TAFE takes AGCO to court for failing to honour court order

TAFE, one of the biggest tractor makers in India, has filed a contempt case against AGCO, the US tractor maker, for trying to wrest the Indian company’s rights to use the Massey Ferguson brand in India.

The contempt case has been filed claiming that the US company has not honoured the Madras High Court’s status quo order issued earlier this year. The order had directed both parties to preserve their respective position as it existed on April 29 this year.

TAFE (Tractors and Farm Equipment) – India’s second largest tractor maker – ended up acquiring the rights to manufacture and sell Massey Ferguson tractors in India in the 1960s. 

The partnership began when TAFE collaborated with Massey Ferguson to produce tractors locally, allowing them to tap into the growing Indian agricultural market. 

Over the years, TAFE has expanded its manufacturing capabilities and continues to produce Massey Ferguson-branded tractors. The collaboration helped both TAFE and the Massey Ferguson brand establish a strong presence in the Indian agricultural sector.

TAFE, part of the Chennai-based Amalgamations Group, has an annual production capacity exceeding 180,000 tractors, with over 100,000 Massey Ferguson tractors manufactured in India, and it has served more than three million customers, the Indian company said.

In 2012, TAFE acquired a stake in AGCO Corporation, and became its largest single shareholder and strategic investor. TAFE and AGCO have maintained 'Letter Agreements' over the past decade to ensure consistent support, the Indian company claimed.

In a statement last month, AGCO opposed many of the claims put forward by TAFE.

“As part of the company's continuing review of its business and operations, the company filed notice of termination of certain commercial agreements with TAFE in April 2024. This decision followed extensive discussions with TAFE over multiple years concerning TAFE's continued poor operational performance as a supplier, brand licensee and distributor to AGCO, as well as TAFE's continued lack of focus on AGCO customers in several key markets. 

“These discussions were held at multiple levels of the organization, including with Ms. Srinivasan over the past several years. Despite assurances from TAFE that these issues would be addressed, there continued to be a lack of meaningful progress. As a result of the termination notices, TAFE subsequently commenced litigation against AGCO in India, which remains ongoing today.

“AGCO and TAFE have always treated the commercial and business relationship as separate from the TAFE investment in AGCO and its representation on AGCO's Board. TAFE agreed to renew the limited standstill agreement with AGCO without conditioning it on the continuation of the commercial agreements, as it has always done since 2014 and notwithstanding the ongoing commercial issues being discussed,” it said.