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Daiichi row: HC stops ex-Ranbaxy promoters from selling assets till Feb 26

The court also directed the brothers and 12 others, including their family members and companies, to come up with a plan on how they seek to deposit the amount of Rs 3.5 billion

Press Trust of India  |  New Delhi 

Malvinder Mohan Singh and Shivinder Mohan Singh
Malvinder Mohan Singh and Shivinder Mohan Singh

Former promoters of India's Ltd were directed by the High Court on Monday to maintain status quo on the assets they have disclosed during Japanese pharma case to enforce a Rs 3.5 billion international arbitral award against them.

The court restrained the former Ranbaxy promoters and brothers, Malvinder Singh and Shivinder Singh, and 12 others from selling or transferring their shares or any movable or immovable property till February 26, the next date of hearing, as disclosed by them before the high court earlier.

They have disclosed their assets to the court in sealed covers on two occasions in December 2016 and March 2017 during the pendency of Daiichi's plea seeking enforcement of the 2016 arbitral award passed by a tribunal against the Singh brothers.

"Respondents to maintain status quo with regard to their assets disclosed as on December 2, 2016, and March 14, 2017, in their affidavits till the next date of hearing, February 26," Justice said.

The court also directed the brothers and 12 others, including their family members and companies, to come up with a plan on how they seek to deposit the amount of Rs 3.5 billion.

A tribunal in had passed the award in favour of Daiichi holding that the Singh brothers had concealed information that the Indian company was facing a probe by the and the while selling its shares.

The high court on January 31 had upheld the international arbitral award passed in the favour of Daiichi and paved the way for enforcement of the 2016 tribunal award against the brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for Rs 9.57 billion.

had later acquired the company from Daiichi. It had however said that the award was not enforceable against five minors, who were also shareholders in Ranbaxy, saying they cannot be held guilty of having perpetrated a fraud either themselves or through an agent.

Daiichi had moved the high court seeking direction to the brothers to take steps towards paying its Rs 3.5 billion arbitration award, including depositing the amount. It has also urged the court to attach their assets, which may be used to recover the award.

During the day's hearing, senior advocates and P V Kapur, appearing for Daiichi, claimed that they do not have faith over the brothers as they have siphoned off a large amount of money and sought that the court should freeze their assets at least till the next date of hearing.

Singhs' sought a short adjournment as the main was not available and told the court that they would come up with a plan for the next hearing.

The court said, "you have to give a plan and strategy as to how you will go about it. You should deposit some amount of money. As the amount is large, one can give you some liberty, but you have to give a plan."

On February 16, the had dismissed Singh brothers' appeal against the high court verdict upholding the international arbitral award, saying it was not inclined to interfere with it.

Daiichi, in its fresh application in the high court, has said that it has started the process of enforcing the award against the Singhs and other respondents, excluding the brother's children, who are minors.

Daiichi had approached the high court in 2016 to seek the enforcement of a Rs 2.5 billion arbitral award passed in April 2016, along with an additional claim of interest and lawyers' fees incurred in connection with the proceedings.

The tribunal's award had come after the Japanese company invoked arbitration clause against Singhs alleging that they concealed important information while selling Ranbaxy in 2008.

Daiichi had entered into a settlement agreement with the US Department of Justice, agreeing to pay USD 500 million penalty to resolve potential, civil and criminal liability.

The company had then sold its stake in Ranbaxy to Sun Pharmaceuticals for Rs 22.6 billion in 2015. Singhs' had argued the award granted consequential damages which were beyond the jurisdiction of the arbitral tribunal and the award cannot be enforced under the provision of the Arbitration Act.

They had alleged that Daiichi was fully aware of all facts and still chose to retain the Ranbaxy shares, instead of terminating the agreement and returning them.

Regarding the award amount, the court said it was clearly within the domain of the arbitral tribunal to assess damages.

The Debts Recovery Tribunal (DRT) has recently restrained Malvinder Singh, the of Fortis Healthcare, from selling a posh property in Lutyen's and some other assets in a

First Published: Mon, February 19 2018. 19:41 IST