Singapore's GVK Faces Setback as UK High Court Backs Indian Banks

03 Nov, 2023

Singapore's GVK Faces Setback as UK High Court Backs Indian Banks

In a significant legal victory, six Indian banks have successfully won their case in the London High Court against GVK Coal Developers (Singapore) Pte Ltd and its associated companies over unpaid loans totaling approximately $2 billion, including accrued interest.

The trial, presided over by Judge Dame Clare Moulder in the Commercial Court division, concluded in favor of the banks. The case was brought forward by the Bank of Baroda and other claimants, and the judgment, issued on October 19, affirmed that the banks had substantiated their case.

International law firm Reed Smith represented the banks in this legal challenge, with barrister Karishma Vora from 39 Essex Chambers London arguing the case. Both Vora and Gautam Bhattacharyya from Reed Smith expressed their satisfaction with the landmark victory and the significant commercial implications it holds for their Indian banking clients.

The legal victory holds particular importance as it represents a collective effort to uphold justice in both Indian and international domains. The syndicate of Indian banks involved in this case includes Bank of Baroda (acting by its Ras Al Khaimah branch), 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 case dates back to 2011 and 2014 when loan facilities were extended to GVK Coal Developers, which the banks argued were considerably overdue. The judgment highlights the fact that the company failed to be represented in court after its adjournment request was rejected, and permission for an Indian lawyer to address the court was denied.

Court records reveal that the banks have been pursuing this case at the High Court in London since 2020. GVK's legal representatives had secured an adjournment in June the previous year to prepare Indian law expert reports for the trial, which subsequently took place last month.

The other companies from the GVK group named as defendants in this 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, primarily comprising Singapore-based entities with a few from Telangana.

The 2011 and 2014 loan Facility Agreements were designed to fund the acquisition and development of assets for operational coal mines, including the necessary rail and port infrastructure.