Fortis Healthcare Considers Supreme Court Appeal in Daiichi Sankyo Case

Fortis Healthcare is contemplating a move to the Supreme Court following a consequential ruling by the Delhi High Court in the Daiichi Sankyo arbitration case. The court has mandated a forensic audit of Fortis' past transactions, potentially leading to substantial liabilities for the healthcare provider.

Delhi High Court's Forensic Audit Mandate

The Delhi High Court's decision, delivered by Justice Subramonium Prasad, calls for a thorough examination of Fortis' financial activities, specifically scrutinizing transactions from the era when the Singh brothers were at the helm to the period post-acquisition by IHH Healthcare. This audit could uncover violations of court orders that might have obstructed the enforcement of an arbitration award favoring Daiichi Sankyo.

The 213-page judgment emphasizes the court's authority to impose remedies on any entity found culpable of breaching judicial directives. This could include reversing transactions and demanding direct compensation to Daiichi Sankyo from those determined to have circumvented the orders.

Potential Supreme Court Appeal

In light of the high court's ruling, Fortis Healthcare is evaluating the possibility of challenging the decision in the Supreme Court. The company faces the prospect of significant financial repercussions if the forensic audit reveals discrepancies or non-compliance with judicial mandates.

A legal expert explained that the judgment allows for the reversal of transactions and holds banks or financial institutions accountable if they knowingly facilitated activities contravening existing court orders.

Historical Context and Legal Implications

The legal battle stems from Daiichi Sankyo's acquisition of Ranbaxy Laboratories, previously controlled by the Singh brothers, and the subsequent arbitration award against them. Fortis, now under different management, is being held accountable for any past misconduct related to the transactions under scrutiny.

Senior advocate Arvind Nigam and advocate Giriraj Subramanium represented Daiichi Sankyo in the proceedings. The court's decision underscores that Fortis cannot plead ignorance of the alleged malpractices conducted by its former management.

The outcome of this case could set a precedent for corporate accountability in India, particularly regarding compliance with court orders and the responsibilities of new management in addressing past legal and financial liabilities.