More than three decades after the Gandhi family divided the Vadilal business, the agreement that was meant to bring lasting peace has once again become the centre of a legal battle.

The Mumbai branch of the family has approached the Bombay High Court, seeking to prevent the Ahmedabad branch from interfering with its manufacture, sale, distribution and marketing of Vadilal-branded ice creams and juices.

The dispute revolves around a 1993 family settlement under which the Mumbai branch claims it was granted perpetual and irrevocable rights to use the Vadilal brand for these products across Maharashtra, Goa, Karnataka, Kerala and the erstwhile undivided Andhra Pradesh.

According to the petition, the Mumbai group alleges that the Ahmedabad branch has sought to undermine its business through trademark litigation, product recall demands and factory inspections. The Ahmedabad branch, however, has defended its actions by citing repeated quality control concerns, alleging that products manufactured by the Mumbai entity showed microbiological contamination, thereby violating the terms of the registered user agreement governing the brand.

The disagreement is only the latest chapter in a dispute that has simmered for years across multiple legal forums. While the immediate battle concerns trademark rights, territorial control and quality standards, it also reflects the deeper complexities that often emerge when large family-owned businesses attempt to divide ownership while continuing to share a common legacy.

And that is perhaps the bigger story. Vadilal’s legal battle is not simply about who gets to sell ice cream under a familiar brand name. It is another reminder that for many of India’s family-run businesses, succession remains one of the most difficult challenges, with consequences that can outlast the founders by decades.

Why Succession Matters Far Beyond The Family

The Vadilal dispute may involve one business family, but the implications extend much further. Family-owned enterprises are the backbone of India’s economy, contributing more than 75% of the country’s GDP – one of the highest shares anywhere in the world. From manufacturing and pharmaceuticals to retail, automobiles and infrastructure, some of India’s most successful companies continue to be controlled by founding families.

That makes succession far more than a private family affair. When disagreements over ownership or leadership spill into the open, the impact is rarely confined to the promoter family. Employees face uncertainty, strategic decisions are delayed, investors grow cautious, and listed companies can find themselves battling governance concerns instead of focusing on growth.

The challenge often follows a familiar pattern. The first generation builds the business through vision and perseverance. The second generation expands and professionalises it. By the third or fourth generation, however, ownership is spread across multiple branches of the family, each with its own expectations and ambitions. Without clearly defined succession plans, questions over leadership, control, inheritance and decision-making can quickly turn into prolonged legal and corporate battles.

That is precisely why succession has become one of the defining governance challenges facing Indian family businesses. As these enterprises grow larger and more institutionalised, ensuring a smooth transition between generations is no longer just about preserving a family legacy; it is about protecting companies that employ thousands, serve millions of customers and contribute significantly to India’s economic growth.

Learning From The Past – The Reliance Approach

Not every Indian business family has chosen to leave succession to chance.

Perhaps the most closely watched example is Reliance Industries, where Mukesh Ambani has spent the past few years putting in place a structured transition plan for the next generation. Rather than waiting for a leadership vacuum to emerge, the conglomerate has gradually assigned clear operational responsibilities to each of his three children. Akash Ambani leads the group’s technology and telecom businesses, Isha Ambani oversees its retail and consumer ventures, while Anant Ambani is spearheading the energy and new energy businesses. The three have also served on the company’s board as part of a carefully phased transition.

What makes the Reliance approach particularly significant is the philosophy underpinning it. Having experienced the bitter split that followed the death of Dhirubhai Ambani and eventually led to the division of the Reliance empire between Mukesh and Anil Ambani, the family has openly acknowledged the importance of planning ahead.

At the company’s recent annual general meeting, Mukesh Ambani reiterated that Reliance would remain “one single indivisible” enterprise, describing his three children as “three bodies, one soul” while noting that the transfer of day-to-day management is now almost complete.

Whether that model ultimately succeeds will only become clear over time. Succession plans are tested not when they are announced, but when leadership is actually transferred. Yet Reliance illustrates an important shift in thinking.

Increasingly, India’s largest family businesses are recognising that succession cannot be treated as a private understanding reached behind closed doors. It requires formal planning, clearly defined roles, transparent governance and a long-term institutional vision that extends beyond any one generation.

The Cost Of Getting Succession Wrong

The Vadilal dispute is still playing out in the courts, and it remains to be seen how the latest round of litigation will ultimately be resolved. But regardless of the legal outcome, the episode offers a broader lesson for India’s family-owned enterprises.

Succession is no longer simply about deciding who inherits the business. It is about creating governance structures that can survive beyond the founding generation. As businesses grow larger, attract public shareholders and become integral to supply chains and the wider economy, the consequences of unresolved family disputes extend far beyond the promoter family itself.

For founders, the challenge is not merely to build successful businesses but to ensure they can endure across generations. That requires moving beyond informal family understandings towards clearly defined ownership structures, professional management, independent boards and transparent succession plans.

India is home to some of the world’s oldest and most successful family-run enterprises. Many have demonstrated extraordinary resilience and entrepreneurial vision over decades. Yet as a growing number prepare for generational transitions, the question is no longer whether succession planning is necessary, but whether it is being undertaken early enough.

The legal battle over the Vadilal brand may have begun with a disagreement over rights, territories and trademarks. In reality, it reflects a challenge confronting family businesses across the country: preserving not just wealth, but unity, continuity and institutional stability long after the founders have stepped aside.