IndiGo Co-Founder Rahul Bhatia Takes His Partner Rakesh Gangwal To A US Court For Alleged Breach Of Agreement

IndiGo airlines co-founder Rahul Bhatia has filed a case against his fellow promoter Rakesh Gangwal in the District Court of Florida, United States.

Bhatia has sought information related to Gangwal allegedly breaching the latest shareholders’ agreement signed between the two partners in 2015, which is set to expire in November.

The application filed by Bhatia in the District Court of Florida has described Gangwal as an “American businessman” who resides in Miami-Dade, Florida, and in Fairfax, Virginia, adding that his RG Group, consisting of Gangwal, his wife and their Chinkerpoo Family Trust, has business in Florida.

As per the application for the case filed in the District Court of Florida, the “documents and testimony” obtained from Gangwal will be used in a case Bhatia has already filed on the alleged shareholders’ agreement breach in the London Court of International Arbitration (LCIA), India.

“Petitioners seek to obtain documents and testimony related to breaches by Gangwal and/or the other members of the RG Group (owned by Rakesh Gangwal and affiliates) of the second shareholders’ agreement and their obligations to perform the second shareholders’ agreement in good faith under Indian law,” the application stated.

According to the shareholders’ agreement, the London Court of International Arbitration, India (LCIA) is the court to be approached in the event of any arbitration related to the agreement.

The requested documents and information specifically relate to events, time periods, and relationships that Gangwal or his group “exploited to mount a campaign to dilute the critical controlling rights” of Bhatia’s IGE Group, it said.

It may be recalled that on October 15, Bhatia and his IGE Group had filed a similar petition in the Maryland District Court against IndiGo’s independent director Anupam Khanna for allegedly having “acted in concert” with Gangwal in his breach of the shareholders’ agreement.

A subsequent subpoena from the Maryland District Court had sought to extract documents of Khanna’s correspondence with Gangwal.

Incidentally, the dispute between the two IndiGo co-founders became public in July after Gangwal first complained to the Securities and Exchange Board of India (SEBI) alleging that Bhatia indulged in questionable related-party transactions. According to Gangwal, the shareholders' agreement provided Bhatia unusual controlling rights over IndiGo.