New Delhi: The Supreme Court has declined to interfere with the Delhi High Court’s orders in the long-running dispute between Japanese pharmaceutical major Daiichi Sankyo and Fortis Healthcare Ltd, clearing the way for a forensic audit aimed at tracing assets linked to the enforcement of a arbitral award against former Fortis promoters.
A bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana was hearing a Special Leave Petition filed by Fortis Healthcare challenging the detailed orders passed by Justice Subramonium Prasad of the Delhi High Court.
During the hearing, the bench did not enter into the merits of the High Court’s findings, while observations focused on the efforts to trace assets in connection with the 2016 arbitral award, which remains unexecuted against the former promoters.
Justice Bagchi, while hearing the matter, observed that the presence of public shareholders in a listed company does not by itself provide a defence against a forensic audit. He also told the appellants, “You may not be a judgment debtor, but you are an enabler of the judgment debtors.”
The proceedings relate to Daiichi Sankyo’s efforts to enforce an international arbitral award arising from its dispute with the Singh brothers over the sale of their stake in Ranbaxy Laboratories. The award was issued in 2016 and has been the subject of prolonged enforcement proceedings in India.
Fortis Healthcare was represented by senior advocates Abhishek Manu Singhvi, Darius Khambata and Neeraj Kishan Kaul, with Singhvi settling the pleadings. Daiichi Sankyo was represented by senior advocates Mukul Rohatgi and Arvind Nigam, along with advocate Giriraj Subramanium.
The Supreme Court’s decision leaves the Delhi High Court’s directions in place, including the process of examining transactions and financial movements relevant to Daiichi Sankyo’s efforts to trace assets connected with the award.
The dispute has continued for years across multiple judicial and arbitral proceedings and has also involved questions concerning the role of Fortis and its subsequent association with Malaysian healthcare group IHH Healthcare.
The latest development is significant for Daiichi Sankyo’s continuing efforts to secure the fruits of the arbitral award and could have wider implications for the enforcement of foreign arbitral awards where assets or transactions involving entities other than the original judgment debtors are under scrutiny.
