Assisting Cancer Treatment Centre with Recovery from International Firm
Background:
A reputed cancer treatment centre in India intended to buy a linear accelerator machine (LINAC), which is specialized equipment used for the diagnosis and treatment of cancer. The cancer treatment centre identified a manufacturer and reseller of LINAC machines in the United States of America, which also had a subsidiary in India. After negotiations, the cancer treatment centre entered into a purchase agreement with the US and the Indian entity to buy the LINAC machine for USD 420,000. The cancer treatment centre paid 50% of the amount in advance.
Later, certain issues arose between the parties and the US company refused to deliver the machine, citing a failure on the part of the cancer treatment centre to meet certain technical specifications for housing the LINAC machine in a specialized ’vault ‘to contain the radiation that is emitted from the machine during its operation.
However, the cancer centre had not been informed that the construction of such a ’vault' had to be completed before the US company even purchased a LINAC machine for the centre. The US company then offered another machine of a different make to the cancer centre. Unfortunately, after the US company purchased the machine for the cancer centre, the latter cancelled the order, stating that the make of the LINAC machine was not pre- approved by the regulatory authorities of India.
The cancer centre sought refund of the money advanced, which the US company refused to give, stating that they had already purchased the LINAC machine on the go- ahead of the cancer centre and, therefore, could not refund any amount.
Challenges:
To recover the amount advanced by the cancer centre from the company in the US through appropriate legal action in India.
Approach/Strategy:
The cancer centre was advised to lodge a criminal complaint on various counts against the concerned director of the US Company as well as against an officer of the Indian company.
An investigation was carried out into the Indian company's affairs and a complaint was sent to the Atomic Energy Regulatory Board of India based on the discoveries made in the investigation.
As anticipated, the officer of the Indian Company approached the High Court for quashing the FIR lodged with the police. The strategy was to oppose any proceedings for the quashing of the FIR with full vigour, which would send the message to the US company that they could not escape the repercussions of the matter on account of their director being out of India.
Once the petition before the High Court was rejected, a lawyer representing the US company called for negotiations for a settlement. Full rounds of negotiations over telephone took place for months, within which time the pressure was maintained on the US and Indian Company to hammer out an acceptable settlement.
Once a settlement was arrived at, assistance was provided to the director of the US Company and the officer of the Indian Company to approach the High Court for seeking quashing of the criminal cases against them on the strength of the settlement, and also inform the Atomic Energy Regulatory Board of India of the settlement.
Impact:
Negotiations led to monetary settlement acceptable to the cancer centre with a commitment from the US and Indian companies to not make any negative reference about the cancer centre at any time pursuant to the settlement.
The quashing applications were filed on behalf of the US director and Indian officer and the criminal cases were quashed. The complaint before the Atomic Energy Regulatory Board was also withdrawn.