IDBI Bank Secures $ 239 Million Debt Judgment in UK

IDBI Bank secured a $ 239 million judgment in the commercial division of the High Court in London against a Cypriot subsidiary of the Indian group Essar Shipping, one of the largest debt judgments obtained by an Indian bank in English courts.
IDH International Drilling Holdco (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 concluded loans totaling $ 148 million with two Singapore registered companies Varada Drilling One and Varada Drilling Two for the construction of two jack-up drilling platforms 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, General Counsel of TLT LLP, the London law firm representing 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, 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 or before 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.

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