Vijay Mallya Loses $1.55 Billion Debt Recovery Case Filed by Indian Banks in UK

Indian liquor baron Vijay Mallya on May 8 lost a lawsuit that was filed in the United Kingdom by Indian banks looking to recover over £1.15 billion ($1.55 billion) from him. The lenders, including the State Bank of India and IDBI Bank Ltd., can enforce an Indian court ruling, which is linked to accusations that Mallya deliberately defaulted on around $1.4 billion in debt for his now-defunct Kingfisher Airlines Ltd., Judge Andrew Henshaw said in London, Bloomberg reported.

The banks can now implement the ruling given by an Indian court and sell Mallya’s assets in England as well as Wales in order to recover the dues. The judge also declined to overturn a global order freezing Mallya’s assets. The order stops Mallya from “removing any assets from England and Wales up to that value or to in any way dispose of, deal with or diminish the value of his assets in or outside of this jurisdiction, up to the same value,” Business Standard reported.

Lawyers of the TLT law firm in London, who are representing the banks, said that the ruling by Henshaw will allow them to implement the judgement given by the Indian Debt Recovery Tribunal with immediate effect.

“In dismissing Mallya’s application, the High Court has demonstrated its willingness to recognize judgments granted by courts in other jurisdictions, giving parties opportunities to enforce their judgments against any assets held here,” Paul Gair of TLT law firm was quoted as saying by PTI. Gair added that this case also sets a strong precedent for parties to secure a worldwide freezing order when enforcing judgments against willful defaulters.

The litigation listed 13 banks, including the State Bank of India, Bank of Baroda, Corporation Bank, Federal Bank Ltd., IDBI Bank Ltd., Indian Overseas Bank, as applicants.

Henshaw did not permit appealing for the ruling, which leaves Mallya’s lawyers with the only option of petitioning the Court of Appeal directly, Bloomberg reported. Lawyers representing Mallya did not comment after the hearing.

While presiding over the extradition hearing of Mallya at Westminster Magistrates Court in London on March 16, judge Emma Arbuthnot said that there were clear signs that banks went against their own guidelines while sanctioning some loans to Mallya. She had described the case as a “jigsaw puzzle” comprising different pieces of “massive evidence” to be put together to paint a picture, which she said she could now see “more clearly” than a few months ago.