Ferguson in India.

On Monday, NYSE-listed AGCO ‘terminated’ several agreements with TAFE, including the licence agreement of the Massey Ferguson brand in the Indian subcontinent despite a stay order from the Madras High Court, prompting the Indian company to file a contempt of court petition against the former.

The latest development follows more than six decades of a commercial relationship between the two companies that has since turned sour.

“AGCO’s global brand website has historically made no mention of the Massey Ferguson brand in the context of India, Nepal and Bhutan having ceded the entire territory to TAFE since the takeover of Massey Ferguson India in 1960,” TAFE said in a statement.

AGCO, for its part, has blamed “inappropriate and unauthorised actions” by its partner as the reason for terminating the agreements.

Both AGCO and TAFE have now taken legal recourse.TAFE is the second largest tractor producer in India, after Mahindra & Mahindra. According to the company, it sells more than 180,000 tractors annually, includinh over 100,000 Massey Ferguson tractors produced in India. TAFE exports tractors to 80 countries globally.

TAFE has asserted its claims over the ownership of the Massey Ferguson brand saying it has produced, built and nurtured the brand since it acquired Massey Ferguson India in 1960. It cited court orders regarding the status of the brand. “The commercial court in Chennai has ruled in favour of TAFE with an interim status quo order with respect to the Massey Ferguson brand. It is therefore impermissible for either party to disturb the position as on April 29, 2024, and any attempt to do so will be in violation of the court orders,” the company said in a statement. The company added that it has filed a contempt petition against AGCO in Chennai.

TAFE and AGCO have had a close alliance for more than six decades, with the Indian company even acquiring a stake in the US manufacturer in 2012. TAFE has since gone on to become the single-largest shareholder and strategic long-term investor in AGCO. “This strengthened the collaborative relationship between the companies and TAFE and AGCO signed ‘Letter Agreements’ that have for over a decade assured AGCO of steady support,” said the TAFE statement.

However, differences have been brewing between the partners for some time regarding the US company’s performance. “As TAFE’s strategic influence increased, rather than address issues plaguing AGCO that have repeatedly been called attention to, including flaws with AGCO’s corporate governance, wholly inadequate engagement with shareholder and financial and operational performance in key areas, AGCO has sought to stifle TAFE’s ability to seek changes through contentious and ill-advised moves with respect to brand usage that has for over six decades been an uncontested area”, the Indian company said.

In a press statement, on Monday, AGCO, on its part, clarified that the latest termination is separate from notices issued in April, which pertained to the termination of certain commercial licences. After the termination notices were issued in April, TAFE sought relief in a Chennai commercial court. The court, in its 28 April order, granted TAFE temporary relief, allowing the company to continue using the Massey Ferguson trademark while the dispute is under review.

In its plea, TAFE argued that the termination was abrupt, executed without notice, and followed a 25 April AGCO board meeting. TAFE claimed that the termination was carried out in bad faith and could disrupt global commercial transactions. TAFE also emphasised its substantial investment in marketing and developing the Massey Ferguson brand over the past six decades.

The company expressed concern that any public statements from AGCO could cause industrywide panic and harm Indian farmers who rely on TAFE’s Massey Ferguson-branded tractors.

TAFE had earlier stated that it was considering seeking damages, accusing AGCO of acting in bad faith and jeopardising both companies’ commercial interests.

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