In March 2013, the Mumbai-based IDBI agreed to lend USD 148 million to two Singapore-based companies, Varada Drilling One Pte Ltd and Varada Drilling Two Pte Ltd, for the building of two jack-up drilling rigs.
The borrowers’ Cypriot-registered parent firm, IDH International Drilling Holdco Ltd (IDH), provided a corporate guarantee for the loan. The loan and guarantee were controlled by English law and hence subject to the English courts’ jurisdiction.
IDBI served a formal demand for repayment of the principle amount, contractual interest, default interest, and fees after the borrowers failed to make scheduled installments.
What Happened After the Non-Payment?
The borrowers went into bankruptcy in Singapore after more non-payment, and TLT began proceedings in the UK on behalf of IDBI in January 2020. Following that, IDBI, IDH, and Essar Capital Holdings Limited, another Essar Shipping Group firm, entered into a one-time settlement agreement under which IDBI promised to accept a partial payment in full and final settlement of the debt if it was made by February 28 this year.
No such payment was made, and on March 1, IDBI filed a motion for summary judgment, claiming that IDH had no realistic chance of defending the claim at trial.
On May 21, deputy high court judge Leigh-Ann Mulcahy QC heard the matter in the Commercial Court.
In the commercial division of the High Court of London, IDBI Bank achieved a USD 239 million judgment against a Cypriot subsidiary of India-based Essar Shipping Group. This result has been considered to be one of the highest debt judgments acquired by an Indian bank in the English courts.