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Gangwal seeks rejection of Bhatia plea in US court to get documents

Bhatia has moved the London Court of International Arbitration (LCIA) in New Delhi on October 1 in his allegations of Gangwal’s breach of the contract.

, ET Bureau|
Updated: Nov 11, 2019, 07.30 AM IST
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MUMBAI: IndiGo cofounder Rakesh Gangwal has sought rejection of partner Rahul Bhatia’s application in a US court, for retrieving documents to be used in a separate case he filed against Gangwal on alleged violation of a shareholders’ agreement between the two.

Bhatia has moved the London Court of International Arbitration (LCIA) in New Delhi on October 1 in his allegations of Gangwal’s breach of the contract. He then approached the southern district court of Florida, seeking “to obtain documents and testimony related” to Gangwal’s alleged breach.

In his response to this application in the US, Gangwal’s attorneys said the law invoked in the filing of the application “does not apply to private commercial arbitrations”, like the alleged shareholder agreement breach. ET has seen a copy of his response.

Emails sent to a spokesperson for Bhatia’s IGE Group and Gangwal elicited no responses till press time Sunday.

Gangwal’s attorneys said under the LCIA case, an arbitral tribunal would shortly be set up and itwould issue an order for disclosure of all relevant documents and testimony from both parties.

“Respondents are fully participating in that process and will cooperate with the document disclosure procedures laid down by the arbitral tribunal. The current application is thus wholly unnecessary and redundant, and is a blatant attempt to ‘jump the gun’ and get one-sided discovery outside the framework created by the arbitration clause and the LCIA India Rules,” Gangwal’s response said.

The response also said the petitioners, meaning the Bhatia camp, violated the arbitration clause under the LCIA by filing a separate application as, by agreeing to an LCIA arbitration, the “parties shall be treated as having agreed not to apply to any court or other judicial authority for any order available from the arbitral tribunal under the LCIA India rules".

Meanwhile, Bhatia and his IGE Group have nominated Jan Paulsson, a partner of Three Crowns law firm in Washington, as their party-appointed arbitrator for the LCIA case. Gangwal’s team has nominated Stephen Ruttle, a barrister with Brick Court Chambers in London, other legal documents showed. The LCIA is expected to shortly confirm the appointments, the documents said.

Gangwal, in July this year, wrote letters to India’s capital markets regulator, the finance ministry and the Prime Minister’s Office, seeking an intervention on several contentious issues at IndiGo.

These included unusual shareholder rights — the selection and appointment of IndiGo’s chairman and key management personnel — enjoyed and allegedly misused by Bhatia, alleged related-party transactions between IndiGo and companies affiliated to the IGE Group such as Accor Hotels and other issues such as the absence of a woman director. The letters were made public. Gangwal later also set up a website to post regular updates on his feud with Bhatia and the issues therein.

There were subsequent board meetings where most of the issues were discussed and resolved, giving the impression of a truce between the two partners.

But in October, Bhatia moved the LCIA in New Delhi and then approached the Florida court.
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