Shaadi.com never gave its 2006 investor an exit — the fight spread across six courts

In 2006 Mauritius-based WestBridge Ventures invested INR 166 Cr in People Interactive (India), the parent of Shaadi.com. The shareholders' agreement gave it exit routes: an IPO within five years, sale to an independent third party other than a significant competitor, redemption and buyback if no IPO happened, and drag-along rights if the company failed to buy back shares within 180 days.

No IPO came. According to Inc42, trouble began in 2017 when WestBridge entered talks to sell its shares to Info Edge, owner of rival matchmaking site Jeevansathi.com. Founder Anupam Mittal refused consent and filed a petition at India's National Company Law Tribunal (NCLT) alleging oppression and mismanagement. WestBridge exercised its buyback option. The company converted its 1,000 preference shares into 580,779 equity shares in December 2020 but could not complete the buyback, and WestBridge issued a drag-along notice on 8 October 2021.

Singapore courts, applying the arbitration clause, granted WestBridge an anti-suit injunction. The Singapore High Court found that Mittal and other directors violated it by going to the NCLT and then the Bombay High Court, and fined them $100K. The Bombay High Court and NCLT granted Mittal interim relief, and Indian lawyers told Inc42 that an ICC award on oppression claims would be hard to enforce in India. As of September 2024 the NCLAT was due to hear the matter.

Singapore court fined Mittal and other directors $100K for breaching an injunction; at least six courts or tribunals involved; FY22 loss INR 13.5 Cr.

The 2006 agreement set a five-year IPO window and a buyback fallback, and the company reached neither milestone nor completed the buyback it was obliged to make.

A sale of WestBridge's stake, or a drag-along, could pass control to Info Edge, a direct competitor of Shaadi.com.

Mittal took the dispute to the NCLT despite an injunction from Singapore, where the agreement set arbitration, which put directors in breach of the court's order.

India and Singapore treat oppression claims differently: Indian bodies hold them non-arbitrable while Singapore enforced the arbitration clause, so the two sides could not reach a single ruling.

Exit clauses are promises you must be able to pay. Unmet, they hand an investor drag-along and sale rights that can put a rival in control of your company.

Inc42 reported in September 2024 that the NCLT was due to hear the case on 30 October and the NCLAT on 18 September. A fund manager quoted by Inc42 said the dispute had damaged WestBridge's brand to some extent. Shaadi.com recorded a profit of INR 8.5 Cr in FY21 and a loss of INR 13.5 Cr in FY22; FY23 accounts had not been filed. Inc42 noted that adverse rulings could reduce the promoters' control.