TLT has won a significant battle in the English High Court in a US$22m recoveries case for Punjab National Bank (International) Ltd. (PNBIL), London (subsidiary of PNB).
The case was brought against high profile Indian businessman Mr Pradeep Agrawal, chairman of Superior Drinks Pvt Ltd, which manufactures Coca-Cola drinks in India; Superior Industries Limited (SIL), which manufactures packaging materials; and others.
TLT defeated applications by two of the defendants challenging the jurisdiction of the English court to hear PNB’s claims, which concern the non-payment of a series of loan agreements and associated guarantees relating to the purchase and operation of a cruise liner, the MV Delphin.
After the borrowers defaulted on their loans, the bank issued proceedings and served them in India.
The defendants, whilst accepting they had entered into the various guarantees, sought to argue that the test for permission to serve out of the UK had not been met, citing various grounds, all of which were considered by the judge.
After a two-day long hearing, conducted entirely remotely due to the coronavirus pandemic, Mrs Justice Cockerill rejected all of the defendants’ arguments and ordered them to make an interim payment towards the bank’s costs of £70,000.
Her judgment provides useful precedent for other enforcement cases brought by Indian banks against promoters or guarantors, particularly her dismissal of the argument that the guarantees were invalid because of a lack of regulatory approval by the Reserve Bank of India.
On the point of whether a certificate of good service from a foreign (in this case Indian) judicial authority can be valid service of English judicial proceedings, Mrs Justice Cockerill also found that there is a strong presumption of service and that a claimant need not look beyond the certificate.
The TLT team was led by partner Paul Gair alongside legal directors Nick Curling and Claire Kershaw, solicitor Jack Hargreaves and trainee solicitor Alex Morris. TLT instructed barrister Tom De Vecchi of 3 Verulam Buildings.
Paul Gair, partner at TLT, says: “This is a significant victory for PNBIL as it means it can now pursue its enforcement action against the defendants in the English courts.
“It is also a landmark decision for similar cases, as the defendants’ arguments are commonly raised by Indian-based guarantors.
“It follows a series of similar cases where Indian banks have successfully pursued wilful defaulters in the English courts who are either residing in or have assets in the UK, or where the finance agreements are subject to English law and jurisdiction. This shows that this can be a successful enforcement route when pursued properly and under the right circumstances.”
On 14 July 2020, Mr Agrawal and SIL filed applications in the Court of Appeal seeking permission to appeal Mrs Justice Cockerill’s decision.
TLT is also currently advising a consortium of 13 Indian banks on a £1.05 bn debt recovery action in the UK against high profile Indian businessman, Dr Vijay Mallya.