SC rejects plea of Axis Bank against release of arbitral award money to Japanese firm Daiichi

Axis Bank, which lent money to Ranbaxy and has secured an order for attachment of properties from the Debt Recovery Tribunal (DRT)

The Supreme Court refused to entertain an Axis Bank plea opposing the release of ₹ 9.39 crore, which is part of ₹ 3,500 crore awarded by a Singapore tribunal to Daiichi Sankyo in its case against former Ranbaxy promoters Malvinder and Shivinder Singh.

Axis Bank, which lent money to Ranbaxy and has secured an order for attachment of properties from the Debt Recovery Tribunal (DRT), had recently moved the Delhi High Court saying that the Japanese pharma major not be allowed to realise the part payment of the award “unless a proportionate amount of money is kept back” for it.

The high court, which is hearing a plea of Daiichi seeking execution of the ₹ 3,500 crore Singapore tribunal arbitral award against former Ranbaxy promoters, had rejected the plea of Axis Bank. The private bank challenged it in the apex court.

Senior advocate Ranjit Kumar, appearing for Axis Bank, told a bench headed by Chief Justice Ranjan Gogoi that the lending bank was armed with an attachment order from the DRT in its favour and if the Japanese firm is allowed to realise the entire arbitral award sum, then nothing would remain for it.

“Heard the counsel for the petitioner and perused the relevant material…We are not inclined to interfere. The Special Leave Petition is accordingly dismissed,” said the bench, also comprising justices SK Kaul and KM Joseph.

Daiichi had bought Ranbaxy in 2008. Later, it had moved the Singapore arbitration tribunal accusing that the Singh brothers had concealed information that the Indian company was facing probe by the US Food and Drug Administration and the Department of Justice, while selling its shares.

Daiichi had to enter into a settlement agreement with the US Department of Justice, agreeing to pay $500 million penalty to resolve potential, civil and criminal liability. The company had then sold its stake in Ranbaxy to Sun Pharmaceuticals for ₹ 22,679 crore in 2015.

Earlier, the High Court, while hearing the plea of the Japnese firm for execution of arbitral award, had asked Malvinder and Shivinder Singh to maintain status quo with regard to their assets, disclosed by them during the arbitral proceedings,

Later, the high court directed Singh brothers to deposit with it 3.5 million Singapore dollars, which they had obtained by selling the shares in a company in violation of court’s direction.

The order had come after the high court was informed by the counsel for Malvinder that his 45 lakh equity shares in Religare Healthcare Trust were sold in Singapore in April.

The court had also directed the brothers and 12 others, including their family members and companies, to come up with a plan on how they seek to deposit the amount of ₹ 3,500 crore.