London: In a major blow to Mumbai-based industrialist Anil Ambani, a London court has ordered the Reliance Group chairman to pay $717 million to three Chinese banks ruling that personal guarantee disputed by the businessman is binding on him.
Ambani has been given 21 days to pay the amount to Industrial and Commercial Bank of China Ltd, China Development Bank and Exim Bank of China.
In his order, Justice Nigel Teare ruled at the Commercial Division of the High Court of England and Wales in London: “It is declared that the sum payable by the Defendant to the Claimant (banks) pursuant to the Guarantee is $716,917,681.51.”
A spokesperson for Ambani said the matter pertains to an alleged personal guarantee for a corporate loan availed by Reliance Communications Limited (RCom) in 2012 for global refinancing.
The spokesperson said in a statement that as far as the judgment of the UK court was concerned, “the question of any enforcement in India does not arise in the near future”.
The banks had taken their claim for a summary judgment to the 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 the case.
The banks had sued Ambani in London for allegedly failing to repay $708 million of loans, including interests. Reliance Communications had taken the loans. According to the banks, Ambani was a personal guarantor to the loans.
The court order said that the nearly $717 million to be paid comprises the principal amount outstanding under the Facility Agreement of $549,804,650.16; interest outstanding as of May 22 of $51,923,451.49; and default interest due of $115,189,579.86.
Referring to an ongoing State Bank of India Insolvency Application in the National Company Law Tribunal in India related to RCom, the order stated that the final amount owed by the Ambani to the banks under the guarantee shall be assessed subject to the outcome of the insolvency action.
The court order vacates a trial date previously set for March 18 next year and also issues a court costs order in favour of the banks, adding a further 750,000 pounds to the overall amount owed.
