Bengaluru, Apr 28 (UNI) In a significant development, the Karnataka High Court has rejected petitions filed by Qatar Holding LLC seeking to restrain Byju Raveendran and Byju's Investments from disposing of assets worth USD 235 million, including shares in Aakash Educational Services Limited.
This decision brings temporary relief to Byju’s but also shifts the legal battle to the Singapore International Arbitration Centre (SIAC), where the company now faces intense scrutiny.
Justice Ashok S Kinagi, while dismissing the petitions under Section 9 of the Arbitration and Conciliation Act recently, observed that since an arbitral tribunal under the SIAC Rules had already been constituted, Qatar Holding must now approach the tribunal for interim relief instead of seeking intervention from Indian courts.
"The petitions are rejected; however, liberty is reserved to the petitioner to make necessary application either before the Emergency Arbitrator or the Arbitral Tribunal," the Court ordered.
To safeguard Qatar Holding’s interests, the Court directed that undertakings, interim orders, and status quo arrangements already in place would continue for a limited period of three months.
The dispute arose after Qatar Holding, which financed Byju’s acquisition of Aakash Institute with USD 150 million in 2022, terminated its financing arrangement citing defaults and demanded early repayment of over USD 235 million. Following this, Qatar Holding initiated arbitration proceedings at SIAC and secured an emergency award restraining Byju’s from alienating certain assets.
The Karnataka High Court noted that Byju Raveendran had taken inconsistent stands regarding the ownership of Aakash shares, warning that such contradictory conduct was unsatisfactory and attracted the doctrine of estoppel.
"A litigant can take a different stand at different times, but cannot take a contradictory stand in the same case," Justice Kinagi observed while criticising the conflicting affidavits submitted by Raveendran.
Senior advocate Uday Holla appeared for Qatar Holding, while senior advocate Promod Nair represented Byju’s.
The Court made it clear that any further clarifications or interim protections must now be sought before the SIAC tribunal, as the arbitral tribunal enjoys the same powers as courts under the Arbitration Act.
The Karnataka High Court's order grants Byju’s a three-month status quo on asset sales but significantly escalates the stakes. With fund-raising avenues restricted and credibility under scrutiny, Byju’s must now defend itself vigorously in the arbitration, facing mounting pressure to either settle its USD 235 million dispute or restructure its financial obligations.
UNI BDN CS