What Are the Legal Arguments in the Oasis Pharmaceuticals Dispute?

Question from Song, What Are the Legal Arguments in the Oasis Pharmaceuticals Dispute?

Answer from AI:

The dispute involving Oasis Pharmaceuticals Private Limited and Modern Life Saving Pharmaceuticals (MLSP) encompasses several complex legal issues. Below, we explore the arguments for both the respondent (Oasis Pharmaceuticals) and the claimant (MLSP) on four key issues.

1. Non-Release of Final Installment Based on EBITDA Targets

Arguments for MLSP (Claimant):

• MLSP might argue that the conditions for the release of the final installment were clearly stipulated in the Share Subscription Agreement (SSA). If the EBITDA targets were not met, they could contend that withholding the installment was justified and in accordance with the contractual terms agreed upon by both parties.
• They could also argue that the EBITDA target was a fundamental part of their investment decision, impacting their financial projections and the valuation of their investment.

Arguments for Oasis Pharmaceuticals (Respondent):

• Oasis could argue that external factors, such as market volatility or unforeseen economic conditions, impacted their ability to meet the EBITDA targets. They might invoke the principle of force majeure if applicable under the terms of the SSA or relevant laws.
• They could also dispute the calculation or interpretation of EBITDA, suggesting a different accounting method should have been used or that certain exceptions apply.

2. Forfeiture of Shares Owned by MLSP

Arguments for MLSP (Claimant):

• MLSP could argue that the forfeiture of shares was not in accordance with the SSA or the Shareholders’ Agreement (SA), lacking a valid legal or contractual basis.
• They might also claim that the forfeiture process violated their rights as shareholders, particularly if procedural safeguards were not followed.

Arguments for Oasis Pharmaceuticals (Respondent):

• Oasis might justify the forfeiture on grounds such as non-compliance with specific conditions under the SSA or SA that MLSP failed to meet.
• They could also argue that the forfeiture was a necessary action to protect the company’s financial health or to enforce compliance with the agreements.

3. Validity of the Share Call Notice

Arguments for MLSP (Claimant):

• MLSP could contend that the share call notice was invalid due to lack of proper board approval, arguing that it contravenes the governance procedures established in the SA.
• They might also argue that the notice was issued in bad faith or without the necessary factual basis, especially if the COVID-19 pandemic’s impact was not as significant as claimed.

Arguments for Oasis Pharmaceuticals (Respondent):

• Oasis could argue that the COVID-19 pandemic constituted an unforeseeable and extraordinary circumstance, justifying deviations from normal procedures under the doctrine of necessity.
• They might also claim that emergency measures were required to maintain the company’s operations and financial stability, which could include issuing a share call notice.

4. Authority to Sell Company-Owned Land

Arguments for MLSP (Claimant):

• MLSP could argue that the decision to sell company-owned land was beyond the scope of authority granted to the Managing Director and the Founding Shareholders under the SA.
• They might contend that such a significant decision required board approval or a shareholder vote, depending on the stipulations of the SA.

Arguments for Oasis Pharmaceuticals (Respondent):

• Oasis could argue that the sale was within the discretionary powers of the Managing Director, especially if urgent financial needs or strategic considerations necessitated the sale.
• They might also claim that the decision was in the best interest of the company and its shareholders, including MLSP, particularly if the proceeds were used to stabilize the company or fund essential operations.

Conclusion:
Each party in this dispute has potentially strong legal positions based on the interpretation of contractual obligations, the factual circumstances surrounding the disputes, and the application of relevant laws. It is advisable for both parties to consult with legal professionals to explore their legal strategies and potential resolutions. Disputes of this nature often benefit from mediation or arbitration, which could be stipulated in the SSA or SA as the preferred method of dispute resolution.