Bombay High Court upholds interim arbitral order refusing relief to Max Healthcare in dispute with CARE Hospitals

The Bombay High Court on Tuesday upheld an interim order passed by the court-appointed arbitrator in the contractual dispute between Max Healthcare, Care Hospitals and TPG Inc. [Max Healthcare v. Care Hospitals].Justice Manish Pitale upheld a July 19 order passed by arbitrator and former High Court judge Justice SJ Kathawalla, who refused to grant urgent interim relief to Max and also refused to grant status quo as regards third-party rights. .Max Healthcare approached the High Court on May 3, 2023 to protect its rights under the term sheet signed with Care Hospitals and Touch Healthcare, Quality Healthcare and Evercare Group Management, to acquire the hospital chain. Quality Care is the company that operates Care Hospitals, while Touch Healthcare and Evercare are part of the US-headquartered fund TPG. Max filed a petition under Section 9 of the Arbitration and Conciliation Act to protect its contractual rights before commencement of the arbitration proceedings.Justice Milind Jadhav on May 3 directed the parties to adjudicate their issues before an arbitrator instead and appointed Justice Kathawalla as the sole arbitrator.The arbitrator was also directed to decide Max’s interim application under Section 17 of the Arbitration Act for urgent relief, within two weeks..The arbitrator passed an interim order on the Section 17 application against Max, which approached the High Court for the second time on July 27 to challenge the order. Max’s urgency was that Care Group had already assigned third-party rights to another company. This, it claimed, was in violation of a binding term sheet signed by Max with Care Hospitals. It thus sought an order of status quo on third-party rights..Max Healthcare was represented by Senior Advocate Janak Dwarkadas, who was briefed by a team from Nishith Desai Associates led by Partner Vyapak Desai.Care Hospitals was represented by Senior Advocate Darius Khambata, who was briefed by a team from Shardul Amarchand Mangaldas led by Partner Meghna Rajadhyaksha..A detailed order is awaited.