To enforce Rs 3,500-crore arbitral award that Japan’s Daiichi Sankyo won against Fortis promoters for hiding information during Ranbaxy sale
The Delhi High Court on Friday ordered attachment of all declared assets, except bank accounts, of Ranbaxy promoters Malvinder and Shivinder Singh in a proceedings initiated by Japanese pharma major Daiichi Sankyo for enforcement of a Rs 3,500-crore international arbitration award against the former in India.While reiterating its earlier order asking the Singh brothers to give “up-to-date” details of all their unencumbered assets, it also directed appointment of a chartered accountant to give valuation of assets by March 14, the next date of hearing. The court further directed the brothers to provide all documents required by the CA for valuation purposes.
Meanwhile, the Singh brothers, who are also the Fortis Healthcare promoters, filed an application seeking stay on enforcement of the award on the grounds that the appeal against the arbitration award is pending before the Singapore Court of Appeals and till then it’s not decided they are not liable to pay any money to Daiichi. Senior counsel NK Kaul, appearing for the brothers, argued that until the Singapore court takes a decision on their challenge to the award, the enforcement proceedings should be stayed. The proceedings in Singapore are expected to take place on April 9-13, he said. Last month, the HC had ordered attachment of assets of the brothers promoted RHC Holdings and Oscar Investments so as to enforce the award.
It had also restrained the two companies from operating their bank accounts, except for the purpose of payment of salaries and satisfying their statutory liabilities.
Daiichi had sought execution of the HC’s January 31 order that upheld the enforceability of the Rs 3,500-crore arbitral award passed against the brothers and others.
The Supreme Court had also dismissed the Singh brothers’ appeal against the January 31 order of the HC that allowed the Japanese drug maker to recover $500 million (over Rs 3,300 crore) from them as per the award by a Singapore arbitration tribunal in April 2016. Daiichi, which finally exited Ranbaxy in April 2014 by selling its stake to home-grown multinational Sun Pharmaceutical Industries, had filed the arbitration case in 2013 in Singapore. It had accused the Singh brothers of concealment and misrepresentation of facts and sought compensation for losses. Ranbaxy under the management of Daiichi had in 2013 paid $500 million to the US department of justice pleading guilty to the charges of felony.
In May 2016, Singapore’s arbitration tribunal asked the brothers to pay damages of `2,562.78 crore ($400 million) to Daiichi for concealing and misrepresenting information during their stake sale in 2008 to the Japanese firm. With interests and legal fees, the payable amount now comes to around `3,500 crore. Daiichi had then moved the Delhi HC for enforcement of the award to recover the damages from the brothers. However, the brothers challenged the petition.