SC calls for practical solutions in foreign decree enforcement
The Supreme Court issued notice in a Special Leave Petition filed by the Ras Al Khaimah Investment Authority (RAKIA), challenging the Telangana High Court’s dismissal of contempt proceedings against IQuest Enterprises, Swathi Reddy, Viatris Inc, and Nimmagadda Prasad. During the hearing, RAKIA also opposed the efforts of Matrix Pharma, Tianish Laboratories, Nimmagadda Prasad, Swathi Gunupati Reddy, and Pranav Reddy Gunupati to seek vacation of the Supreme Court’s status quo order dated 15 October 2025.
The matters were heard by a bench comprising of the Chief Justice of India, Justice Surya Kant, along with Justice Joymalya Bagchi, and Justice Vipul M Pancholi on Monday. Appearing for RAKIA, Senior Advocate Abhishek Manu Singhvi, urged the Court to issue notice in the contempt appeal, arguing that an undertaking not to deal with certain pharmaceutical assets had been breached through related entities. “The undertaking is given, and the undertaking is breached. These are the only two tests,” Singhvi submitted, adding that execution proceedings and contempt proceedings operate in distinct legal spheres. Emphasising RAKIA’s standing, he noted, “I am a sovereign authority of Ras Al Khaimah. I am not a private person.”
Senior Advocate Kapil Sibal, appearing for the respondents, disputed the existence of any undertaking. “There is no undertaking. That’s what has been found,” he said, while maintaining that the foreign decree “must be honoured, but not through contempt proceedings.” Observing that a reply from the respondents would “enlighten us better”, the Court issued notice in the contempt appeal.
Senior Advocate Shyam Divan, appearing for the respondent — Matrix Pharma, sought modification of the status quo order dated 15 October 2025 to enable Matrix to raise working capital from Bandhan Bank and complete the transaction to acquire pharmaceutical assets from Aurore Life Sciences Pvt. Ltd. He submitted that Matrix had already raised debt from Kotak and other institutional investors.
The Court noted that it would not cause an impediment to Matrix’s business transactions, provided RAKIA’s interests were adequately secured. The Court suggested that this could be achieved through a bank guarantee or a deposit with the Supreme Court to be held with a nationalised bank, and also encouraged the parties to explore mediation.
In 2022, the Ras Al Khaimah Civil Courts passed a final and enforceable judgment directing Mr Nimmagadda Prasad and Khater Massaad, former CEO of RAKIA, to jointly pay approximately AED 270 million (about USD 66 million (`544 crore), along with 6 per cent interest from October 5, 2021, towards losses suffered by RAKIA.
The damages arose from RAKIA’s investments in the Vadarevu Port, Nizampatnam Port and the Vanpic industrial corridor project in Andhra Pradesh.
