Tuesday 23 August 2016

Daiichi case: Ex-Ranbaxy promoters say Singapore tribunal award can’t be enforced in India

NEW DELHI: Former Ranbaxy promoters Malvinder Singh and Shivinder Singh, facing a Rs 2,562-crore penalty, told Delhi High Court that the Singapore tribunal's arbitration award to Daiichi Sankyo can't be enforced under Indian law. The Singh brothers were accused of concealing information regarding wrongdoing at Ranbaxy when they sold a majority stake in it to the Japanese firm in 2008. Daiichi Sankyo
eventually had to reach a $500-million settlement with the US Department of Justice in 2013 over allegations that Ranbaxy had falsified data. "Substantive objections" exist under India's arbitration law to make the order unenforceable, Harish Salve, counsel for the brothers and others named in Daiichi Sankyo's enforcement petition, told the high court on Monday.

Daiichi case: Ex-Ranbaxy promoters say Singapore tribunal award can’t be enforced in India

If the Singhs' contention on enforceability is accepted by the Delhi High Court, the award can't be implemented through the sale of assets in India. Along with interest and legal fees, the total liability is pegged at Rs 3,500 crore. The Singh brothers have appealed against the order in Singapore as well.

The tribunal wasn't entitled to award consequential damages, besides which Daiichi Sankyo withheld certain documents that would prove it was aware of the inquiries before agreeing to the acquisition, said the Singhs' counsel.

Justice Manmohan Singh, who was hearing the arguments, asked Daiichi Sankyo's counsel to respond to the objections at the next hearing, which has been scheduled for November 28. Counsel for the Singh brothers cited provisions under section 48 in the Arbitration and Conciliation Act, 1996, that lays down conditions under which arbitration orders can be rejected.

Details of Malvinder Singh's assets were submitted to the court in a sealed cover on Monday. The other respondents have been asked to file similar affidavits. The court, which is also hearing a related case regarding freezing of assets, accepted an assurance by the Singh bothers that no changes would be made to ownership, pending a decision.

A spokesperson for RHC Holdings, holding company for the Singh family enterprises, declined to comment as the matter is in court.

The Singapore tribunal had awarded Daiichi Sankyo Rs 2,562 crore in consequential damages by a 2-1 majority order, with Justice AM Ahmadi — former chief just

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