The crucial hearing on ₹3,500 crore arbitration case against former Ranbaxy Ltd promoters Malvinder and Shivinder Singh and Japanese drug makrer Daiichi Sankyo Inc, which is seeking to recover the amount awarded to it by a Singapore tribunal will be taken up on Thursday in the Supreme Court.
The court will also examine affidavits filed by both Malvinder and Shivinder Singh regarding the settlement of ₹3,500 crore arbitration award.
In its last hearing in February, the Supreme Court bench of Chief Justice Ranjan Gogoi, Justice Navin Sinha and Justice Sanjiv Khanna had ordered a personal presence of Singh brothers along with their affidavits in the court.
Amid differences that have emerged between the brothers, both are pursuing their independent path.
While the elder one Malvinder Singh claims that the loan and advances are due from different entities and individuals and hence his role is limited in paying back. As reported by Mint, Malvinder Singh had also filed a complaint in February with the Economic offences Wing (EoW) of Delhi police claiming that Gurinder Singh Dhillon, the spiritual head of Radha Soami Satsang Beas (RSSB), among others used funds from the Ranbaxy sale to buy real estate.
Shivinder Singh who also faces collective liablity in the ongoing feud had offered to mediate with Daiichi.
On Thursday, the court will hear the plea by the Japanese drug maker which is seeking the enforcement of arbitration award by Singapore-based tribunal. This is a fall out from the Ranbaxy sale in 2008. As Ranbaxy’s manufacturing plants faced severe regulatory issues with the US FDA, Daiichi blamed Singh brothers for concealing information for alleged suppression of facts at Ranbaxy Laboratories. Malvinder controlled and led the Ranbaxy sale.’
Back in 2016, the Singapore International Arbitration Centre had ordered the Singh brothers to pay $500 million for concealing information about alleged suppression of facts when its shares were sold to Daiichi Sankyo for $4.6 billion in 2008.
The Ranbaxy promoters had challenged the decision by the Singapore arbitration tribunal before the courts of law in India and Singapore. However, in October 2017, the Delhi HC upheld the decision by the Singapore tribunal and ordered Singh brothers to pay Daiichi.
The hearing on Thursday is also important for the Fortis-IHH Bhd deal. Pertinently, in December Daiichi had moved the court to ensure that the sale deal between Fortis and Malaysian healthcare group IHH Bhd is stalled, owing to the large undertakings taken by the former Fortis promoters, Singhs on the basis of their shareholding in the hospital group. The court had then on 14 December, ordered stay on the acquisition of controlling stake in Fortis by the Malaysian healthcare group, stating that “status quo" was to be maintained.
In its plea submitted to the court then, Daiichi Sankyo argued that the Singh brothers created encumbrances on 1.2 million shares of Fortis in violation of court orders.
On their part, Fortis management feels they have been caught in a crossfire in the Daiichi case. In an interview to Mint on 25 February chairman Ravi Rajagopal said that the ongoing case has been causing a lot of anxiety to the people working in the Fortis hospitals and it is impending hospital operations as an addtional ₹3,400 crore put in an escrow account to initiate an open offer is stuck due to a SC order. “We have a team of over 3,000 doctors, and 3,000-4,000 nurses and paramedics. These people are coming to the hospital everyday and saving lives. When they read the headlines what is happening, they get concerned as to what is going to happen. It is impeding hospital operations and it is impeding our ability to do our business. The banks are being cautious and they are holding back their credit lines to us, because they want to see what happens. In a way, it is unfair to Fortis because what has been achieved in the last eight months was beyond people’s expectations back then. Now, we have got a very important strategic investor with global credentials, we have got urgent capital, we have restored morale to some extent, we have restored confidence of the investors to some extent. There is a tender offer that has been put on hold, but the point is this has been as a result of the recent moves. And, it is hurting us for no fault of ours".