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Expertspeak: How Hinduja fracas can be resolved

By Dev Chatterjee
July 03, 2020 14:56 IST
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While the Hinduja brothers - Gopichand, Prakash, and Ashok Hinduja - did not indicate any move to begin talks with Vinoo Hinduja, top Indian lawyers said mediation would help both sides considering that the letter signed by the four brothers cannot trump other legal documents and challenge the validity of a registered will of SP Hinduja.

Family biz

Illustration: Dominic Xavier/Rediff.com

The dispute between the SP Hinduja family and the three other Hinduja brothers can be settled only through talks and not in the court rooms which is already going on in three separate jurisdictions, say corporate lawyers.

The complex holding structure of various group companies across various jurisdictions can lead to multiple and fresh litigation for years, they warn.

 

While the Hinduja brothers - Gopichand, Prakash, and Ashok Hinduja - did not indicate any move to begin talks with Vinoo Hinduja, top Indian lawyers said mediation would help both sides considering that the letter signed by the four brothers cannot trump other legal documents and challenge the validity of a registered will of SP Hinduja.

In a judgment titled as “A. Phiroz & Co. v. CIT, Bombay”, the Bombay high court has held that “a mere piece of paper on which appears a recital of certain rights and liabilities could not by itself asten the said rights and liabilities to any particular person.”

“The letter, although signed by all four brothers, does not constitute to be a legally enforceable document,” said Rajeev Bansal, senior advocate.

In the UK high court, the three Hinduja brothers relied on a July 2014 letter signed by the four brothers, which said the brothers appoint each other as their executors, and that assets held in any single brother’s name belong to all four.

The letter further said Gopichand, Prakash, and Ashok are authorised to carry out all steps to implement the letter.

The UK high court, however, rejected the July 2014 letter and appointed ailing SP Hinduja’s daughter, Vinoo, as his litigant friend.

Lawyers said the Hinduja Group is a conglomerate with its headquarters in London, and further the dispute is in regards to the validity of the Letter dated July 2, 2014.

“Even if the contents of the letter are upheld, then also it can only come into effect after the death of any one of the brothers.

"But once it comes to any dispute regarding companies registered under the Indian Companies Act, 2013 or 1956, the same shall only be enforced by Indian courts.

"Also, the details as to where the letter was signed and the details is respect to the residential status of the Hinduja brothers are not mentioned so as to decide which court will have the jurisdiction over the matter,” Bansal said.

While SP and Gopichand are British citizens, Prakash is a citizen of Monaco and Ashok is an Indian citizen.

HP Ranina, a senior corporate lawyer, said the concept of Hindu undivided family is turning out to be myth considering the fights going on among the business families over assets.

“The succession planning should be clear and the earlier the assets are divided, the better.

"The only people who will gain with prolonged litigation are the lawyers,” he said.

Multiple litigations

Vinoo Hinduja, along with her mother and sister, is seeking control of SP Hinduja’s assets and apart from British courts, has also moved courts in Jersey and Switzerland to seek ownership of SP’s assets.

The UK court order makes reference to other cases filed by Vinoo Hinduja.

“In relation to the Jersey proceedings, Vinoo’s interests and those of SP appear to me to be aligned.

"The defendants (the three brothers) suggest that the case Vinoo is running in Jersey is substantially different from the case she is seeking to run in England on SP's behalf.

"Based on what I have seen, I do not accept this.

"The nature of the proceedings, and the precise allegations put, are different, but that does not demonstrate any adverse interest.

"Vinoo’s case in Jersey is that the July letter is not relevant.

"In any event, the relief being sought in these proceedings appears to me to be essentially aligned with Vinoo’s objective in the Jersey proceedings,” the order said.

The UK order said the Hinduja brothers do not dispute that SP lacks capacity, and have relied on it as a basis for seeking to take control of Hinduja Bank, an asset in SP's sole name, relying on the July letter.

This is the subject of proceedings in Switzerland.

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Dev Chatterjee in Mumbai
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