UK court allows Indian banks to collect claims worth $1.55 billion from tycoon Vijay Mallya

India’s banks can breathe a sigh of relief. On May 8th, a UK court upheld a decision by the Karnataka Debt Recovery Tribunal regarding Kingfisher tycoon Vijay Mallya’s outstanding dues and maintained a worldwide freeze on his assets. The freeze will prevent Mallya from selling any assets in the England and Wales. Mallya is wanted in India for suspected fraud and money laundering.

As a result, a consortium of 13 Indian banks - which includes the state-owned State Bank of India, IDBI Bank and Punjab National Bank - who extended loans to Mallya’s now-defunct Kingfisher Airlines will be able to to collect $1.55 billion worth of claims against his assets in the UK.

The prosecution, which was representing the banks, successfully argued that Mallya “willfully defaulted” on the loans in spite of his considerable financial resources.

The case reportedly marked the first time a ruling by an Indian tribunal had been registered in a UK court. Most importantly, it sets a precedent wherein a worldwide freeze can be imposed on a wilful defaulter’s assets. The ruling will also give the Indian government’s extradition proceedings against Mallya, which are expected to conclude in July 2018, a much-needed boost.

To add insult the injury, the UK court has also barred Mallya’s legal team from appealing the ruling. If they wish to seek recourse, they will have no option but to directly petition the UK’s Court of Appeals.

Mallya was arrested in April 2017 on an extradition warrant over charges of defrauding his Indian creditors of $1.4 billion in loans. Currently out on bail, he has been absconding in England since March 2016 and refuses to come back to India over fears of an unfair trial. He has several cases pending against him in India over money laundering, tax evasion and credit defaults.