Exclusive: Why Fabindia was sued by founders of its subsidiary Biome
Shantanu and Sania Arora Jain allege Fabindia, which has a controlling stake in their firm Biome Life Sciences, breached the exit clause in their shareholder agreement from 2020. They are seeking ₹196.16 crore in lieu of their stake in Biome.
Mumbai, New Delhi: The co-founders of Fabindia Ltd's personal care subsidiary, Biome Life Sciences India Pvt. Ltd, have sued the apparel retailer in the Delhi High Court, seeking to enforce an exit clause they say value their shares at ₹196.16 crore.
Shantanu Jain and Sania Arora Jain, who launched Biome Life Sciences LLP in 2019 that came under the Fabindia fold a year later, said in their petition that the retailer has breached their shareholder agreement (SHA) by failing to honour a "put option" that entitled them to sell their stake under a pre-agreed formula. Biome houses Fabindia’s personal care line of FabEssentials face washes, moisturizers, shampoos, and fragrances.
- Biome Life Sciences co-founders, Shantanu Jain and Sania Arora Jain (who hold a 49.99% stake), are suing Fabindia to enforce a "put option" clause in their shareholder agreement (SHA).
- The founders allege that Fabindia breached the SHA by failing to honor the exit clause, which values their shares at ₹196.16 crore based on Biome's audited financials.
- The Jains have invoked the arbitration clause in the SHA. They also filed a petition in the Delhi High Court seeking an urgent order to compel Fabindia to deposit the full amount in an escrow account and to restrain the retailer from selling assets or diluting Biome's shareholding pending arbitration.
- Fabindia's spokesperson countered the allegations, claiming the founders had "neglected their responsibilities" and were guilty of "wilful misconduct and negligence."
- They argue the founders only raised the issue of the put option after being confronted with these alleged lapses.
- Both parties have nominated their respective arbitrators (retired Supreme Court judges), consenting to refer the core dispute to arbitration.
The Jains sought urgent interim relief under Section 9 of the Arbitration and Conciliation Act, requesting the court to direct Fabindia to deposit the sum in an escrow account, even as they pursue arbitration to secure their claim.
Origins
Shantanu has over two decades of experience in women’s personal care products and Sania is a biochemist trained at London's Imperial College, the petition said. They launched Biome Life Sciences LLP in 2019 to develop Ayurveda-based, science-backed personal care products. Their work caught the attention of William Nanda Bissell, Fabindia's managing director and former chairman. Bissell engaged the Jains first as consultants and later proposed a formal collaboration.
Biome Life Sciences India Pvt. Ltd was incorporated in May 2020, with Fabindia holding a controlling stake. According to the petition, the SHA between Fabindia and the founders included a put option, which allows the founders to sell their shares to Fabindia at a valuation based on revenue or Ebitda.
After a decline in business in FY24, Biome reported ₹21.6 crore in revenues from operations in FY25, per filings in the founders' petition, up nearly 28% year on year. Its profits after tax for the year were up more than 1.5x year on year to ₹7.1 crore. At the end of FY25, the founders held 49.99% stake in the company, while Fabindia owned the rest.
The dispute
In their court petition, the Jains alleged that while they took on active managerial roles, introduced new strategies, and developed products, Fabindia did not extend adequate support. In August this year, the Jains wrote to Fabindia that they wanted to exit, and valued their shareholding at ₹196.16 crore, based on Biome's audited financials.
According to the petition, Fabindia was obliged to complete the payment within 15 days, a deadline that passed on 11 September. Instead, they say Fabindia responded belatedly, raising disputes not contemplated under the contract. The petition argued that this conduct was “arbitrary and mala fide," designed to delay compliance, frustrate their exit, solely in an attempt to armtwist the petitioners.
On 20 September 2025, the founders invoked the arbitration clause in the SHA, issuing a notice and nominating their arbitrator as per the agreement’s procedure. The very next day, Fabindia appointed its nominee arbitrator, consenting to refer the dispute to arbitration.
On 24 September, the founders moved the Delhi High Court, which directed Fabindia to file its response in two weeks. The next hearing will take place on 19 November. Both parties have nominated retired Supreme Court judges as their respective arbitrators. They will now appoint a Presiding Arbitrator to complete the tribunal, lawyers for Biome's founders told Mint in an email.
In their court petition, the founders also asked the court to restrain Fabindia from alienating its assets, diluting Biome’s shareholding, or misusing Biome’s fixed deposits except for routine business operations. It also sought directions compelling Fabindia to disclose its assets, file Biome’s monthly financial statements, and maintain the current shareholding status of Bissell.
The founders argue that such measures are necessary to prevent Fabindia from "dissipating assets", diluting its stake in Biome, and rendering any arbitral award in their favour unenforceable.
Defence
Fabindia claims the founders had “neglected their responsibilities" and were guilty of “wilful misconduct and negligence." A Fabindia spokesperson said the company chose the Jains for their expertise, but claimed they “shrugged their responsibilities and raised the issue of put option" when confronted with lapses.
“With their respective qualifications and background, we chose them as a partner on their representations to expand the business to (the) next level," the spokesperson said. “Fabindia gave them a free hand in this venture by appointing them as managing director and COO of Biome. They were to perform duties with integrity, and conduct in best interests of the company. Over the period of time, there was dereliction of their duties along with wilful misconduct and negligence and serious lapses were noticed on their part. When confronted with these lapses, they shrugged their responsibilities and raised the issue of put option."
Founded in 1960 by American John Bissell, Fabindia now operates as a large private platform connecting over 55,000 rural artisans to urban markets. The business focuses on retailing textiles, garments, home decor, organic foods, and personal care products, and currently maintains a substantial presence with hundreds of stores in India and a few internationally. The company had earlier planned to list on the stock exchanges, but withdrew its plan in February 2023, citing uncertain market conditions, but noted it might reconsider a public listing in the future.
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