TLT has secured a US$239m judgment for IDBI Bank against a Cypriot subsidiary of Indian-based Essar Shipping Group.
The result is one of the largest ever debt judgments obtained by an Indian bank in the English courts and demonstrates the ability of Indian banks to pursue defaulting borrowers and guarantors in the UK.
IDBI had entered into loans totalling US$148m with two Singaporean registered companies – Varada Drilling One Pte Ltd and Varada Drilling Two Pte Ltd – for the construction of two jack up drilling rigs in March 2013.
IDH International Drilling Holdco Ltd (IDH), the Cypriot-registered parent company of the borrowers, gave a corporate guarantee in respect of the loan. The loan and guarantee were governed by English law and were subject to the jurisdiction of the English courts.
In July 2017, after the borrowers failed to make scheduled repayments, IDBI served a formal demand for repayment of the principal amount, contractual interest, default interest and fees.
After further non-payment, the borrowers entered liquidation in Singapore and, in January 2020, TLT commenced proceedings in the UK on behalf of IDBI. Subsequently, IDBI, IDH and Essar Capital Holdings Limited, another Essar Shipping Group company, entered into a “one time settlement” agreement pursuant to which IDBI agreed to accept a partial payment in full and final settlement of the debt, provided the sum was paid on or before 28 February 2021.
No such payment was received and, on 1 March 2021, IDBI applied for summary judgment, arguing there was no real prospect of IDH successfully defending the claim at trial. The case was heard in the Commercial Court on 21 May 2021 by Leigh-Ann Mulcahy QC sitting as a deputy High Court judge.
The judge rejected IDH’s allegations that the demand on the borrowers was not validly served such that no sums were due. She found there was credible evidence that the demands had been sent in accordance with the contractual provisions, noting there was no evidence provided by IDH to the contrary. The judge also rejected IDH’s arguments that the sums claimed were wrong and that further demands should have been made for default interest and fees accruing after the date of the formal demand, not least on the basis that this bore no relation to commercial reality.
The TLT team included Indian banking litigation specialists Paul Gair (partner), Nick Curling (legal director) and Alex Morris (solicitor), based in London.
Nick Curling, legal director at TLT, says: “This is an important judgment both in terms of its size and the message it sends to defaulters that Indian banks are willing and able to recover outstanding debts through the English courts. We are pleased to have once again acted for IDBI and secured this judgment for them.”
TLT is also currently representing a consortium of 13 Indian banks led by State Bank of India in enforcing a £1.145bn debt recovery judgment against Indian businessman Vijay Mallya.
In April 2021, TLT also secured a US$45m debt judgment for Bank of Baroda (Dubai), Bank of India (London), Union Bank of India (Hong Kong) and Export Import Bank of India (Mumbai) against a borrower based in the British Virgin Islands, a corporate guarantor based in Nigeria and a personal guarantor and promoter of the wider Sandesara group, Mr Nitin Sandesara.
Commercial property risks for SSAS providers and how to mitigate themRead more
The disputes landscape in 2021: England and WalesRead more
Evolving Cities - is retail and leisure regeneration the key to...Read more
SME disputes live Q&ARead more
The disputes and litigation landscape in 2021: Northern IrelandRead more
TLT secures Equinox licence for Glastonbury FestivalsRead more
TLT grows India-focused teamRead more
Personal insolvency in 2021Read more
The disputes landscape in 2021Read more
The pandemic has forced the majority of the workforce into a world of remote working. As a result, our cities are evolving.Read more
Issues that will impact the sector over the coming months - from future proofing social housing developments to managing offices post pandemic, green finance, and creating connected communities.Read more
Watch our video series for information on the legal issues that are affecting the real estate sector. Each...Read more
Helping you navigate your business through the risks and opportunities that Brexit will bring.Read more
The way people shop is constantly evolving, from the growth of online and the changing use of stores...Read more
The widespread disruption and closure of businesses caused by the Covid-19 pandemic and the subsequent national and local lockdowns has brought into sharp focus the question of available insurance cover for losses under...Read more
The pandemic has had a deep and long-lasting effect on the leisure, food & drink sector, forcing operators to embrace new ways of attracting and servicing customers.Read more
There's a growing demand for retailers to do more to attract the Purple Pound – the collective spending power of disabled shoppers, estimated to be worth around £274bn. We look at the opportunities, the legal issues and...Read more
Green finance is gaining speed, driven by global climate change pressures and the recognition of the vital role which sustainability plays in a resilient financial services sector.Read more
Advising on complex and reputationally sensitive matters involving litigation, arbitration, mediation and debt recovery.Read more
We are one of the UK's largest teams working in the field of financial services litigation. Our highly specialist lawyers have significant experience in acting and resolving a variety of disputes and claims that could impact an organisation's reputation.Read more
Our experts have extensive experience in international disputes and in-depth knowledge of the major arbitration centres and rules including ICC, LCIA, LMAA, ICDR and UNCITRAL.Read more