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Bloomberg
Malvinder Singh and Shivinder Singh must pay Daiichi Sankyo Co. $550 million awarded in an arbitration over the sale of a drugmaker controlled by the brothers, an Indian court ruled.
The verdict was pronounced by a single-judge bench of Justice Jayant Nath of the Delhi High Court. He rejected all objections raised by the Singh brothers and said the arbitration award is in line with Indian laws and policy. The ruling can still be appealed in a two-member panel of the Delhi High Court or the Supreme Court.
The Japanese drugmaker had sought the intervention of India’s courts to enforce an award by a Singapore tribunal which found the Singh brothers concealed critical information during the sale of their generic drug firm, Ranbaxy Laboratories Ltd., to Daiichi in 2008. The brothers contested that ruling in Singapore court and had also opposed implementation of the award in India.
As the case proceeded Daiichi sought injunctions preventing the Singh brothers from selling assets to ensure the brothers have the funds to fulfill their potential liability. India’s top court has ordered the brothers not to sell or dilute their shareholding in Fortis Healthcare Ltd., India’s second-largest private hospital chain, until it decides on Daiichi’s petition to place a longer-term halt on asset sales by the brothers.
The court said Daiichi can claim the amount from the Singh brothers and their companies but not from their children, who were also named in the suit filed by Daiichi.
“We are disappointed with the ruling,†a spokesman for RHC Holding Pvt., the Singh brothers’ main holding company, said. Further course of action will be decided after studying the order in detail, he said.
Daiichi will now file an application with the court seeking execution of the award with steps such as the sale of shares and assets held by companies controlled by the Singh brothers including Fortis and Religare, Amit Mishra of P&A Law Office, a firm representing the Japanese company, said.
The genesis of the brothers’ battle with Daiichi is the sale of Ranbaxy for $4.6 billion, which took place months before the US Food and Drug Administration banned imports at two of the generic drugmaker’s Indian plants.