In a big setback to former Ranbaxy promoters Malvinder Singh and Shivinder Singh, the Supreme Court of Singapore has dismissed their appeal seeking quashing of the Singapore High Court’s order that upheld the Rs 2,500-crore arbitration award in favour of Japanese pharma major Daiichi Sankyo.
With this, Daiichi can now initiate recovery proceeding in Singapore as well. The Japanese firm is already pursuing the enforcement of Rs 3,500 crore arbitration award, including interest against the Singh brothers, pronounced by the Singapore tribunal for concealing information regarding wrongdoing at Ranbaxy Laboratories while selling it to it for $4.6 billion in 2008.
Counsel Amit Mishra from P&A, the law firm which represents Daiichi, welcomed the development. “The judgment of the Singapore SC brings to an end all appeal related proceedings against the arbitration award. We are sure that the enforcement of the award in India will now gain pace,” he said.
Rejecting the Singh brothers’ plea, the Singapore Court of Appeal comprising Chief Justice Sundaresh Menon, Judge of Appeal Judith Prakash and Judge Quentin Loh on Thursday said that “this is completely inapplicable to arbitration where the principle is that of limited curial intervention. Broad and general arguments based on unconscionability or potential repercussions of general fairness before a court will be given short shrift…
Accordingly, we reject all three grounds raised by Singhs premised on the finding of joint and several liability.”
It also imposed costs of $1 lakh and $90,000 on Malvinder and Shivinder, respectively.
Refusing to accept the stand of the estranged brothers that an egregious error of law in the making of an award amounts to a breach of public policy and the finding of joint and several liability is such an error, Judge Quentin Loh, while delivering the judgment, said that it is a settled jurisprudence that mere errors of law do not cross the high threshold of making out a breach of Singapore’s public policy.
It said that Shivender’s arguments ‘were redolent of an attempt to recast an “egregious” error of law as a matter of public policy. This is something this court has taken a firm stand against and rejected since 2007.’
The Supreme Court of India had also in November last year held both the brothers guilty of contempt for violating its earlier orders that had restrained them from divesting their shares in Fortis Healthcare. However, it had given them one more chance to purge themselves of the contempt if each of them deposited Rs 1,170.95 crore within eight weeks. It also said that Singhs would be heard later on the quantum of sentence.
The Singh brothers are currently lodged in Tihar jail in connection with the case filed by Religare FinVest (RFL), a financial services arm of Religare Enterprises(REL), for allegedly causing wrongful loss worth Rs 2,397 crore.
Daichii had started arbitration proceedings in Singapore in 2013 against the brothers alleging misrepresentation and concealment of material facts during the takeover. The Singapore arbitration tribunal in April 2016 while holding the former promoters of Ranbaxy as liable for fraud had asked them to pay Rs 3,500 crore as damages and interest to drug firm Daiichi.
While Daichii had sought enforcement of the award before the Delhi High Court, the Singhs had also challenged the tribunal’s award in the Singapore High Court. The brothers lost the case in both the courts. Even the Supreme Court of India had refused to interfere with the Delhi HC judgment in 2018.