Famed to be the developer of one of the world’s tallest residential towers- 23, Marina in Dubai, Darshan Hiranandani, Managing Director of Hircon International has been in news over a bitter dispute between him and his father Niranjan Hiranandani on one side and his sister Priya Hiranandani Vandrevala on the other.
Pursuant to the arbitration over the property dispute, an injunction to freeze the assets of Darshan Hiranandani in Dubai has been made on the application of Priya Hiranandani Vandrevala. Darshan Hiranandani will not be allowed to remove any of his assets from the Dubai International Financial Center (DIFC) up to a value of USD 80 million until the 20th of October or a further court order.
The arbitration was based on claims that Darshan and Niranjan had, in breach of the relevant provisions in a Business Association Agreement (BAA) on 14 May 2006, failed to refer certain projects to Priya or include her in their pursuit of those projects. The Tribunal found that Niranjan and Darshan had in effect concealed the projects from Priya and so caused her intentional loss in the amount of the principal damages awarded.
In early 2008, Priya had discovered that Darshan and Niranjan had been engaging in other real estate projects without her knowledge in violation of both the exclusivity provisions and the referral obligations under the BAA. Darshan and Niranjan also seem to have deliberately tried to dissipate or dispose of assets in particular by moving real property from partnership entities into corporate vehicles from which they can then be sold to a third party.
The tribunal recorded that Darshan and Niranjan had been propagating particular false charges against Priya of forging their signatures on the BAA. While Priya was found to be in possession of original documents, Darshan and Niranjan insisted that they had lost the records including a hard disk which couldn’t be found. Later, however, it was proved that the signatures were authentic and a hard disk containing 12,000 documents- found to be highly prejudicial to Priya’s case- were also communicated to Priya just two weeks before the liability hearing was supposed to commence.
In one of his pre-hearing witness statements, Darshan described negotiating and signing the BAA, claiming, he afforded it only limited attention, the sort of which he would not otherwise give to an important business document. On cross-examination, however, he accepted that he had thought through the terms of the BAA “very, very carefully.” Upon being asked if it was important to him to get the terms of the BAA right, he responded, “Yes”.
The Tribunal noted that it had been surprised by the extent of the amendment and the change of position on several matters. Also, the arbitrator made clear their dissatisfaction with the respondents’ course of conduct in producing the 30,000 some documents only on the eve of the quantum hearing.
The family dispute began in 2009, wherein Priya Hiranandani Vandrevala had stated that her father violated a business association agreement signed in 2006, claiming millions of dollars in lost profits. An arbitration tribunal chaired by Cherie Blair, a founding member of Matrix Chambers in London, who has significant experience as an arbitrator under the rules of the ICC, the LCIA, ICSID and the LMAA was set up to mediate.
The matter was heard by the London Court of International Arbitration in the year 2010. The panel, chaired by former British first lady Cherie Blair held that Niranjan Hiranandani had breached several clauses of the contract. It passed an interim award in Priya’s favor in 2013.