Qatar Holding, a subsidiary of Qatar Investment Authority (QIA), has approached the Karnataka High Court seeking enforcement of a US$235 million arbitral award against Byju Raveendran and Byju’s Investments Pte Ltd (BIPL).

Byju’s, based in India, operates a major edtech platform.

The petition seeks US$235 million plus US$14 million in interest, calculated at 4% per annum compounded daily from February 28, 2024.

Qatar Holding had loaned US$150 million to BIPL in 2022 to part-fund the acquisition of Aakash Educational Services, with Raveendran providing a personal guarantee.

After alleged repayment defaults and a transfer of pledged shares, Qatar Holding ended the financing agreement and demanded early repayment of US$235 million.

A Singapore emergency arbitrator issued a global freezing order on the assets of BIPL and Raveendran up to US$235 million, which was later upheld by the Singapore High Court.

Byju’s and Raveendran are currently facing multiple legal cases in India and the US related to debt and alleged asset transfers.

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🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Debt-fueled acquisition strategies unravel when growth stalls

Qatar’s enforcement action reveals how Byju’s aggressive acquisition strategy became a liability when pandemic-era growth ended.

The company borrowed $150 million from Qatar in 2022 to help fund its $1 billion acquisition of Aakash Educational Services, which was completed in 20211. This represented a common pattern during the pandemic when edtech companies pursued rapid expansion through debt-financed deals.

However, Byju’s valuation collapsed significantly from $22 billion in 2022 to around $1 billion, making it impossible to service these obligations2. The company is now struggling with a separate $1.2 billion loan repayment and filed Chapter 11 bankruptcy for its US unit2.

The Qatar case demonstrates how acquisition debt becomes particularly dangerous when companies face liquidity crises, as lenders can accelerate repayment terms and seize pledged assets, which happened when Byju’s transferred Aakash shares in violation of loan covenants.

2️⃣ International arbitration offers stronger enforcement tools than domestic courts

Qatar’s successful arbitration in Singapore highlights why sophisticated lenders increasingly prefer international forums over domestic litigation.

The Singapore arbitration delivered a $235 million award in just four months after initiation in March 2024, with the final ruling issued in July1. This speed contrasts sharply with typical domestic commercial litigation timelines.

More importantly, the Singapore arbitrator issued a global asset freezing order against both Byju’s investment entity and founder Byju Raveendran personally, which was upheld by Singapore’s High Court1. This cross-border enforcement power allows creditors to pursue assets wherever they’re located.

The structure also enabled Qatar to hold Raveendran personally liable through his guarantee, demonstrating how international arbitration can address complex cross-border corporate arrangements more effectively than many domestic legal systems.

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