Glocal Healthcare Systems Pvt Ltd, the digital first healthcare provider from Bengal, is seeking $200 million in damages from the US-based UpHealth Holdings Inc, UpHealth Inc and its directors as it upped the ante in the legal battle over the control and ownership of the city-based outfit.
The Indian company filed a suit in the Delaware Bankruptcy Court, which has admitted the application and ordered discovery that allows parties to obtain non-privileged information with regard to their case. It also fixed the next hearing in January.
Glocal’s claims are based on nine counts (charges), according to the court document reviewed by this newspaper.
“This case arises from defendants’ wrongful, negligent, deceptive, and fraudulent conduct in luring plaintiffs into transactions whereby defendants attempted to swindle plaintiffs out of their thriving company, Glocal, and caused at least $200 million in damages to plaintiffs,” Glocal claimed in the complaint.
The Calcutta-based healthcare provider, founded by former bureaucrat Syed Sabahat Azim and his wife Richa Sana Azim, is locked in a legal dispute with UpHealth, which had proposed to acquire a majority stake in Glocal in 2020.
The parties fell out when the Azims went back on the deal alleging they were duped by the US company, leading to a clutch of litigations, civil and criminal, in various courts across the two countries.
The claim filed by Glocal in the Delaware bankruptcy court overshadows the $110.2 million award received by UpHealth from the International Court of Arbitration (ICA) in March. Glocal has since challenged the ex parte award when UpHealth moved Calcutta High Court to enforce it.
Seesaw battle
While Glocal moved to Delaware court, Uphealth claimed a ‘major legal victory’ in the US district court for the Northern District of Illinois, which confirmed the arbitration award issued by the ICA of the International Chamber of Commerce in favour of UpHealth Holdings.
The Illinois Court confirmed the ICA final award against Syed Sabahat Azim, Richa Sana Azim, Gautam Chowdhury and Kimberlite Social Infra Private Limited while vacating the ICA Tribunal’s finding of liability on the part of a fifth respondent, Meleveetil Damodaran, the former chief of India’s stock market regulator Sebi.
Damodaran, a minority shareholder of Glocal, used to be a director of the company between December 2010 and March 2019. He is now described as the mentor of the company.
Both Glocal and UpHealth have appealed the order on different grounds. While the US company is appealing against the Illinois court’s order to vacate the liability of Damodaran from damages and remanding it to the ICA Tribunal, the Indian firm is appealing against the order of confirmation of the award on the rest.
Glocal’s control
The Calcutta High Court last month restrained Glocal directors from operating two bank accounts in Abu Dhabi, United Arab Emirates and in Istanbul, Turkey. These accounts were not disclosed in the affidavit of assets filed by Glocal before the HC as part of the proceedings under section 9 of Arbitration & Conciliation Act.
However, the court rejected Uphealth’s plea for attachment of the bank account of Glocal.
“Insofar as the reliefs sought against Glocal are concerned, there is no question of grant of the same since learned counsel for the respondents is justified in arguing that after September 30, 2024, even in terms of the award, no monetary component of the award can be implemented against Glocal.”
Glocal counsel had argued before HC that since September 30, 2024 has already elapsed and there has been no transfer of control of Glocal in favour of UpHealth, there is no further scope of any enforceable award subsisting against Glocal.
“The entire claim in terms of the award which the petitioner can at best obtain is restricted now to additional damages amounting to $80.7 million and certain other ancillary damages which are available not against Glocal (respondent no.1) but against the other respondents.
“As such, no relief can be granted in respect of respondent no.1 at all,” Glocal’s counsel argued.