DAIICHI-RANBAXY ROW: COURT ORDERS ATTACHMENT OF ASSETS
The Delhi High Court on Monday ordered the attachment of all unencumbered assets of two holding firms of the former promote rs of India’s Ranbaxy Laboratories, Malvinder Singh and Shivinder Singh, to execute the ~35 billion ar bi tr al award won by Japan’s Daiichi Sankyo. Justice Jayant Nath issued the warrants for attaching the unencumbered assets of RH C Holdings and Oscar Investments, and directed the brothers and 10 others to file a list of their unencumbered assets within 10 days.
The Delhi High Court on Monday ordered the attachment of all unencumbered assets of two holding companies of the former promoters of India’s Ranbaxy Laboratories to execute the ~35-billion arbitral award won by Japanese pharma major Daiichi Sankyo.
Justice Jayant Nath issued the warrants for attaching the unencumbered assets of RHC Holdings and Oscar Investments and directed the former Ranbaxy promoters and brothers, Malvinder Singh and Shivinder Singh, and 10 others to file within 10 days a list of their unencumbered assets.
“Let warrants of attachment of all unencumbered assets (of the two companies) be issued,” the judge said.
The court also restrained RHC Holdings from operating its bank accounts except for paying salaries and statutory dues till March 23, the next date of hearing. It directed the Singh brothers and others to maintain the status quo on all the assets where they have any interest, as it also issued a order relating to the two companies.
A garnishee order is passed by an executing court directing or ordering a garnishee not to pay money to judgment debtor since the latter is indebted to the garnisher (decree holder). It is an order of the court to attach money or goods belonging to the judgment debtor in the hands of a third person.
During the hearing, senior advocates P V Kapur and Arvind Nigam, appearing for Daiichi, pointed out two affidavits filed by the two companies in 2016 and 2017 giving the list of their unencumbered assets and urged the court to attach the assets.
Senior advocate Rajiv Nayyar, appearing for the Singh brothers, the companies and others, said the court should appoint a chartered accountant to set the process in motion. The court had earlier restrained the Singhs and others from selling or transferring their shares or any movable or immovable property. The brothers had disclosed their assets to the court in sealed covers in December 2016 and March 2017 during the pendency of Daiichi’s plea seeking enforcement of the 2016 arbitral award passed by a Singapore tribunal against them.
A tribunal in Singapore had passed the award in favour of Daiichi, holding that the Singh brothers had concealed information that the Indian 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 favour of Daiichi and paved the way for enforcing of the 2016 tribunal award against the brothers, who had sold theirsharesinRanbaxytoDaiichiin2008 for ~95.7 million. Sun Pharmaceuticals 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 seeking direction to the brothers to take steps towards paying its ~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 the Singh brothers’ appeal against the high court verdict upholding the international arbitral award, saying it was not inclined to interfere with it.
Daiichihadapproachedthehighcourt in 2016 to seek the enforcement of a ~25.6 billionSingaporearbitralawardpassedin April2016, alongwithanadditionalclaim of interest and lawyers’ fees incurred in connectionwiththeproceedings. Thetribunal’s award had come after the Japanese company invoked an arbitration clause against the Singhs, alleging that they concealed important information while selling Ranbaxy in 2008.