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London: Six Indian banks pursuing unpaid loans amounting to an estimated $2 billion, including interest accrued, from GVK Coal Developers (Singapore) Pte Ltd and associated companies have won their legal challenge in the London High Court.
Judge Dame Clare Moulder presided over the trial last month at the Commercial Court division to hear the case brought by the Bank of Baroda and others and in an approved judgment dated October 19 concluded the banks “made out their case to the requisite standard”.
The banks were represented by international law firm Reed Smith, who instructed barrister Karishma Vora of 39 Essex Chambers London to argue the matter.
“We are delighted to have secured such a resounding and landmark victory for our Indian banking clients in a matter of such commercial significance,” said Vora and Reed Smith’s Gautam Bhattacharyya in a joint statement.
“It is an honour to be representing a syndicate of Indian banks that are synonymous with credibility and faith for the people of India and doing our part in getting them justice in India and internationally,” they said.
Besides Bank of Baroda (acting by its Ras Al Khaimah branch), the other claimants in the case included Canara Bank (London branch), ICICI Bank Ltd (acting by its Bahrain, Dubai and Off-Shore Banking branches), Indian Overseas Bank (Corporate Branch, India) and Axis Bank Ltd.
The court heard that the case dates back to 2011 and 2014 when loan facilities were made available to GVK Coal Developers, which the banks argued were long overdue.
The judgment also takes note of the fact that the company was not represented in court after its adjournment application was turned down and permission for an Indian lawyer to address the court was refused.
“Although this court was not obliged to take into account the evidence of the defendants (GVK), it has done so both in relation to the expert evidence on Indian law and the accounting evidence,” the judgment reads.
According to court documents, the banks have been pursuing the case at the High Court in London since 2020. GVK’s legal representatives had successfully applied for an adjournment in June last year to prepare Indian law expert reports for the trial. The case then proceeded for the trial last month.
“It appears to be common ground that the amounts were lent under the Facility Agreements and not repaid on the scheduled due dates,” reads the judgment.
“I accept the evidence of Mr Justice Gupte as to the principles of Indian law set out in his report pertaining to force majeure. I accept that the Government of India has not declared force majeure generally in a way which that could apply in relation to these contracts,” the judge notes.
The other GVK group companies named as defendants in the case include Black Gold Ventures Pte Ltd, Cool Water Ventures Pte Ltd, Harmony Waters Pte Ltd, GVK Natural Resources Pvt Ltd, GVK Power and Infrastructure Ltd, GVK Resources (Singapore) Pte Ltd, GVK Coal Resources (Singapore) Pte Ltd, GVK Coal Infrastructure (Singapore) Pte Ltd and GVK Coal Exploration and Production Pte Ltd – mostly Singapore companies with a couple from Telangana.
The purpose of the 2011 and 2014 loan Facility Agreements was to provide part of the funding for the acquisition and the development of assets into working coal mines, with supporting rail and port infrastructure. The GVK Group has been approached for a comment.