US Court Sets Aside $25-Million Arbitral Award Against Former SEBI Chairperson Meleveetil Damodaran

A United States Court has set aside a $25 million arbitral award against Meleveetil Damodaran, the former chairperson of the Securities and Exchange Board of India.

The award was previously issued by an Arbitral Tribunal in Chicago, in favour of UpHealth Holdings Inc. as part of a broader damages ruling exceeding $110 million.

The arbitration proceedings had arisen from a dispute related to a share purchase agreement between UpHealth, Glocal Healthcare Systems Pvt. (an India-based healthcare company), certain shareholders and directors of Glocal, including Damodaran.

Under the concerned agreement, UpHealth acquired shares of Glocal held by Damodaran and other shareholders. However, conflicts arose over UpHealth's control of Glocal, leading UpHealth to initiate arbitration proceedings in 2022, alleging that Glocal’s directors and shareholders breached their contractual obligations.

The Arbitral Tribunal had previously held Glocal and its board liable, including Damodaran, and awarded UpHealth $110 million. Of this, $25 million was attributed to Damodaran personally.

The former chairperson then challenged the tribunal’s decision, arguing that there was no factual evidence linking him to the key allegations—specifically his alleged attendance and vote at a critical Extraordinary General Meeting related to the breach.

In its ruling, the US Court found that the tribunal had relied on a "non-fact" in determining Damodaran’s liability, as there was no evidence that he attended or voted at the EGM in question.

The Court noted that UpHealth had not even alleged that Damodaran had participated in the vote, undermining the tribunal’s conclusions. The Court ruled that the tribunal had "exceeded its powers" in holding Damodaran liable based on this assumption and remanded the case for further arbitration proceedings.

The Court also addressed challenges from other respondents, including Glocal’s board and directors, but upheld the arbitral award against them, confirming UpHealth's claims of breaches of the agreement by these parties.

The case will now return to the tribunal for a reassessment of Damodaran’s alleged role in the dispute, while the rest of the award remains in force against Glocal and its board.