Case Note & Summary
The proceedings arose from an action initiated by Daiichi Sankyo Company Limited to enforce a foreign arbitral award made in Singapore on 29.04.2016 against multiple respondents, including individuals and companies. The award directed the respondents to pay approximately INR 2562 crores along with interest. The award faced challenges in both Singapore and India, but these were dismissed, leading to its finality. In the enforcement proceedings, concerns were raised that the respondents were attempting to move assets out of reach, prompting the High Court to record undertakings from the respondents regarding their shareholding in Fortis Healthcare Holdings Private Limited. The petitioner challenged an order from the High Court that merely recorded these undertakings instead of securing the assets. The Supreme Court noted that the respondents had repeatedly assured the court that they would not alter their shareholding, yet evidence showed that they had pledged shares in violation of court orders. The court analyzed the timeline of shareholding and concluded that the respondents had engaged in actions that undermined the enforcement of the arbitral award. Ultimately, the court found the respondents guilty of contempt for their actions, which were deemed to be wilful disobedience of court orders, and indicated that they would be heard on the question of sentencing.
Headnote
A) Arbitration Law - Enforcement of Foreign Arbitral Award - Validity of Award - Arbitration and Conciliation Act, 1996, Section 48 - The court upheld the enforcement of a foreign arbitral award despite objections raised under Section 48, confirming the award's finality after challenges in Singapore and India were dismissed. Held that the award was enforceable against the respondents (Paras 1-1). B) Contempt of Court - Wilful Disobedience of Court Orders - Contempt of Courts Act, 1971, Section 2(b) - The court found the respondents guilty of contempt for transferring shares in violation of orders to maintain status quo, indicating a deliberate attempt to frustrate the enforcement of the arbitral award. Held that the actions constituted contempt (Paras 6-44).
Issue of Consideration
Whether the respondents violated court orders regarding the maintenance of status quo on shareholding and whether contempt was committed.
Final Decision
The Supreme Court upheld the enforcement of the foreign arbitral award and found the respondents guilty of contempt for violating court orders regarding the maintenance of status quo on shareholding. The court indicated that it would hear the contemnors on the question of sentence.
Law Points
- Enforcement of Foreign Arbitral Award
- Contempt of Court
- Arbitration and Conciliation Act
- 1996
- Section 48
- Wilful Disobedience
