The high court in London has directed Vijay Mallya to pay £88,000 to Swiss bank UBS as part of interim legal costs in a case filed by the bank seeking possession of his Baker Street house. The bank alleges that Mallya was given £20.4 million mortgage on which he has defaulted. Mallya had bought the property in a Grade 1 listed building overlooking the landmark Regent’s Park in 2005. In March 2012, he borrowed £20.4 million from UBS for a period of five years. Mallya, however, claims that UBS called the loan early and that he, his mother and son were entitled to “occupation rights” in the property. The main trial is scheduled in May 2019 at the end of which the court will decide whether Mallya can hold on to his luxury pad in London.
Chief Master Mathew Marsh in the Business and Property Court passed the order during a one-hour hearing. The order came after the lawyer representing UBS made submissions for order relating to legal costs. The issue of cost arose after the court set aside several objections raised by Mallya as they were “bound to fail.” There were some indications of Mallya’s precarious financial condition after his lawyer suggested that the court should look in the range of 30,000-40,000 pounds as legal costs with the time limit of up to eight weeks for the payment. The judge, however, stated that “this was a complex application” and that the figure of 88,000 pounds was a “proper amount”.
UBS’s lawyer also brought to the notice of the court that the slow response from Mallya on the payment of previous legal costs “makes us nervous”. The court then instructed Mallya’s defence that the deadline of January 4, 2019 was not an “aspirational date” and that payment must be made in full. Chief Master Marsh termed the deadline as “an extended period which erred on the side of generosity”.
Mallya has been fighting the extradition battle with the Indian government on allegations that he defaulted on loans worth £900 million given to now defunct Kingfisher Airlines by Indian banks. The verdict is expected on December 10 at the Westminster Magistrate Court where Mallya has voiced vehement protests against the prison conditions at Arthur Road jail.
Mallya's plea dismissed
Meanwhile, the Bombay High Court has dismissed appeal filed by Mallya seeking stay on ED's request before trial court to initiate proceedings against him under the Fugitive Economic Act. The Enforcement Directorate wants Mallya to be declared as a fugitive economic offender and his properties to be confiscated under the act.
Mallya, his now defunct venture Kingfisher Airlines Ltd, and others availed loans from various banks and the outstanding amount, including interest, against him was around £999 million, the officials had said while filing the plea under the new law. Mallya is currently contesting his extradition case in London filed by the Indian government on behalf of the CBI and ED.
Mallya, in the past, had said that he had become the “poster boy” of bank default and a lightning rod for public anger. “I have been accused by politicians and the media alike of having stolen and run away with £900 millionthat was loaned to Kingfisher Airlines (KFA). Some of the lending banks have also labelled me a wilful defaulter.”
