A plea is filed by Bina Modi to restrain her son Lalit Modi from initiating arbitration proceedings in Singapore for settling the estate of her late husband, KK Modi. Bina Modi’s two other children, Charu Bhartia and Samir Modi had also joined her in the petition.
Being aware of the long litigation between the earlier generations of the parties, before commencing the hearing, I enquired from the senior counsels, whether or not the disputes were easily resolvable and why should this generation also repeat the mistake of the earlier generation, which has cost the larger family of the parties dearly,”
observed Justice Rajiv Sahai Endlaw in his 38-page order.
“However, finding that the parties presently are not in a mood to settle, and are ready to litigate, an attempt that was not taken further.”
The two factions in the KK Modi Group differ on the appropriate legal forum to be approached by the family members in the absence of a consensus regarding the sale of the estate and distribution of proceeds.
Bina Modi and her two children had the option of challenging the ruling by the Singapore Arbitration Court in front of a division bench in the Delhi High Court, and so, she did.
The senior counsel representing Mrs. Bina Modi and her two children, Advocate Mukul Rohtagi, argued,
“Since all the signatories to the trust deed containing the impugned arbitration clause are Indian nationals, having permanent residence in India, choice of a foreign location as the seat of arbitration is null and void, unenforceable and contrary to public policy.”
In his argument, he also stated that trust disputes can not be settled in foreign courts and therefore, should be resolved in the Indian courts.
“The KK. Modi Family Trust is hollow and the assets are being held by the trustees as tenants-in-common. Since the sale of assets has been triggered, the trust has ceased to exist,” argued Senior Counsels Abhishek Manu Singhvi and C Aryama Sundaram, who appeared for Lalit Modi.
As per the argument by Mr. Lalit Modi’s counsel, Mr. Modi is keen on selling the family stakes in group companies including the flagship ‘Godfrey Philips’, and distribute the proceeds among the heirs and their families.
Lalit Modi’s lawyers also argued that if the family members failed to reach a settlement within the mandatory 30 days from the demise of KK Modi, a clause in the trust deed allowed the assets to be sold and the proceeds distributed as per the trust agreement. According to the trust deed, the beneficiaries will get one year to complete the sale process.
Amarchand Mangaldas is the firm that is representing Bina Modi and her children and DMD Advocates is advising Lalit Modi.
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