Court hears Mallya case
A CONSORTIUM of Indian banks led by the State Bank of India (SBI) was back for a high court hearing in London last Friday in pursuit of a bankruptcy order against businessman Vijay Mallya, as they attempt recovery of debt from loans paid out to his now-defunct Kingfisher Airlines.
At a virtual hearing before Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs, both sides presented closing arguments in the case being heard following an amendment to a bankruptcy petition filed last year.
The Indian banks argue a right to waive their security over the Indian assets involved in the case in order to recover their debt in the UK.
However, lawyers for the 65-year-old Mallya counter the funds in question involved public money held by state-owned banks in India which precludes them from such a security waiver.
They also point to ongoing interest rate legal challenges in India that impact upon the applicability of a UK bankruptcy order.
“We can’t second guess what’s going to happen in India,” said barrister Marcia Shekerdemian, arguing on behalf of the SBI and others.
Mallya’s barrister, Philip Marshall, referred to witness statements of retired Indian judges in previous hearings to reiterate that there is ‘public interest under Indian law’ by virtue of the banks being nationalised. “Any security cannot be unilaterally waived,” he said.
Judge Briggs said he would deliberate on the details and deliver a judgement, in the coming weeks.
The SBI-led consortium of 13 Indian banks, which also includes Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co.Pvt Ltd, initiated the proceedings against Mallya in December 2018.
There have been a series of hearings in the Mallya case since then as part of their efforts to recoup around £1.145 billion in unpaid loans.