In a big development, a London Court has ordered on Friday to debt-ridden controversial industrialist Anil Ambani to pay 717 Million Dollars (Rs.5400 crores) in 21 days for non-repayment of loans to Chinese Banks. Anil Ambani had taken around 18 Billion Dollars (Rs.1,35,000 crores) from Chinese Banks during the period 2007-2010 for purchasing Chinese equipment to use in his Telecom and Power sector companies in India.
In a video conference, Justice Nigel Teare ruled at the Commercial Division of the High Court of England and Wales in London that a personal guarantee disputed by Anil Ambani is binding on him.
“It is declared that the Guarantee is binding on the Defendant (Ambani),” Justice Teare’s order notes.
“It is declared that… the sum payable by the Defendant to the Claimant (banks) pursuant to the Guarantee is $716,917,681.51,” it reads.
Reacting to the Judgment, Anil Ambani’s spokesperson told media in an obtuse way that this was not a personal loan of Mr. Ambani. The ICBC (Industrial and Commercial Bank of China) made their claim based on an alleged guarantee that was never signed by Mr Ambani and he has consistently denied having authorised anyone to execute any guarantee on his behalf. The London Court’s Order is a huge embarrassment to Anil Ambani and if not paid, Chinese Banks will alert Interpol to arrest him whenever he goes out of India, say International Law experts.
“Chinese are not fools. If he not paying as per Court Orders, they will alert Interpol and get him arrested when he goes abroad. Chinese will alert their embassies and their friendly countries to pick him,” said International Law experts.
The banks – Industrial and Commercial Bank of China Ltd. Mumbai Branch, China Development Bank and Exim Bank of China – had taken their claim for summary judgment to the UK High Court and in February were granted a conditional order, in effect a deposit to be paid into court pending a full trial in the case. PGurus reported about the 18 Billion dollars taken by Anil Ambani’s companies in the Telecom and Power sector to buy Chinese equipment during the 2008-2010 period. Though the Intelligence Bureau (IB) objected to Anil Ambani’s firms from installing Chinese equipment in Telecom and Power sector, Ambani was able to overcome IB’s objections.
Earlier Judge David Waksman, presiding over that hearing on February 7, had set a six-week timeline for the payment of $100 million pending during the hearing in the case filed by Chinese Banks. The court order this week vacates a trial date previously set for March 18 next year and also issues a court costs order in favour of the banks, adding a further 750,000 pounds to the overall amount owed.
According to the court order, the nearly 717 million dollars to be paid by Anil Ambani comprises of the principal amount outstanding under the Facility Agreement of $549,804,650.16; interest outstanding as of May 22 of $51,923,451.49; and default interest due of $115,189,579.86.
“The final amount owed by the Defendant (Ambani) to the Claimant (banks) under the Guarantee shall be assessed subject to the outcome of the RCom Insolvency Action,” the court order states, leaving the option open to the banks to revisit the final amount in future.
The reference is to an ongoing State Bank of India (SBI) Insolvency Application in the National Company Law Tribunal (NCLT) in India related to Reliance Communications (RCom), which the Chinese banks’ legal team had argued had no bearing on the English Court’s ability to proceed to determine their clients’ claims. Ambani’s spokesperson said the amount ordered to be paid based on the “alleged guarantee”, will “reduce substantially” upon the imminent resolution of RCom’s debt in accordance with the Insolvency & Bankruptcy Code, 2016.
“The Order of the UK court will have no bearing on the operations of Reliance Infrastructure Limited, Reliance Power Limited and Reliance Capital Limited,” the spokesperson said.
The Industrial and Commercial Bank of China Ltd. Mumbai Branch, on behalf of the three Chinese banks, had sought the summary judgment against Ambani over an alleged breach of a personal guarantee on a debt refinancing loan of around $925 million in February 2012.
Anil Ambani’s arguments that he denies providing authority for any such guarantee were rejected by the British Court. At the last hearing in the case in February, Justice Waksman had ruled that he did not accept Ambani’s defence that his net worth was nearly zero or that his family would not step in to assist him when “push came to shove” to cover the conditional order amount of $100 million.
“Anil Ambani played tricks in Indian Courts in 2G scam-related cases. But this is London Court and petitioners are Chinese Banks. His monkey tricks won’t work anymore,” said International Law Experts.
- SSR case: Subramanian Swamy urges Prime Minister to give directions to Health Ministry to analyse the AIIMS report by the Ministry’s Medical Board - October 22, 2020
- Universities portraying Vaishnavism in negative light: The experience of a Hindu student at a Western University - October 20, 2020
- Kerala HC junks State Government’s pleas against leasing out Thiruvananthapuram airport to Adani Enterprises. Communist hypocrisy exposed - October 20, 2020