The Bombay High Court recently appointed retired High Court judge Justice SJ Kathawalla as the arbitrator in a contractual dispute between Max Healthcare Institute and Care Hospitals and its private equity investor TPG Inc.
A single bench of Justice Milind Jadhav directed the parties to instead adjudicate their issues before the arbitrator in application filed by Max seeking urgent relief.
Justice Jadhav directed the arbitrator to decide the prayer for interim relief within 2 weeks.
Max Healthcare filed an application in the High Court to protect its rights under the terms of the term sheet signed with Care Hospitals, which included Touch Healthcare, Quality Healthcare, and Evercare Group Management Private to acquire the hospital chain.
Quality Care operates Care Hospitals, while Touch Healthcare and Evercare are subsidiaries of the US-based fund TPG (Texas Pacific Group)
Max Healthcare moved the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, to protect its contractual rights before the Care Hospitals and TPG group hospitals initiate arbitration proceedings.
Appearing for Max, Senior Advocate Janak Dwarkadas claimed that the respondent companies had assigned third party rights to another company.
He requested a court order to maintain the status quo on third-party rights.
Advocate Dwarkadas further contended that the parties were bound by the term sheet signed with Care Hospitals.
They claimed that TPG had rejected their bid in favor of another private equity firm, Blackstone Inc.
Max Healthcare was advised by Justice Jadhav to proceed with arbitration and present all arguments to the arbitrator.
He expressed his reluctance to proceed with the grant of status quo because third party rights had already been established.
However, Justice Jadhav made it clear that he was not expressing anything on the merits of the case.
