Accused in Delhi excise case, two firms engaged in a legal battle

While the Enforcement Directorate (ED) has levelled allegations of connivance between politicians, businessmen and private companies over irregularities in the now-scrapped Delhi excise policy 2021-22 case, two companies – Pernod Ricard India and Indo Spirits – are currently entangled in a legal battle among themselves over recovery of dues.
To be sure, the two firms are named as accused in ED’s charge sheet filed in the case – Pernod Richard is accused number 4 and Indo Spirits is accused number 11.
Pernod Ricard India, world and India’s second largest alcoholic beverages company, has initiated arbitration proceedings against Indo Spirits, the wholesale license holder company owned by businessman Sameer Mahendru and allegedly backed by Bharat Rashtra Samithi (BRS) leader K Kavitha, Arun Pillai and others, under the Arbitration and Conciliation Act, 1996 seeking to appoint a sole arbitrator to adjudicate its disputes arising out of their business arrangement in the excise policy.
Pernod Ricard, in its petition before the Delhi high court, claimed that Indo Spirits had approached it for sale of its liquor products “on a credit basis” to which it agreed as Indo Spirits issued a surety bond on December 21, 2021, guaranteeing the payment to it up to a sum of ₹200 crore towards unpaid amount.
Thereafter, Pernod supplied liquor products to Indo Spirits, which controlled nine retail zones in Delhi, on credit basis by granting a credit period of 66 days against each supply. “Petitioner (Pernod) continued to be consistent in supplying its products, respondents (Indo Spirits and its representatives) failed to make due payments against invoices raised by it for products supplied from June to August 2022…” the petition, filed in March this year, states.
Indo Spirits failed to clear the remaining dues of ₹152 crore towards the liquor supplied during this period, it claimed.
The excise policy ceased to exist from September 30, 2022, after the Central Bureau of Investigation (CBI) and ED launched probes.
ED has alleged that Pernod Ricard made Indo Spirits its wholesaler-distributor as per the directions of Vijay Nair (former communications in-charge of AAP and its leaders), in exchange of ₹100 crore kickbacks to the AAP leaders.
In a reply before the high court, Arun Pillai (who allegedly had a stake in Indo Spirits and was acting as K Kavitha’s representative), has said that there was no arbitration agreement between both the parties and that Pernod Ricard has filed this petition on “false, frivolous and baseless grounds which deserves to be dismissed in the interest of justice”.
Pillai has said in his reply, filed last month, that “there is no actual outstanding amount which stands due and payable by Indo Spirits and on the contrary, it is the respondents (Indo Spirits and its representatives) who are legally entitled to claim huge amount of money from Pernod Ricard for various claims and expenses they have incurred and continue to incur on behalf of Pernod”.
Advocate Nitesh Rana, who represents Pillai, said “There is no existing arbitration clause that can be invoked and the criminal proceedings in the excise policy 2021-22 are currently pending before the trial court. Therefore, invoking arbitration clause at this stage is illegal”.
Pernod Ricard didn’t respond to an email seeking comment.