Summary: The Bombay High Court has decided that a family argument involving Prabodh Jamnadas Kothari and Vikram Jamnadas Kothari and the Dosti Group over Sun Pharma shares should be settled through arbitration. This decision comes after years of legal battles and disagreements over a share purchase agreement and an escrow arrangement.
The case revolves around a share purchase agreement from 2010 between the Kothari family and the Dosti Group. The agreement involved selling a company with a significant piece of land. The payment was divided into three parts, but the last payment of ₹10 crores was never made.
To ensure payments, an escrow agreement was set up with Barclays Wealth Trustees as the escrow agent. Lakshdeep Investment & Finance secured the payment by depositing Sun Pharma shares. However, the Dosti Group failed to notify the Kotharis about tenant approvals, which were crucial for releasing the final payment.
In 2021, the Dosti Group filed a criminal complaint against Prabodh Jamnadas Kothari and Vikram Jamnadas Kothari, alleging fraud. The Kotharis responded by asking for arbitration in March 2022, but the Dosti Group filed a lawsuit claiming they owed nothing more under the agreement.
Judge Somasekhar Sundaresan ruled that the matter should go to arbitration, dismissing the Dosti Group's argument that the Kotharis had given up their right to arbitrate. The court emphasized that arbitration agreements should be honored, and disputes should be resolved by the arbitration panel.
"The Section 11 Court must not wade into the territory earmarked for the arbitral tribunals," the judge stated.
The court has directed the Mumbai Centre for International Arbitration to appoint an arbitrator. The parties are to appear before the arbitrator to sort out the details and schedule the proceedings.
The court imposed a cost of ₹2.5 lakhs on the Dosti Group and Lakshdeep for delaying the arbitration process. This decision highlights the importance of sticking to arbitration agreements and the consequences of dragging out legal battles.
