The Delhi High Court on Tuesday allowed the sale of unencumbered shares of the firms of former promoters of India's Ranbaxy Laboratories Ltd in listed companies to repay the Rs 35 billion arbitration award in favour of Japanese pharma major Daiichi Sankyo.
Justice Jayant Nath also directed the debtors to fully cooperate with the chartered accountant (CA), who was appointed a local commissioner in the matter, to sell these shares at the stock exchange.
The court said the proceeds should be deposited with the registrar general of the High Court and listed the matter for further hearing on May 14.
The order came after the CA submitted a report on May 8 giving the list of shares of the Singh brothers -- Malvinder and Shivinder, their family members and firms including RHC Holding Pvt Ltd and Oscar Investments Ltd, in listed companies.
"The local commissioner/CA is directed to sell the entire lot of unemcumbered shares of the respondents, other than respondent number 1 (Malvinder Singh) in listed companies," the high court said.
The counsel for the Singh brothers told the court that the Debt Recovery Tribunal had ordered a stay on the sale of unencumbered assets of Malvinder Singh in a separate case by the Yes Bank. The high court then sent a notice to the Yes Bank seeking its response.
The court also issued notice to Daiichi on a plea by the brothers seeking a stay on the enforcement proceedings, as a Singapore court has reserved its judgment in an appeal by them against Daiichi's award.
Singh brothers' advocate said the judgment of the Singapore court was expected in June and the proceedings to enforce the award here should be stayed till then.
The Delhi High Court had earlier ordered the attachment of all unencumbered assets of RHC Holdings Pvt Ltd and Oscar Investments Pvt Ltd.
A Singapore tribunal had in April 2016 passed the award in Daiichi's favour holding that the brothers had concealed information that their company was facing probe by the US Food and Drug Administration and the Department of Justice, 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 95.76 billion. Sun Pharmaceuticals Ltd 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 perpetuated a fraud either themselves or through any agent.
Daiichi had moved the high court here seeking direction to the brothers to take steps towards paying its Rs 35 billion arbitration award, including depositing the amount. It had also urged the court to attach their assets, which may be used to recover the award.
On February 16, the Supreme Court had dismissed Singh brothers' appeal against the high court verdict upholding the international arbitral award.
Singhs' counsel had argued that 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 claimed that Daiichi was fully aware of all facts and still chose to retain the Ranbaxy shares, instead of terminating the agreement and returning them.