A consortium of Indian banks led by the State Bank of India (SBI) are pursuing a bankruptcy order against liquor tycoon Vijay Mallya in the High Court in England, seeking to prove that any settlement offer is now invalid.
In a hearing in the insolvency division of the High Court in London, Justice Michael Briggs heard arguments from the banks, represented by barrister Marcia Shekerdemian, that pursuing the bankruptcy order was required as the banks were not secured creditors, as claimed by Mallya.
It follows Justice Briggs' ruling back in April in the case when he had concluded that Mallya should be given time until petitions pending in India can be determined before a decision is made on a bankruptcy order in London.
The banks' legal team argued that the assets of United Breweries Holdings Limited (UBHL), being relied on by Mallya as part of a second settlement offer, are unquestionably under the control of its Official Liquidator and therefore not available to Mallya or the erstwhile management of UBHL.
"This means that the Second Settlement Offer is effectively dead in the water as neither Mallya nor his associates nor the erstwhile management have any control over UBHL's assets, which form part of that offer," they argued.
Mallya's legal team, led by barrister Philip Marshall, countered that the banks were secured creditors and that the petition should be dismissed.
A reference was also made to the parallel extradition proceedings against Mallya, with the banks highlighting that the 64-year-old had been refused permission to appeal to the High Court on the grounds that he would not receive a fair trial in India because of his political beliefs.
According to the UK Home Office, Mallya's extradition to India on charges of fraud and money laundering was ordered in February 2019 but it cannot comment on an ongoing legal case.
With all avenues of legal recourse exhausted in the UK after his permission to appeal in the UK Supreme Court was denied in May, the next steps in the extradition process remain uncertain as the UK government does not formally confirm or deny any applications made before it for asylum.