Case Note & Summary
The proceedings arose from an action initiated by Daiichi Sankyo Company Limited to enforce a Foreign Arbitral Award dated 29.04.2016 against multiple respondents, including individuals and corporate entities. The award, amounting to approximately INR 2562 crores, was challenged in both Singapore and India but was upheld, leading to enforcement proceedings in the Delhi High Court. During these proceedings, concerns were raised that the respondents were attempting to move assets beyond the reach of Daiichi, particularly regarding their shareholding in Fortis Healthcare Holdings Private Limited. The High Court recorded multiple assurances from the respondents regarding the status of their assets, but these assurances were repeatedly violated, prompting Daiichi to file a contempt petition. The Supreme Court examined whether the respondents had complied with its orders to maintain the status quo of their shareholding. It found that the respondents had indeed violated these orders by pledging shares in Fortis Healthcare Limited, which constituted contempt of court. The court held that the respondents had acted with the intent to defeat the rights of Daiichi and directed them to deposit a significant sum as a condition for leniency in sentencing. The court emphasized the importance of adhering to court orders and the consequences of wilful disobedience.
Headnote
A) Arbitration Law - Enforcement of Foreign Arbitral Award - Challenge to Enforcement - Arbitration and Conciliation Act, 1996, Section 48 - The enforcement of a foreign arbitral award was challenged on grounds of alleged violations of court orders regarding asset management. The court held that the objections raised were dismissed, affirming the finality of the award (Paras 1-2). B) Contempt of Court - Wilful Disobedience of Court Orders - Contempt of Courts Act, 1971, Section 2(b) - The court found that the respondents had knowingly and wilfully disobeyed orders regarding the maintenance of shareholding status, leading to a finding of contempt. The court directed the contemnors to deposit a specified amount to potentially mitigate the contempt finding (Paras 44-45).
Issue of Consideration
Whether the respondents violated court orders regarding the maintenance of status quo of shareholding in Fortis Healthcare Limited.
Final Decision
The Supreme Court found the respondents guilty of contempt for wilfully disobeying court orders regarding the maintenance of shareholding status. The court directed the contemnors to deposit a sum of INR 1170.95 crores each as a condition for leniency in sentencing.
Law Points
- Contempt of Court
- Enforcement of Foreign Arbitral Award
- Arbitration and Conciliation Act
- 1996
- Section 48
- Wilful Disobedience
