UK court orders Anil Ambani to pay USD 717mn to Chinese banks

A UK court on Friday directed Reliance Group chairman Anil Ambani to pay nearly USD 717 million to three Chinese banks pursuing recovery of funds owed to m as part of a loan agreement within 21 days.

At a remotely held hearing, in line with procedures in place for COVID-19 pandemic, Justice Nigel Teare ruled at Commercial Division of High Court of England and Wales in London that a personal guarantee disputed by Ambani is binding on him.

“It is declared that Guarantee is binding on Defendant (Ambani),” Justice Teare’s order tes.

“It is declared that… sum payable by Defendant to Claimant (banks) pursuant to Guarantee is USD 716,917,681.51,” it res.

A statement related to judgment has been sought from Reliance Group.

banks – Industrial and Commercial Bank of China Ltd Mumbai Branch, China Development Bank and Exim Bank of China – h taken ir claim for a summary judgment to 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 case.

Judge David Waksman, presiding over that hearing on February 7, h set a six-week timeline for payment of USD 100 million pending a full trial in 2021.

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 banks, ding a furr 750,000 pounds to overall amount owed.

According to court order, nearly USD 717 million to be paid by Ambani comprises of principal amount outstanding under Facility Agreement of USD 549,804,650.16; interest outstanding as of May 22 of USD 51,923,451.49; and default interest due of USD 115,189,579.86.

“ final amount owed by Defendant [Ambani] to Claimant [banks] under Guarantee shall be assessed subject to outcome of RCom Insolvency Action,” court order states, leaving option open to banks to revisit final amount in future.

reference is to an ongoing State Bank of India (SBI) Insolvency Application in National Company Law Tribunal (NCLT) in India related to Reliance Communications (RCom), which Chinese banks’ legal team h argued h bearing on English Court’s ability to proceed to determine ir clients’ claims.

Industrial and Commercial Bank of China Ltd Mumbai Branch, on behalf of three Chinese banks, h sought summary judgment against Ambani over an alleged breach of a personal guarantee on a debt refinancing loan of around USD 925 million in February 2012.

Ambani denies providing authority for any such guarantee, resulting in High Court action in UK – jurisdiction agreed upon as part of terms of loan agreement.

At last hearing in case in February, Justice Waksman h ruled that he did t accept Ambani’s defence that his net worth was nearly zero or that his family would t step in to assist him when “push came to shove” to cover conditional order amount of USD 100 million.

Reliance Group at time h said industrialist plans to appeal against ruling.

“ order pertains to an alleged personal liability of Mr Ambani and will have bearing on operations of Reliance Infrastructure Limited, Reliance Power Limited and Reliance Capital Limited,” a spokesperson for Anil Ambani h said at end of February hearing.