The Calcutta High Court on September 19 accepted a settlement between Indian digital healthcare company Glocal Healthcare Private Limited and US-based UpHealth Holdings Inc, putting to rest a long-running multi-million cross-border dispute between the two healthcare companies [Glocal Healthcare Systems Pvt Ltd v. Uphealth Holdings Inc and Ors and connected matters].
The dispute, which had gone through multiple rounds of litigation in the US and India, had made headlines since former SEBI Chairman M Damodaran is one of the promoters of Glocal.
The litigation concerned a Share Purchase Agreement between UpHealth, and Glocal, certain shareholders and directors of Glocal and Damodaran (a mentor at Glocal).
In June 2021, UpHealth completed the cash purchase of shares from Damodaran and other shareholders of Glocal. By the end of 2021, UpHealth held 94.81% of Glocal shares.
However, issues arose after UpHealth sought to appoint its designees to the Glocal Board. UpHealth accused Glocal of refusing to relinquish control, whereas Glocal accused UpHealth of fraudulently inducing its shareholders to enter into a share purchase agreement when it did not have any intention to fulfill its (UpHealth's) end of the bargain. Glocal also claimed that it cancelled the share purchase agreement over such fraud. It even filed criminal complaints against UpHealth in West Bengal.
The dispute took an interesting turn on March 18, 2024, when the International Court of Arbitration (ICA) of the International Chamber of Commerce (the “ICA”) found Glocal and its directors liable for a breach of contract and directed them to pay around $110.2 million in damages to UpHealth.
Of this amount, M Damodaran was ordered to pay over $25 million. However, Damodaran later got relief from a US Court, which set aside the arbitral award insofar as it concerned him. The arbitral award in respect of other Glocal directors was upheld.
Glocal, meanwhile, approached the Calcutta High Court challenging the validity of the March 2024 ICA ruling against it.
However, with the latest settlement between Glocal and UpHealth, the $110.2 million arbitral award would not have to be given effect to.
The settlement was reportedly accepted by the US Bankruptcy Court for the District of Delaware, where UpHealth Holdings Inc is facing bankruptcy proceedings.
It was also reported that the settlement involves an agreement for Glocal to receive $37 million from UpHealth Inc.'s liquidation and will pay $10 million to UpHealth to buy out any equity held by UpHealth in Glocal, resulting in a $27 million gain for Glocal.
With this deal, UpHealth's claims in Glocal, including its shareholding and intellectual property, would be released, according to a press release.
The said settlement was accepted by the Calcutta High Court on Friday.
"The terms of settlement are in form and lawful … in view of the settlement arrived at between the parties (the connected cases), are disposed of, upon passing the directions as contained in the draft consent order which is made a part of the record. Let the draft consent order and the terms of settlement be deemed to be a part of this order," Justice Sabyasachi Bhattacharyya's order said.
The Court further appreciated the counsel involved in the matter for facilitating the settlement of a long-drawn litigation.
Glocal was represented by advocates Rushab Aggarwal, Riddhima Aggarwal and Japnish Singh Bhatia from Chambers of Rushab Aggarwal and advocates Sanjay Basu, Piyush Agarwal and Debjyoti Das from Aquilaw.
UpHealth was represented by P&A Law Offices.
In the US litigation, Glocal was represented by Gregory William and Bhushan Satish from Sidley Austin LLP while UpHealth was represented by DLA Piper.
[Read Order]