Kirloskar family feud: Status quo by SC, calling for mediation

Kashmir Times. Dated: 7/28/2021 11:53:28 AM

NEW DELHI, Jul 27: The Supreme Court on Tuesday ordered a status quo in Bombay High Court order and a civil suit in a Pune court in the Kirloskar Brothers Limited (KBL) family feud related to the assets, while asking all to resolve the dispute through mediation.

The company's CMD Sanjay Kirloskar came to the top court, challenging the High Court order directing an arbitration in the case. A Bench of Chief Justice N V Ramana and Justice Surya Kant issued notice, seeking replies within six weeks.

Sanjay's dispute is with his brothers Rahul and Atul. The group founded in 1888 by late L K Kirloskar is today run by the fourth generation of Kirloskars -- Sanjay, Atul, Rahul and their cousin Vikram handling different streams of businesses.

"We both (judges) feel it is one of the reputed families and company. We feel the issues are sorted out by mediation or arbitration which is better in the interest of the company," the bench said.

"All the lawyers can sit together and solve a way out and if you want some external assistance we can appoint some retired judge. Why do you unnecessarily want to fight this litigation? You can have some alternative resolution. There must be some common family friends and they can mediate," the bench said.

The dispute relates to the deed of family settlement made in 2009, relating to the assets of more than 130-year old Kirloskar group. The appeal dubs the High Court order as factually and legally untenable with serious errors of fact and law.

"The Judge has grossly erred in referring the Deed of Family Settlement (DFS) Suit and the parties thereto, to arbitration even though certain entities/persons who are parties to the suit are not signatories of DFS, hence not signatories to the arbitration agreement," the appeal stated.

It contends that the DFS is limited to any disputes relating to the Kirloskar Institute of Advanced Studies and Kirloskar Foundation and not other disputes. The appeal says the DFS is to resolve unanimously any disputes relating to the two outfits or through two arbitrators -- Anil Alwani and C H Naniwadekar -- and if they differ, it should go to the third arbitrator -- Srikrishna Inamdar.

The dispute basically arose on Rahul and Atul violating another DFS clause that no one in the family will compete with other members in the business. KBL's charge is that this clause has been violated by the two brothers who had taken a stake in a pump manufacturing company La Gajjar Machineries Pvt Ltd, which is its competitor in manufacture of pumps.

KBL had earlier filed a suit in a Pune civil court seeking Rs 750 crore damages for violation of the agreement whereas Rahul, Atul and others moved the Bombay High Court to refer the matter to arbitration, which the High Court agreed.



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