Fortis Healthcare Considers Supreme Court Appeal After Delhi HC Ruling

Fortis Healthcare is currently assessing its legal options following a significant ruling by the Delhi High Court regarding the Daiichi Sankyo arbitration case. The court's decision, delivered on Monday, has mandated a forensic audit of Fortis' past transactions, which may result in a substantial contingent liability for the company.

High Court Orders Forensic Audit

The Delhi High Court, in a detailed 213-page judgment authored by Justice Subramonium Prasad, ordered a forensic examination of transactions dating back to when the Singh brothers controlled Fortis, up to the period when Malaysian firm IHH Healthcare acquired a controlling interest. The ruling raises potential liabilities for Fortis and could require direct compensation to Daiichi Sankyo if any violations of court orders are confirmed.

Justice Prasad's judgment emphasized that the court retains the authority to provide remedies against individuals found to have violated orders or obstructed the execution of the decree. The court's scrutiny extends to the acquisition of Fortis by IHH and the involvement of all concerned parties. Under paragraph 269, the judgment allows the court to reverse transactions if the forensic audit reveals any complicity by banks or financial institutions in circumventing judicial orders.

Potential Supreme Court Appeal

In light of the high court's ruling, Fortis Healthcare is contemplating an appeal to the Supreme Court. Sources familiar with the matter have indicated that the company is reviewing the judgment's implications, particularly the financial and operational impact of the forensic audit and potential liabilities.

The high court's decision underscores that Fortis, despite being under new management, cannot claim ignorance of the past management's alleged wrongdoings. Senior advocate Arvind Nigam and advocate Giriraj Subramanium represented Daiichi Sankyo in the case. The judgment holds that any party found to have facilitated transactions in violation of court orders could face legal consequences.

Implications for Fortis Healthcare

The court's directive for a forensic audit casts a spotlight on Fortis' historical transactions and the role of financial institutions involved. The outcome of this audit could significantly impact Fortis' financial standing, especially if the court mandates compensation to Daiichi Sankyo. As Fortis evaluates its next steps, the possibility of a Supreme Court appeal remains a critical consideration.

The ongoing legal proceedings stem from Daiichi Sankyo's acquisition of Ranbaxy Laboratories from the Singh brothers, which later led to legal battles over alleged misrepresentation of crucial information. The current developments in the case continue to draw attention as Fortis navigates the complex legal landscape.