The Supreme Court on Tuesday while hearing the Kirloskar family dispute over the deed of settlement case (DFS) stayed the Bombay High Court's order directing arbitration and urged the brothers to consider the resolution of the family dispute through mediation.
The family feud about the 133-year-old corporate group, Kirloskar Brothers Ltd relating to the assets of the group reached Supreme Court earlier in July.
Sanjay Kirloskar, the promoter of the Kirloskar Brothers Ltd -- a pump manufacturing company that is a household name in the country -- had moved Supreme Court against a Bombay High Court order. The HC had ordered arbitration to solve his dispute with his brothers, Atul (CMD of Kirloskar Engine Oils Ltd) and Rahul (CMD of Kirloskar Pneumatic Company Ltd).
Resolution through arbitration is sought by all the members of the country's richest family business groups.
Sanjay requested the SC to quash the Bombay HC order and asked the parties and all other family members to submit to the civil court at Pune. At the same time, Atul filed a caveat to prevent Sanjay from getting an ex-parte order from the apex court.
On Monday though, SC suggested both sides give names of mediators for resolution of the dispute. The brothers can also choose to appoint a retired SC judge to oversee the mediation process. Families can't keep fighting in courts for years, such disputes are not good for any reputed family or industry, the court said.
Sanjay also claims that his brothers and spouses (after the signing of DFS) sold their shares in KBL to Kirloskar Industries Ltd in a breach of the settlement.
They had earlier breached a non-compete agreement when Atul and Rahul acquired La Gajjar Machineries in 2017 -- a competitor for Sanjay's Kirloskar Brothers Ltd. According to Sanjay, his brothers cannot run the acquired company as per a family settlement the brothers signed in 2009.
Sanjay said he had persuaded Vijay Kelkar to mediate between the warring families for a settlement but it failed.
Then in 2017, the brothers incorporated Kirloskar Proprietary Ltd with an equal partnership of all members of all branches. This was done to hold and protect all trademarks of the Group. But Atul and Rahul, according to Sanjay, in league with Gautam Kulkarni ousted Sanjay by not supporting his re-appointment.
Then Sanjay filed a civil suit for the implementation of DFS in letter and spirit and to restrain other cogroup companies from venturing into the pump manufacturing business. He also sought Rs 750 crore from Atul and Rahul for breach of the non-compete clause.
But as soon as the trial court agreed to proceed with the DFS suit, Rahul and Atul, along with other members of the extended family (having stakes in family's businesses) moved to Bombay HC and claimed they were not a party to the DFS. They sought and arbitration for the resolution of differences and won it.
But Sanjay, his wife and two children challenged this order and moved SC.