SAM & Co Litigation Team Successfully Appeals in Delhi HC on the Warrant Issued against three Director of Yu Televentures

In a temporary yet significant development, the Dispute Resolution Team of SAM & Co (acting on behalf of Yu Televentures and its three directors, Rahul Sharma, Sumeet Kumar and Vikas Jain) successfully appealed against the order of the Learned Single Judge of the Delhi High Court. The Learned Single Judge had held Yu Televentures and the individual Directors guilty of contempt of Court and issued bailable warrants against them.

The Litigation Team of Shardul Amarchand Mangaldas led by Mr. Ajit Warrier, Partner, Mr. Sandeep Grover, Principal Associate, Mr. Aditya Nayyar, Associate and Ms. Shreya Munoth, Associate filed an appeal against the Order of the Learned Single Judge. In addition to the Firm's lawyers, Senior Advocates Mr. P.V. Kapur, Mr. Sandeep Sethi & Mr. Dayan Krishnan were engaged by SAM & Co for the two appeals. There were two sets of appeal, one filed on behalf of Yu Televentures and the other on behalf of the individual Directors. The said appeals were heard by a Division Bench comprising Hon'ble The Chief Justice G. Rohini and Hon'ble Justice Rajiv Sahai Endlaw. 

As a background, the contempt petition was filed in a suit which Ericsson has filed against Micromax. The Single Judge, while adjudicating the contempt issue on an application filed by Ericsson, observed that there were common Directors for both Micromax and its wholly owned subsidiary, Yu Televentures. The Learned Single Judge held that “while in corporate entity may be a separate juristic person, it is nevertheless managed and run by human beings who give it direction and substance” and lifted the corporate veil. On lifting the corporate veil, the Learned Single Judge had observed that , “the corporate veil can be pierced and the parent company can be held liable for the conduct of its subsidiary... if it is shown that the corporate form is misused to accomplish certain wrongful purposes.”

The Division Bench of the Hon'ble Delhi HC, while setting aside the Single Judge's order, noted that the Learned Single Judge had not heard the appellants in the appeals and had proceeded on an erroneous basis. The Division Bench observes that, “That being the case, we are of the view that the finding of the learned Single Judge in the order under appeal that they are guilty of contempt cannot be treated as conclusive.”; The Division Bench further held that the appellants “shall subject themselves to the contempt proceedings and shall appear on 15.12.2015 through their respective counsels”.

At the hearing on 15.12.2015 before the Ld. Single Judge, the personal presence of directors was dispensed with. Further, Yu Televentures, purely as an interim arrangement, has tendered interim payments to Ericsson without prejudice to all its rights and contentions.

Practice Group: Dispute Resolution

Date of Judgement: December 15, 2015

Other Advisors: Ericsson was represented by Senior Advocates Gopal Subramaniam, CS Vaidyanathan, Neeraj K.Kaul and Pratibha M.Singh alongwith Advocates Chander M.Lall, Saya Choudhary Kapur, Ashutosh Kumar and Robin Koolwal.

Micromax was represented by Senior Advocate A.S. Chandhiok alongwith Advocates Sai Krishna, J. Sai Deepak, Sunil Dalal, Savni Dutt, Rachel Mamatha, Avijit Sharma.

About Shardul Amarchand Mangaldas & Co. (SAM & Co.)

Shardul Amarchand Mangaldas & Co. (SAM & Co.) is one of India’s leading full service law firms. Founded on almost a century of legal achievement, SAM & Co. reconstituted in May 2015 and has started anew. The Firm is known for its exceptional Mergers & Acquisition, Competition Law, Dispute Resolution & Arbitration, Regulatory Litigation, Capital Markets and Private Equity practices globally.

Its mission is “enabling business by providing solutions as trusted advisors through excellence, responsiveness, innovation and collaboration”. The Firm has been at the helm of major headline transactions and litigations in all segments of industry and business besides representing major trans-national corporates on their India entry and business strategy.

Headed by eminent practitioners Shardul Shroff and Pallavi Shroff, the Firm has more than 370 lawyers, including 70 partners across its six offices in India, which include – New Delhi, Mumbai, Gurgaon, Ahmedabad, Bengaluru and Kolkata.