 "Shivinder Singh and Malvinder Singh")
Malvinder Singh and Shivinder Singh, former promoters of Ranbaxy Laboratories Ltd, submitted their objections before the Delhi High Court on Monday with regard to the enforcement of Rs 2,562-crore penalty that the Singapore tribunal had awarded in favour of Daiichi Sankyo.
Daiichi had approached the Delhi High Court earlier this year seeking enforcement of the arbitral award, as well an additional sum of Rs 1,000 crore in interest payments and lawyers fees incurred in association with the proceedings.
The international award comes in the backdrop of arbitral proceedings initiated by Daiichi against the Singh brothers in relation to their 2008 purchase of a majority stake in Ranbaxy.
Daiichi had alleged the concealment and misrepresentation of critical information regarding US Federal Drug Administration and Department of Justice proceedings against Ranbaxy, which cost the former $500 million in settlement fees in 2013.
On May 24, Daiichi sought an interim order from the Delhi High Court to secure assets of the Singh brothers, expressing concerns over possible alienation or disposal of assets, which could frustrate the enforcement of the Singapore award.
The court had refused to grant Daiichi the relief, on assurances made by former Ranbaxy promoters that they would keep assets ready in order to pay the demanded sum (totaling Rs 3,562 crore), subject to the final determination.
The Singh brothers are majority shareholders in RHC Holdings, a company that controls Fortis Healthcare and Religare.
In Monday’s hearing, senior advocate Harish Salve, appearing on behalf of the Singh brothers submitted that “substantive questions” exist, which make the award incapable of enforcement under Indian arbitration laws.
Section 48 of the Arbitration and Conciliation Act 1996 provides for the conditions of enforcement of foreign awards and lists circumstances where an international award may be refused by an Indian court.
Salve challenged the Singapore tribunal’s entitlement to award consequential damages while also accusing Daiichi of withholding documents in the international proceedings, which showed their knowledge of the inquiries against Ranbaxy before the date of the acquisition.
The arbitral award in question has also been challenged in Singapore by the former Ranbaxy promoters.
After hearing the objections made, Justice Manmohan Singh asked Daiichi to submit its responses on the next date of hearing. Details of Malvinder Singh’s assets were also submitted to the court in a sealed letter on Monday.
The court directed the other respondents in the proceedings to submit details of assets owned as well and has listed the matter for further hearing on 28 November.
