Nykaa Fashion initiates legal proceedings against former CBO over alleged data theft

Nykaa Fashion, a leading Indian beauty and fashion retailer platform and a subsidiary of Nykaa, has taken legal action against its former Chief Business Officer (CBO), Gopal Asthana, accusing him of breaching confidentiality agreements, misappropriating proprietary data, and attempting to harm the company by poaching employees. The case was filed before the Bombay High Court, with Nykaa seeking financial compensation and an injunction to prevent further damage to its business.

Asthana, who served as Nykaa’s CBO from November 2019 until his recent switch to Tata Cliq, now holds the position of Chief Executive Officer at the competing platform. Nykaa alleges that Asthana used confidential information from his company to benefit Tata Cliq and recruited former Nykaa employees to join him over the past year. The company claims that this has negatively impacted its business metrics and reputation.

Nykaa is demanding the return of ₹19 crore in stock options and employee stock option benefits that Asthana received during his tenure, along with ₹5 crore in damages for the loss of goodwill and the adverse business impact caused by his actions. In addition to financial compensation, Nykaa seeks an injunction preventing Asthana from using its proprietary data at Tata Cliq.

The legal dispute took a significant turn during a recent court hearing. Justice Arif S. Doctor, presiding over the case, appointed former Rajasthan High Court Chief Justice Akil Kureshi as the sole arbitrator after both parties agreed to resolve the matter through arbitration. The court initially converted the Section 9 petition to seek interim relief into an application under Section 17 of the Arbitration and Conciliation Act, 1996. The arbitration will be conducted in Mumbai, with both parties sharing the costs equally.

Asthana, represented by Senior Advocate Zal Andhyarujina, did not oppose Nykaa’s request to amend its petition but reserved the right to challenge the amendments later. He also agreed to comply with interim protection orders on a “without prejudice” basis, ensuring his current role at Tata Cliq is not immediately affected.

Nykaa’s legal team, led by Senior Advocate Navroz Seervai, emphasized the urgency of interim relief to prevent further misuse of confidential data. The arbitration process, overseen by Justice Kureshi, may be extended by six months if necessary, as both parties work towards resolving the complex dispute.