New Delhi: The Supreme Court on Friday rejected an appeal by former Ranbaxy Laboratories Ltd owners Malvinder and Shivinder Singh against an order of the Delhi high court allowing Daiichi Sankyo Ltd to recover Rs3,500 crore from them.
“We are not inclined to interfere. Our answer at the moment is no," said Justice Ranjan Gogoi.
On 31 January, the Delhi high court had allowed Daiichi Sankyo to enforce a foreign arbitral award ordering the Singh brothers and 13 others to pay about Rs3,500 crore to the Japanese drug maker. The Singh brothers approached the Supreme Court challenging this order.
“We respect today’s ruling by the Hon’ble Supreme Court of India. However, we are disappointed by the decision. The court decided not to go into the merits of the majority arbitration award. We maintain that there was no misrepresentation in the Ranbaxy deal to Daiichi Sankyo and these are false accusations against us made four years after Daiichi bought Ranbaxy," the Singh brothers said in an official statement.
They also said that they were evaluating the option to challenge the majority arbitration award in Singapore courts.
In a 115-page verdict, Justice Jayant Nath of the Delhi high court upheld the April 2016 award by an arbitration tribunal in Singapore which had ruled in favour of Daiichi Sankyo. The tribunal had directed the Singh brothers to pay about Rs2,563 crore in damages, plus interest of 4.44% per year from 7 November 2008 to the date of the award.
The court found the brothers guilty of making false claims in a self-assessment report and of fraudulently misrepresenting and concealing the “genesis, nature and severity of the US regulatory investigations" of Ranbaxy when Daiichi Sankyo bought their 34.82% stake for $2.4 billion in 2008. The total deal value was $4.6 billion.
The case relates to enforcement of an arbitral award in proceedings initiated by Daiichi Sankyo against the Singhs in relation to its 2008 purchase of a majority stake in Ranbaxy, then owned by the brothers.
The arbitral award came after Daiichi Sankyo alleged that the Singh brothers had concealed crucial information while selling Ranbaxy to it for $4.6 billion in 2008. The Singh brothers contested the award in the Delhi high court.
Sun Pharmaceutical Industries Ltd purchased Ranbaxy from Daiichi Sun Pharmaceutical in a $3.2 billion acquisition it completed in 2015.