BackKathawalla to arbitrate Max case against Care
The matter will be heard by the arbitrator under Section 17 of the Arbitration and Conciliation Act that will allow the arbitral tribunal to pass interim orders in the matter.
PremiumMUMBAI : The Bombay High Court has appointed retired Justice S.J. Kathawalla as sole arbitrator in the dispute between Max Healthcare Institute Ltd and Quality Care India Pvt. Ltd, which runs Care Hospitals.
Quality Care is the company that operates Care Hospitals, while Touch Healthcare and Evercare are shareholders in Quality Care. Evercare Group Management is owned by Evercare Healthcare Fund, which is managed by US private equity firm TPG.
The matter will be heard by the arbitrator under Section 17 of the Arbitration and Conciliation Act that will allow the arbitral tribunal to pass interim orders in the matter.
Meanwhile, the lawyers for Care shareholders said in court that Evercare has already signed a share purchase agreement with a ‘reputed third party’ for the sale of Care Hospitals. The third party in question is Blackstone, two people familiar with the SPA said.
The dispute relates to the widely-known proposed takeover of Care Hospitals, which is owned by TPG Rise-managed Evercare Group Management and Touch Healthcare.
On Wednesday, a single bench led by Justice Milind N Jadhav suggested the parties approach the arbitrator for raising any contentions arising from the dispute.
While he directed the arbitrator to decide on the plea for interim relief within two weeks, Jadhav said he was not inclined to get into the merits of the matter.
“It is clarified that the court has not gone into the merits of the case," the order published on Wednesday said."
On 27 April, Max Health in a regulatory filing with the exchanges said it had moved the Bombay high court against Touch Healthcare, Evercare Group Management and Quality Care to preserve its “contractual rights", prior to an arbitration with the respondents.
Max’s petition claimed contractual rights arising from a March 16 agreement.
While seeking a status quo in the matter, Janak Dwarkadas, senior counsel appearing for Max Healthcare argued that the term sheet signed between itself and Care Hospitals was binding on them.
Justice Jadhav, however, clarified that he did not intend to grant any status quo in the matter since third party rights had already been created.
Max Healthcare had earlier moved the Bombay High Court on 27 April alleging ‘bad faith’ and breach of ‘exclusivity’ in a non-binding contract, as reported earlier. Evercare and other Quality Care shareholders responded in their petition that there had been no binding term sheet from Max Healthcare within the deal deadline - April 12.
The matter went to court after private equity major Blackstone Inc had submitted a higher bid and signed a definitive agreement for acquiring Care Hospitals.
“It is clarified that this Court has not gone into the merits of the matter.... the learned sole Arbitrator is requested by the Court to dispose of the Section 17 proceedings within a period of two weeks from today. Both parties have consented to appear before the learned sole Arbitrator on Monday, 08th May 2023 for fixation of the schedule for hearing the Section 17 proceedings."Justice Jadhav said in his order on Wednesday.
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