The high court in London has ordered Vijay Mallya and his son Siddharth to pay $135-million to world’s largest producer of spirits Diageo. Diageo had sued the duo as well as two companies associated with their family, Watson Limited and Continental Administration Services Limited (CASL), in the high court in London. Its claim was to claw back a $40 million payout Diageo had made to Mallya in 2016, as part of the $75 million settlement for his departure from United Spirits (USL), as well as a $135-million loan Diageo had refinanced for Mallya’s company Watson.
Renowned for brands like Johnnie Walker, Diageo had agreed to pay $40 million to Mallya in cash and $7 million every year for five years thereafter when he was removed as chairman from USL on 25 February 2016. Diageo holds a 54% stake in USL. Diageo claiming breach of contract, has not paid $7 million since 2017 and now is claiming to get the $40 million back.
Mallya has a counter-claim against Diageo for $21 million for the unpaid amount of $75-million settlement. The commercial court heard that when Diageo in November 2012 was in the process of acquiring shares in USL, it agreed to become a backstop guarantor of the $135-million loan that Watson then owed ICICI Bank.
