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International Arbitration Dispute: Glocal Healthcare Systems Challenges Arbitral Tribunal's Ruling
International Arbitration Dispute: Glocal Healthcare Systems Challenges Arbitral Tribunal's Ruling
Introduction:
In a recent development in the realm of international arbitration, Glocal Healthcare Systems, a pioneering healthcare company, has contested a ruling by the International Court of Arbitration's arbitral tribunal. The tribunal found former SEBI chairman M. Damodaran and others associated with Glocal Healthcare Systems liable for breach of contract and ordered them to pay substantial damages to digital health company UpHealth Inc. However, Glocal has vehemently rejected the ruling, citing jurisdictional issues and alleging criminal fraud perpetrated by UpHealth.
The Arbitral Tribunal's Decision:
According to a release issued by UpHealth Inc., the arbitral tribunal directed Damodaran and other shareholders of Glocal Healthcare Systems to pay up to USD 110.2 million in damages, along with legal costs and expenses. The tribunal apportioned the damages based on the shareholders' percentage of ownership, with Damodaran being ordered to pay about Rs 206 crore. The dispute stemmed from the acquisition of Glocal and subsequent breaches of contractual obligations by the accused parties, who allegedly failed to relinquish control of Glocal to UpHealth Holdings Inc. despite the completion of the acquisition.
Glocal's Rejection of the Award:
In response to the tribunal's ruling, Glocal Healthcare Systems issued a statement rejecting the ex-parte award, contending that the tribunal lacked jurisdiction in the case. Glocal asserted that the tribunal's decision was one-sided and based on flawed premises, particularly considering the ongoing investigations into criminal fraud by UpHealth. Glocal emphasized that it had alerted Indian authorities and initiated legal proceedings against UpHealth's principals upon discovering evidence of fraud.
Key Arguments Raised by Glocal:
Jurisdictional Challenge: Glocal maintains that the arbitral tribunal had no jurisdiction to adjudicate the dispute, as the issues raised were non-arbitrable and involved allegations of egregious fraud perpetrated by UpHealth and its principals.
Allegations of Fraud:
Glocal alleges that UpHealth engaged in criminal fraud to induce Glocal's shareholders into the Share Purchase Agreement, leading to the wrongful acquisition of Glocal's shares. The company has filed FIRs against UpHealth's principals and initiated legal action in both India and the United States.
Nullity of the Award:
Glocal contends that any award issued by a tribunal lacking jurisdiction is legally null and void, and thus unenforceable. The company intends to challenge the validity of the award and pursue damages against UpHealth for its role in the fraudulent acquisition of Glocal's shares.
Conclusion:
The dispute between Glocal Healthcare Systems and UpHealth Inc. highlights the complexities of international arbitration and the challenges associated with enforcing arbitral awards. Glocal's rejection of the tribunal's ruling underscores the importance of procedural fairness and jurisdictional clarity in arbitration proceedings. As the legal battle unfolds, the outcome will have significant implications for the parties involved and may shape future approaches to resolving similar disputes in the healthcare sector and beyond.
- Glocal asserted that the tribunal's decision was one-sided and based on flawed premises, particularly considering the ongoing investigations into criminal fraud by UpHealth.
- The company has filed FIRs against UpHealth's principals and initiated legal action in both India and the United States.
- The company intends to challenge the validity of the award and pursue damages against UpHealth for its role in the fraudulent acquisition of Glocal's shares.
