UpHealth Wins $110.2 Million In International Arbitration Against Glocal Healthcare
Beyond the arbitration, there are FIRs filed by Glocal Healthcare against UpHealth Holdings and litigations before the Calcutta High Court and a commercial court of Kolkata.
Global digital health services company UpHealth, Inc. recently secured a big legal win when the International Court of Arbitration ruled in favour of its subsidiary, UpHealth Holdings, against Glocal Healthcare Systems and its officers and shareholders.
They were ordered to pay UpHealth Holdings up to $110.2 million in damages.
In a media statement released by Glocal Healthcare, which offers technology-based healthcare services, it said that it has consistently asserted that this case demands a criminal investigation and involves issues that are inherently non-arbitrable.
Engaging in proceedings of this nature, which were deemed null and void and lacked subject matter jurisdiction, would run counter to the fundamental principles of legal procedure, it said.
In the background of this award, on Oct. 26, 2020, Glocal and its shareholders agreed orally to sell shares to UpHealth Holdings.
UpHealth Holdings alleged that Glocal Healthcare Systems violated its contractual and statutory obligations. Additionally, it accused Glocal Healthcare Systems of providing false information regarding its value during the negotiation of the Share Purchase Agreement.
Uphealth Holdings alleged that while entering into the SPA, both parties envisioned Glocal Healthcare becoming an indirect subsidiary of UpHealth Holdings, with it eventually owning 100% of Glocal Healthcare. Thereafter, Glocal was to appoint Uphealth’s designees to its board. However, that did not happen.
It was further alleged that Glocal Healthcare interfered with the auditing firm reviewing its finances, resulting in missed deadlines and regulatory problems. Even after an Emergency Arbitration Order required it to share financial information, Glocal Healthcare didn't follow through, making it harder for UpHealth Holdings to combine financial statements.
However, Glocal Healthcare did not participate in this arbitration process.
Beyond the arbitration, there are FIRs filed by Glocal Healthcare against UpHealth Holdings and litigations before the Calcutta High Court and a commercial court of Kolkata.
Let's dig deeper into these intriguing layers.
In a 2022 FIR filed by Glocal Healthcare against UpHealth Holdings, it alleged that the accused engaged in various illegal activities without Glocal's approval. This included falsely representing themselves, entering contracts on Glocal's behalf without authorisation, and devaluing Glocal's assets.
Additionally, the FIR alleged that the accused unlawfully transferred funds from Glocal's accounts and misappropriated company resources. They also illegally accessed and transferred sensitive data belonging to Glocal, violating privacy laws.
The FIR further accused it of cheating, breach of trust, and criminal conspiracy. Glocal demands legal action to recover misappropriated funds, retrieve stolen data, and restore access to its accounts and emails, it said.
Another FIR was filed in 2023 by Glocal Healthcare accusing UpHealth Holdings of fraud and demanding an investigation into its actions.
In its statement reacting to the award granted by the International Court of Arbitration, Glocal Healthcare mentioned that it is also in the process of filing a claim for damages against the said entities. Based on initial estimates, the same is likely to be quantified at over $500 million.
