US Court Vacates $25 Million Arbitral Award Against Former SEBI Chairman M. Damodaran
A United States court has vacated a $25 million arbitral award against M. Damodaran, former Chairman of the Securities and Exchange Board of India (SEBI), stemming from a contractual dispute with American healthcare firm UpHealth. The decision was made by Judge Sharon Johnson Coleman of the Northern District of Illinois while addressing UpHealth’s request to enforce the award.
The original award was granted in March 2024 by a tribunal that found Damodaran and other board members of Glocal Healthcare liable for contractual breaches related to a Share Purchase Agreement. UpHealth had acquired shares from Damodaran and others, gaining 94.81% ownership of Glocal by the end of 2021. Tensions arose when UpHealth sought to appoint its nominees to the Glocal Board, but the board failed to do so, leading to a contentious extraordinary general meeting (EGM).
During the EGM, an UpHealth employee requested a vote by poll for the appointments, but a Glocal director called for a show of hands instead, resulting in a vote that favored Glocal and blocked UpHealth’s designees. Damodaran argued that he was not present at the EGM and did not participate in the voting.
Despite his absence from the arbitration proceedings, Damodaran objected to the tribunal’s authority. The tribunal ultimately ruled in favor of UpHealth, rejecting the objections of Damodaran and others, and imposed damages exceeding $110 million, including the $25 million against Damodaran.
Damodaran’s attempts to contest the award in Indian courts were unsuccessful. In the US court, he contended that the tribunal’s decision was based on a “non-fact” or “clear mistake of historical fact.” The court noted that while Damodaran was not entirely blameless for the tribunal’s error due to his non-participation, his situation was more understandable compared to the other respondents. Damodaran had represented himself in a complex arbitration and argued that he had no real power regarding the board appointments after tendering his shares to UpHealth.
In granting Damodaran’s motion to vacate the award, the court remanded the case back to the tribunal for further proceedings, leaving the question of his liability open for reevaluation. He was represented by the US law firm Jenner & Block LLP, alongside Shardul Amarchand Mangaldas (SAM) in India, with a team led by Managing Partner Pallavi Shroff and several other key members.
(With inputs from agency)
Share your news, articles, deals, columns, or press releases with us! Click the link to submit and join our platform today.
