Fortis Healthcare Mulls Supreme Court Appeal in Daiichi Sankyo Case
Fortis Healthcare may appeal to the Supreme Court following a Delhi HC ruling on a forensic audit in the Daiichi Sankyo case, posing potential liabilities.
Fortis Healthcare is evaluating its legal options after a recent ruling by the Delhi High Court in the ongoing arbitration case with Daiichi Sankyo. The court has ordered a forensic audit of transactions that occurred when the Singh brothers controlled Fortis, continuing through the acquisition by IHH. This decision could lead to significant financial liabilities for Fortis, prompting the company to consider appealing to the Supreme Court.
High Court's Forensic Audit Order
The Delhi High Court's judgment, delivered by Justice Subramonium Prasad, spans 213 pages and mandates a forensic audit of Fortis' past transactions. The audit will scrutinize deals from the Singh brothers' tenure to the acquisition by IHH, examining the role of all involved parties. The court has indicated that it can impose remedies on any entity found to have breached its orders, potentially leading to direct compensation payments to Daiichi Sankyo.
Financial Implications for Fortis
The High Court's ruling introduces a significant contingent liability for Fortis Healthcare. According to legal experts, the court has the authority to reverse transactions if the audit reveals that banks or financial institutions facilitated deals violating judicial orders. Fortis, now under new management, is unable to distance itself from past misdeeds, as the court noted that ignorance of former management's actions does not absolve the company of responsibility.
Potential Appeal to the Supreme Court
Given the substantial implications of the High Court's ruling, Fortis is contemplating an appeal to the Supreme Court. The company's decision will depend on the outcomes of the forensic audit and any ensuing legal ramifications. Senior advocates representing Daiichi, including Arvind Nigam and Giriraj Subramanium, have emphasized the court's capacity to enforce legal consequences for any violations discovered during the audit.
The ongoing legal battle stems from a 2018 arbitration award that ordered the Singh brothers to pay Daiichi Sankyo $500 million, following allegations of concealment of information during the sale of Ranbaxy Laboratories. The High Court's current order further complicates the situation for Fortis and its stakeholders, as they await the results of the forensic audit and consider their next legal steps.