Fortis Healthcare Weighs Supreme Court Move After Delhi HC Ruling

Fortis Healthcare is contemplating an appeal to the Supreme Court following a Delhi High Court ruling that mandates a forensic audit of past transactions related to the Daiichi Sankyo arbitration case. The court's decision, delivered by Justice Subramonium Prasad, has significant implications for Fortis as it creates a substantial contingent liability, potentially requiring the company to compensate Daiichi Sankyo directly.

High Court Orders Forensic Audit

The Delhi High Court's 213-page judgment calls for a detailed forensic audit of Fortis' transactions dating back to the period when the Singh brothers were in charge, extending to the era of IHH's acquisition. The audit aims to scrutinize the acquisition process and the roles of the involved parties. The court indicated that it could reverse transactions found to have violated judicial orders.

Under paragraph 269 of the judgment, the court asserted its authority to examine the legal consequences for any financial institution or bank involved in transactions that contravene existing court orders. This could lead to direct financial repercussions for Fortis, should the forensic audit uncover violations.

Potential Supreme Court Appeal

Legal experts suggest that Fortis may consider appealing to the Supreme Court to contest the high court's decision. The judgment emphasizes that Fortis, now under new management, cannot claim ignorance of any previous management's wrongdoings, thus holding the current administration accountable.

Senior advocate Arvind Nigam and advocate Giriraj Subramanium represented Daiichi Sankyo in the proceedings. The ruling is part of the ongoing legal battle following Daiichi Sankyo's arbitration win against the Singh brothers, the former promoters of Ranbaxy Laboratories, which Fortis Healthcare later acquired.

Implications for Fortis Healthcare

The high court's decision adds a layer of complexity for Fortis Healthcare, which has been undergoing significant management changes and restructuring efforts. The potential financial liability could affect the company’s strategic decisions and its financial health.

Fortis Healthcare has yet to make a formal announcement regarding its next steps but is actively reviewing the judgment to determine its course of action. The company's legal team is evaluating the feasibility of a Supreme Court appeal as a means to mitigate potential liabilities.

This development is the latest in a series of legal challenges faced by Fortis Healthcare, which has been under scrutiny since the acquisition of Ranbaxy by Daiichi Sankyo led to allegations of financial misrepresentation by the Singh brothers.