IDBI Bank Secures $ 239 Million Debt Judgment in UK High Court
IDBI Bank secured a judgment of 239 million USD in the commercial division of the High Court of London against a Cypriot subsidiary of the Indian group Essar Shipping, one of the largest debt judgments obtained by an Indian bank in the English courts.
IDH International Drilling Holdco Ltd (IDH), the Cypriot parent company of the borrowers, is disappointed with the judgment and is considering its position on an appeal of the judgment, a spokesperson for the Essar group said.
IDBI, headquartered in Mumbai, had entered into loans totaling USD 148 million with two companies registered in Singapore – Varada Drilling One Pte Ltd and Varada Drilling Two Pte Ltd – for the construction of two platforms of jack-up drilling in March 2013.
IDH gave a corporate guarantee for the loan. The loan and guarantee were governed by English law and were therefore subject to the jurisdiction of the English courts.
“This is an important judgment both in size and in the message it sends to defaulters that Indian banks are willing and able to collect overdue debts through English courts,” said Nick Curling, Legal Director of TLT LLP, the London law firm. representing the IDBI.
According to the law firm, in July 2017, after borrowers failed to make scheduled repayments, IDBI served a formal demand for repayment of the principal amount, contractual interest, late interest, and fees. After another non-payment, the borrowers went into liquidation in Singapore, and in January 2020, TLT initiated proceedings in the UK on behalf of the IDBI.
Subsequently, IDBI, IDH and Essar Capital Holdings Limited, another company in the Essar Shipping group, entered into a “one-time settlement” agreement under which IDBI accepted partial payment in full and final settlement of the debt, provided that the sum be paid no later than February 28 of this year.
No such payment was received, and on March 1, the IDBI requested summary judgment, arguing that there was no real prospect of IDH successfully defending the claim at trial.
The case was heard in commercial court on May 21 by Deputy High Court Judge Leigh-Ann Mulcahy QC.
“The HDI is disappointed with the judgment because it had always maintained that this debt was the subject of a settlement agreement concluded with the lenders in 2020 and which is being implemented (and this remains the case)”, said the spokesperson for Essar. Group said in a statement.
“An IDH affiliate has already made a 10 percent down payment under this settlement agreement and is confident to complete the final stages of that settlement in the coming months following certain outstanding conditions. IDH is reviewing its position regarding an appeal of this judgment, ”said the spokesperson.
“Essar has, over the past two years, reimbursed more ₹140,000 Crs to its lenders. Such a repayment plan represents one of the biggest debt repayment exercises undertaken by a company in India, ”the spokesperson added.
The TLT team, which also included Indian bank litigation specialists Paul Gair (partner) and Alex Morris (lawyer), said the case demonstrates the ability of Indian banks to prosecute defaulting borrowers and guarantors in the UK. United.
The law firm is also currently representing a consortium of 13 Indian banks led by the State Bank of India in the enforcement of a £ 1.145 billion debt collection judgment against former Kingfisher Airlines boss Vijay Mallya.
Mallya, an accused in a bank loan default case of over ₹9,000 crore, has been in the UK since March 2016.
This story was posted from an agency feed with no text editing.
Never miss a story! Stay connected and informed with Mint. Download our app now !!