Real estate firm Logix Group and London-based investment fund Alpha Real Trust will jointly auction a disputed property according to a Delhi High Court order, the developer said on Monday.
The dispute relates to Galaxia, an information technology special economic zone project in Noida. Alpha Real Trust and Logix had formed an equal joint venture to develop the 11.2-acre project. Alpha had put in Rs 45 crore in 2009. But the project did not take off due to a dispute over valuation.
This resulted in Alpha taking legal recourse in 2010 to exit the project. In January this year, the International Court of Arbitration ordered Logix to return the invested amount with interest as well as legal and arbitration cost. Thereafter, the developer approached the Delhi High Court calling the judgment illegal in terms of foreign direct investment exit norms.
On Monday, Logix said in a statement the two companies will jointly auction the asset under a High Court-appointed auctioneer. The proceeds from the auction will be distributed equally between them.
“With this 3rd November Order passed by the Hon’ble Delhi High Court the long pending dispute between Alpha Tiger Cyprus Investments and Logix Group comes to a logical conclusion,” it said.
An email sent to Alpha Real Trust did not immediately elicit a response.
Speaking to VCCircle, Logix Group chairman Shakti Nath said: “We want to maintain a healthy and amicable equation with all our past and future investors. This incident was unfortunate and we are happy that the asset will be sold under a legal framework.”
Alpha had formed three JVs including Galaxia with Logix in 2009. The first investment was bought back by Logix while the second land parcel was sold to Adobe at a discount. “Given the third project was IT SEZ, its valuation dropped significantly due to the recession following the global financial crisis. So, it was very difficult to find a buyer at that time. Plus, Alpha lost its India focus. They wanted us to pay them back, which was not acceptable to us,” said Nath.