P&A Law Offices successfully represents UpHealth Holdings, Inc. against Glocal Healthcare Systems Private Limited and its promoters, in an arbitration seated in Chicago
In an arbitral award, dated 15 March 2024 (“Award”), an ICC Tribunal comprising of Mr. V.K Rajah, Ms. Carolyn Lamm, and
P&A Law Offices successfully represents UpHealth Holdings, Inc. against Glocal Healthcare Systems Private Limited and its promoters, in an arbitration seated in Chicago
In an arbitral award, dated 15 March 2024 (“Award”), an ICC Tribunal comprising of Mr. V.K Rajah, Ms. Carolyn Lamm, and Mr. Promod Nair awarded damages in the sum of USD 110 million (together with arbitration costs) to UpHealth Holdings, Inc. (“UpHealth”) against Glocal Healthcare Systems Private Limited (an Indian company) (“Glocal”) and its shareholders, which includes Mr. M. Damodaran, Mr. Syed Sabahat Azim, Mr. Gautam Choudhary and Ms. Richa Azim (collectively, the “Respondents”). The Respondents were found by the ICC Tribunal to be in breach of the Share Purchase Agreement (“SPA”) executed by the Respondents with UpHealth, under which UpHealth purchased a nearly 95% shareholding of Glocal.
The dispute revolved around, inter alia, the various breaches committed by the Respondents of a SPA entered between the parties and failure of the Respondents to hand over the control of Glocal to UpHealth despite UpHealth being a majority shareholder in Glocal. The dispute was launched by the Respondents in the Indian courts by their filing of several actions with the Rajarhat Commercial Court, the NCLT and other filings. This was soon followed by a number of other filings to harass UpHealth and its board and senior management. Despite all their actions, the Respondents were not successful except in filing FIRs with the local police.
In December 2022, an Emergency Arbitrator (“EA”) appointed by the ICC passed certain directions. The Respondents failed to comply with these directions.
In connection with this EA order, the Calcutta High Court, in AP 809 of 2022, passed an order dated 23 August 2023 (“Section 9 Order”), while upholding the EA Order and dismissing the Respondents’ objection on arbitrability. The Calcutta High Court observed that “[i]n this background, there is no question of non-arbitrability of any of the disputes raised in this proceeding. All disputes raised in this proceeding are covered under the SPA and are ex-facie contractual disputes.” The High Court also held that “[t]he Arbitral Tribunal is fully competent to consider and decide all other issues including the jurisdictional challenge”. Indeed, the Calcutta High Court recorded in one of its earlier orders that “prima facie, having received the entire funds under the SPA, the Respondents are now entangling the Petitioners before every possible Police Station, Tribunal and Court while refusing to discharge their obligations under the SPA”.
A contempt proceeding considering Respondents’ non-compliance with the directions of the Calcutta High Court is also currently pending.
The Respondents appealed the Section 9 Order but failed to secure a stay on its effect or operation. The appellate bench of the Calcutta High Court observed that “[w]e make it absolutely clear that at this stage we are not interfering with any proceeding before any court or tribunal or arbitral tribunal which are free to proceed with any matter before it in accordance with law”. This reassured the respect Indian courts provide to an institutional arbitration.
It is noteworthy that the Respondents had participated at the Emergency Arbitration stage itself. However, subsequently, the Respondents chose not to appear in the arbitral proceedings despite several chances afforded to them by the ICC Tribunal. The Respondents instead chose to write numerous letters to the Tribunal to counter the arguments presented by UpHealth, attaching voluminous documents. The Tribunal has noted in the Award that “In this proceeding, Respondents have refused to participate. No Respondent signed the TOR. Instead, the Respondents have at certain points sent unsolicited email correspondence and documents as further described at Section IX below.” The Tribunal has devoted an entire segment titled ‘Respondents’ Conduct’ to demonstrate the obstructive steps taken by the Respondents and their persistent refusal to participate in the arbitral proceedings. The Tribunal further notes that “the Tribunal had punctiliously attempted to ensure that the Respondents were kept informed about all steps being taken in the proceedings and afforded several opportunities for them to participate in the proceedings and observe the directions given.” Thus, while the Respondents failed to appear before the Arbitration Tribunal (after appearing before the Emergency Arbitrator), they have de facto argued their case before the Tribunal throught these voluminous letters and communications.
UpHealth will take all necessary steps to enforce the Award and given the recent shift in the Indian arbitration environment to respect foreign arbitral awards in an attempt to make India an arbitration friendly seat, it is hopeful of enforcing the Award successfully in India. India’s bid to become an arbitration hub depends substantially on the determination with which Indian courts enforce foreign arbitration awards.
UpHealth were represented before the Arbitral Tribunal by DLA Piper and P&A Law Offices. Mr. Anand Pathak (Managing Partner) and Mr. Vijay Purohit (Partner) appeared before the Arbitral Tribunal to present arguments on aspects of Indian law, supported by a team of lawyers comprising of Shivam Pandey (Principal Associate), Shyra Hoon (Associate) and Nav Dhawan (Associate).
This victory marks another milestone in P&A's successful arbitration practice, further solidifying P&A’s reputation as leaders in the field. Notably, P&A has recently achieved notable successes in Investment Treaty Arbitration matters and International Commercial Arbitrations, showcasing their commitment to deliver favorable outcomes for their clients, starting as far back as the well-known Daiichi Sankyo arbitration and the recent arbitration of Amazon against Future Retail, among many others.