Chugh v. Kalra
Citation | 342 Conn. 815,271 A.3d 993 |
Decision Date | 12 April 2022 |
Docket Number | SC 20562 |
Parties | Rakshitt CHUGH v. Aashish KALRA et al. |
Court | Supreme Court of Connecticut |
John W. Cerreta, with whom was Joseph T. Nawrocki, Hartford, for the appellant (named defendant).
John G. Balestriere, pro hac vice, with whom were Stefan Savic and, on the brief, Matthew W. Schmidt, pro hac vice, for the appellee (named plaintiff).
Robinson, C.J., and McDonald, D'Auria, Mullins, Kahn and Keller, Js.
This case is the latest in a series of cases arising out of a failed business venture between the named plaintiff, Rakshitt Chugh,1 and the named defendant, Aashish Kalra.2 Chugh commenced the present action seeking compensatory and punitive damages for, inter alia, breach of partnership agreement, breach of fiduciary duty, and libel per se. A jury found in favor of Chugh on those three counts, awarding him damages in the amount of $9,400,0003 and authorizing the imposition of punitive damages, which the trial court awarded in the amount of $2,965,488.29. On appeal,4 Kalra claims that the trial court improperly denied his motions to set aside the verdict and for judgment notwithstanding the verdict because (1) Chugh's claims are barred by the compulsory counterclaim rule set forth in rule 13 (a) (1) of the Federal Rules of Civil Procedure,5 (2) as a matter of law, no partnership existed between the parties during the relevant time frame, and (3) with respect to the libel claim, the trial court improperly admitted the testimony of Chugh's expert witness on damages because there was no evidence to support the testimony. We agree with Kalra's third claim and, accordingly, reverse in part the judgment of the trial court.
Because issues related to the underlying action have been litigated on prior occasions in numerous other forums,6 when appropriate, we quote directly from the decisions in those cases in setting forth the relevant facts and procedural history. Chugh and Kalra, both of whom are naturalized citizens of the United States, were born in India but immigrated to the United States to pursue postsecondary educational and employment opportunities. In 2002, Chugh's brother, who had attended high school with Kalra in India, introduced them in New York City. The two men became friends, and, between 2002 and 2004, Kalra worked as a consultant for Byte Consulting, Inc., a company founded by Chugh in 2000. By 2004, they were meeting nearly every day for lunch. It was during one of their lunch meetings, in early 2004, that they agreed to form a partnership to pursue investment opportunities in India. At the time, India had just announced that it would open its doors to foreign investment in real estate and infrastructure projects in early 2005, an opportunity that they saw themselves as uniquely positioned to exploit. They agreed that theirs would be a 50/50 partnership and that all strategic decisions relating to the business, including where to set up offices and whom to hire, would have to be unanimous.
In furtherance of the partnership agreement, Chugh and Kalra established numerous companies around the world.7 Principal among them was Trikona Advisors Limited (TAL), an investment advisory company incorporated in the Cayman Islands. "Each man held a [50] percent equity stake in TAL through entities controlled by them. Chugh's shares were owned by ARC Capital, LLC (ARC Capital), and Haida Investments [Limited (Haida)], and Kalra's shares were owned by Asia Pacific [Ventures Limited (Asia Pacific)]. At the same time, the two men formed Trinity Capital [PLC (Trinity)], a closed-end fund listed on the London Stock Exchange, through which they solicited investments. Kalra and Chugh managed Trinity through TAL. Trinity paid TAL a fee for its management services, calculated at [2] percent of Trinity's net asset value plus a performance fee.
Trikona Advisers Ltd . v. Chugh , 846 F.3d 22, 26–27 (2d Cir. 2017).
Id., at 27. "TAL's collapse spawned a number of legal proceedings in the United States and abroad, [including] a [winding up] proceeding in the Cayman Islands and [a] federal civil [action] in Connecticut ...." Id.
8 (Citation omitted.) Id., at 27–28. Indeed, the Cayman court found that Asia Pacific's allegations against Chugh, including its claim that Chugh had stolen TAL's assets and destroyed its business, were "completely at odds with the evidence of what actually happened ...." In re Trikona Advisors Ltd ., Grand Court of the Cayman Islands, Docket No. FSD 18 of 2012 (AJJ) (January 31, 2013). The court concluded that, in fact, it was Kalra who had engaged in "blatantly improper self-dealing," calling Kalra's testimony to the contrary "disingenuous" and his evidence "wholly unreliable." Id. The court further stated that, after listening to Kalra testify over the course of several days, it had come to the conclusion that there was nothing he would not do, "no matter how dishonest, to ensure that ... Chugh ... [is] excluded from any share in [TAL's] remaining [net asset value]." Id. It further stated that Kalra had commenced an action in the United States District Court for the District of Connecticut against Chugh in which he had asserted all of the baseless allegations against Chugh that he had asserted in the winding up proceeding. See id. The court described Kalra's action in the District Court as "a thoroughly dishonest abuse of process." Id. On May 15, 2013, the Cayman court issued a "Default Costs Certificate," ordering Asia Pacific to pay ARC Capital's and Haida's litigation expenses in the winding up proceeding in the amount of $760,067.65.9
As the Cayman court indicated, "[o]n December 28, 2011, two months before the commencement of the [winding up] proceeding ... Kalra, through Asia Pacific, sued ... [Chugh, ARC Capital, and other related entities (Chugh defendants)] in the [D]istrict [C]ourt in Connecticut. After...
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