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UK court dismisses $680 million Chinese banks' summary judgement plea against Anil Ambani, but calls his defence 'incomplete'

The UK High Court stated Anil Ambani's defence is inexplicably incomplete, implausible and highly unlikely and will be shown to be opportunistic and false at trial

twitter-logoBusinessToday.In | December 16, 2019 | Updated 20:49 IST
UK court dismisses $680 million Chinese banks' summary judgement plea against Anil Ambani, but calls his defence 'incomplete'

The UK High Court has dismissed an application for summary judgment by Chinese banks for a $680 million claim against Anil Ambani. The court, however, has passed a conditional order on the basis that Ambani's defence against the claim, "while possible, is improbable". Now, the Business and Property Courts of England and Wales has asked Ambani's legal team to submit further evidence in his defence and prove that the claim by Chinese lenders holds no merit.

"For all the reasons given above, I consider that Ambani's evidence is inexplicably incomplete, implausible and highly unlikely... I think it is highly probable that at trial his defence will be shown to be opportunistic and false," read a UK High Court order dated November 7, 2019.

The application for summary judgment itself, however, is dismissed, the order further added.

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In a statement following the order, the banks said: "We welcome the grant of a conditional order against Anil Ambani as we have always said his defence is not credible. This is a straightforward debt claim to recover outstanding loans made to RCom in good faith and secured by a binding personal guarantee given by Mr. Ambani. We now look forward to the swift resolution of the case at trial."

Ambani's legal team has exuded confidence that his position would be fully vindicated once all the facts and the entire evidence is presented before the court.

Industrial and Commercial Bank of China, China Development Bank and Export-Import Bank of China had extended loans to the tune of $925.3 million to Ambani's Reliance Communication in February 2012. Industrial and Commerical Bank of China (ICBC) is the sole claimant in the case before UK High Court and is representing the other two lenders.

"In addition, on February 22, 2012, a guarantee of RCom's liabilities under the loan was executed by a Hasit Shukla, Commercial and Treasury Head at RCom, in favour of the Bank and purportedly on behalf of Ambani pursuant to a Power of Attorney (POA) signed by both Ambani and Shukla," the order read.

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RCom repaid a portion of the loan, but defaulted on its payment obligations in February 2017. The order stated that Ambani did not respond to various demands for payment raised by ICBC between February and November 2017. By a notice dated June 21, 2018, the Chinese lender accelerated the sums due under the loan to RCom. At the same time, it made a further demand upon Mr Ambani to which, again, he did not respond, the order said.

Meanwhile, Ambani has maintained that he had no knowledge of any guarantee to be signed on his behalf by anyone and was unaware of it until he received the letters from the bank in 2017.

On May 2019, ICBC issued an application for summary judgment on the guarantee, "alternatively for a conditional order requiring Ambani to pay into court all or some of the sum claimed on the basis that on any view his defence is improbable".

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