Delhi High Court Sends Medikabazaar–Vivek Tiwari Dispute to Arbitration

The Delhi High Court has referred a prolonged dispute between Medikabazaar (Boston Ivy Healthcare Solutions) and its co-founder and CEO, Vivek Tiwari, to arbitration.

Justice Jyoti Singh issued the order under Section 9 of the Arbitration and Conciliation Act 1996, following mutual agreement by both parties to resolve the dispute privately. Vivek Tiwari requested an urgent stay on the termination notice issued by Boston Ivy Healthcare (Respondent No 1) on 23 August 2024 and sought an injunction to prevent any coercive actions that could undermine his promoter rights and role in the company’s day-to-day management.

“On 11 February, a settlement was proposed, and since then we’ve been trying to find common ground. Unfortunately, the terms they offered were not acceptable to me. We had another court date on 17 March and then again on 2 April,” Tiwari stated. He further noted, “To my surprise, around 2 April the company activated the EOW (Delhi Police Economic Offences Wing) complaint. While they were talking about settlement and involving shareholders in open-court discussions, they simultaneously took actions that didn’t align with the spirit of settlement.”

Tiwari alleged that Medikabazaar’s board filed the complaint with the EOW just before his planned international vacation. He was scheduled to travel on 7 April but received an EOW notice on 4 April.

The respondents proposed Justice G.S. Sistani (Retd), a former judge of the Delhi High Court, as an arbitrator, and his appointment was approved. Both arbitrators will now select a presiding arbitrator, and the arbitration process will adhere to the DIAC regulations.

The court has ruled that the dispute will be resolved through arbitration, in line with the arbitration clauses outlined in the Shareholders Agreement (SHA) dated 17 March 2022 and the Employment Agreement (EA) dated 1 September 2021.

The Background

The development follows Medikabazaar’s removal of Vivek Tiwari from the company’s board last month, citing allegations of financial mismanagement, governance failures and fraudulent activities. This action came after the company had already ousted him as CEO the previous year, replacing him with Dinesh Lodha.

The controversy began last year with an anonymous whistleblower complaint alleging financial irregularities at the firm, implicating Tiwari, the then-recently appointed CFO Raman Chawla and 15 other employees.

Following the whistleblower complaint, Medikabazaar’s board appointed an independent investigator to examine the allegations. However, before the investigation report was submitted, auditor PwC raised concerns that Medikabazaar had inflated its gross-merchandise value by at least 60%, as the same medical supplies were repeatedly sold through various entities, artificially boosting the startup’s financial metrics.

After his termination, Vivek Tiwari filed a lawsuit against Medikabazaar and some of its investors in the Delhi High Court. In his petition, the co-founder accused the company’s investors, HealthQuad, Creaegis and Ackermans & van Haaren of conspiring to unlawfully strip him of his position and rights as a promoter.