GSG was the distributor responsible for the distribution of J&J products among the Super Market Chains Island wide.
The Johnson &Johnson India and has its registered office at in Mumbai India and also has a branch office/ place of in Sri Lanka. Johnson &Johnson India is part of the world wide US multinational Johnson &Johnson.
It has being observed that due to various reasons such as poor brand awareness through media, lack of some major product lines, lack of aggressive trade marketing support, the total sales were far below the promised given by the management of Johnson & Johnson, and above issues were beyond the management control of the local distributor.
The total sales, marketing and trade marketing operations were handled by the management of Johnson & Johnson (Sri Lankan office) and the primary function of the distributor were to provide the infrastructure, logistics and the collection of debtors from the supermarket channel.
Furthermore, it has being observed that the management of GSG has being communicating with the Johnson &Johnson  team continuously from 2014 that the operation was not profitable, however there were no proper actions were taken to rectify the situation.
Johnson & Johnson credo very clearly says “our final responsibility is to our stake holders. Business must make a sound profit. Reserves must be created to provide for adverse times”.  Considering the above and the way Johnson and Johnson management has handled the Sri Lankan modern trade distributor is absolutely disappointing and surprising due to the fact that Johnson &Johnson is very ethically driven global multinational.
An application for an interim injunction to prevent Johnson &Johnson from making claims for the years 2015 and 2016 under an agreement that lapsed in 2014 was stultified when Johnson &Johnson despite notice from Court rushed and filed its claim before the Indian arbitrator at 10.45 pm in the night before the was matter was to be decided by the Commercial High Court.
It is alleged by the Plaintiff that the arbitration commenced by Johnson &Johnson in India on the in respect of alleged claims arose in 2015 and 2016 after the Contract (which contains the Arbitration Agreement between them) had expired in 31st March 2014.
GSG take the position that, the Arbitrator does not have the jurisdiction. GSG has also claimed monies from Johnson &Johnson based on undertakings to compensate GSG for lack of products (such as baby cologne), short supply and promised reimbursements.
GSG also allege that, J&J has violated its own “CREDO” (which assures a level playing field for its distributors) by providing GSG a lower margin of return than the other distributor.
In a preliminary reply in the Commercial High Court, Johnson &Johnson &Johnson say that they have already filed their claim in the Arbitration in India. It transpired that, Johnson &Johnson had filed their claims at 10.30pm the very night prior to J&J appearing in Court.
Therefore, the crucial question now is whether the formal contract between GSG and Johnson &Johnson ended on 31st March 2014 or on 31st March 2016.
Johnson &Johnson are facing more and more litigation worldwide in connection with their products.
Issues of Corporate Governance and why Johnson &Johnson India has failed to follow global corporate policies and policies (CREDO) will be matters that will come up before the Commercial High Court.
GSG was represented by Anil Tittawell PC with Milinda Jayatilleke Attorney at Law instructed by Nithi Murugesu & Associates. J&J was represented by Thilini De Alwis Attorney at law instructed by Julius & Creasy.
The Commercial High Court directed J&J to file its answer to the plaint by the 20th of August 2016.