FSD Pharma Inc. (NASDAQ: HUGE) (CSE: HUGE) has emerged victorious in its prolonged legal battle with the company’s former CEO, Dr. Raza Bokhari. Following years of litigation and an intensive eight-day evidentiary hearing, an arbitrator ruled against Bokhari, granting FSD Pharma three awards, including damages and compensation for the company’s arbitration-related fees and costs.

On May 29, 2024, the United States District Court for the Eastern District of Pennsylvania confirmed FSD Pharma’s petition to validate the arbitration awards issued against Dr. Raza Bokhari by a Canadian arbitrator in 2022. With this confirmation, FSD Pharma will now proceed to seek final judgment against Bokhari.

The conflict traces back to a proxy battle initiated by Bokhari, which he ultimately lost. The discord originated from disagreements over acquisitions between Bokhari and FSD Pharma’s founders. Following his termination, Bokhari demanded $30 million for what he claimed was wrongful dismissal. Instead, the court ruled in favor of FSD Pharma, awarding the company the following payments from Bokhari:

  • $147,301.04, plus interest at a rate of 4% per annum from November 9, 2022, until the judgment is satisfied.
  • C$31,912.55, plus interest at a rate of 4% per annum from November 9, 2022, until the judgment is satisfied.
  • C$15,000.00, plus interest at a rate of 4% per annum from November 9, 2022, until the judgment is satisfied.
  • C$2,814,229.15, plus interest at a rate of 6% per annum from May 7, 2023, until the judgment is satisfied.

The case also caught attention for a humorous touch in the court’s opinion. Judge Wolson, writing the opinion, opened with a quote from the South Park movie song “Blame Canada,” humorously noting, “Raza Bokhari may be thinking, ‘It seems that everything’s gone wrong since Canada came along!’”

Judge Wolson further remarked on the irony of Bokhari’s situation, stating, “While it’s easy for him to claim unfairness considering the bind he’s created, Dr. Bokhari has himself to blame for this predicament—not FSD, not the arbitrator, and certainly not Canada. He has not offered reasonable grounds for why I should refuse to enforce the award against him.”

In his conclusion, Judge Wolson acknowledged Bokhari’s distress over the outcome, noting, “Dr. Bokhari might be upset that what started as a complaint against his former company ended as a seven-figure judgment against him. I don’t blame him. But him being upset does not give me leave to interfere with a foreign tribunal’s adjudication on the merits or denying FSD’s right to enforcement in this district.”

This ruling marks a significant victory for FSD Pharma, reinforcing the company’s stance and providing closure to a long-standing dispute.