In a major boost to the consortium of 13 Indian banks to recover its debt of nearly $1.55 billion from fugitive liquor baron Vijay Mallya, a UK court on Tuesday upheld a ruling by Karnataka’s Debt Recovery Tribunal that froze worldwide assets of the ‘king of good times’. The worldwide freezing order prevents Mallya from removing — or diminishing — his assets in England and Wales.
The judgment by London’s Commercial Court Queens Bench division, dismissing Mallya’s applications, will enable the banks to enforce the tribunal’s ruling against his assets in the UK. The tribunal had also concluded that Mallya owed the banks a sum of Rs 6,000 crore plus interest.
The case was the first instance of an Indian tribunal’s ruling being registered in the English high court and was recorded in November 2017. The case is part of the litigation in which the banks are seeking to recover the loan lent to now-defunct Kingfisher Airlines. Importantly, the ruling will serve as a morale booster for the Indian government in the extradition proceedings which are underway at the Westminster Magistrates Court. The case is scheduled for a final hearing on July 11. Mallya was arrested on an extradition warrant in April last year and is presently out on a 650,000-pound bail bond.
Judge Andrew Henshaw has also refused permission to appeal the ruling, which leaves Mallya’s lawyers with the only option of directly petitioning the UK’s Court of Appeal. During the hearing, the banks reiterated that Mallya was a wilful defaulter after he failed to clear his debt despite having the financial means. However, Mallya’s lawyer argued that the defaults stemmed from financial losses incurred by Kingfisher Airlines and there was no malafide intention for not returning the money.
Paul Gair of law firm TLT, which represented the consortium of Indian banks, said in dismissing the liquor baron’s applications, the court had shown its willingness to recognise judgments granted by courts in other jurisdictions. “In dismissing Dr Mallya’s application, the High Court has demonstrated its willingness to recognise judgments granted by courts in other jurisdictions, giving parties opportunities to enforce their judgments against any assets held here. This case also sets a strong precedent for parties to secure a worldwide freezing order when enforcing judgments against willful defaulters,” PTI quoted Gair as saying.
The businessman was represented by Nicholas Peacock and George Heyman of Maitland Chambers, who were instructed by the law firm Macfarlanes LLP. The tribunal’s ruling on assets freeze had forced Mallya to live on a weekly allowance of 5,000 pounds, which his lawyers managed to boost to 18,325.31 pounds a week at a hearing earlier this year. On Tuesday, a Delhi court issued fresh directions to attach the properties of the businessman who has been declared a proclaimed offender for evading summons in a money laundering case related to FERA violations.