Barclays Bank Plc v Bavaguthu Raghuram Shetty

Hearing date: 17 December 2021

Draft judgment circulated: 23 December 2021

APPROVED JUDGMENT

(A) INTRODUCTION

The Claimant (“ Barclays”) brings these proceedings in order to enforce at common law a judgment dated 22 April 2021, and an associated judgment on quantum dated 4 May 2021, against the Defendant (“ Dr Shetty”) made by Justice Wayne Martin in the Court of First Instance of the Dubai International Financial Centre Courts (“ the DIFC Court”) in the matter of Barclays Bank PLC v Bavaguthu Raghuram Shetty (Claim number CFI-061-2020). I refer to Justice Martin's two judgments (including the Schedule of Reasons forming part of the 22 April 2021 judgment) together as the “ DIFC Judgment”. They amount to a monetary judgment against Dr Shetty for US$131,440,346.22, plus costs and interest at 9% per annum until satisfaction of the judgment debt.

This present judgment follows the hearing on 17 December 2021 of (i) an application by Barclays, made by notice dated 27 August 2021, for summary judgment on its claim for enforcement of the DIFC Judgment (“ the Summary Judgment Application”), and (ii) an application dated 9 December 2021 by Dr Shetty to adjourn the hearing of the Summary Judgment Application (“ the Adjournment Application”).

The Summary Judgment Application had been listed for 17 December 2021 since 30 September 2021. On 17 December 2021, I first heard the Adjournment Application. Having decided to dismiss that application, I informed the parties of my decision. I indicated that I would provide my reasons in a reserved judgment, and that I would proceed to hear the Summary Judgment Application. That was, as I indicated, because any other course of action would have prevented me from hearing the Summary Judgment Application on 17 December 2021, in effect resulting in an adjournment being obtained despite my decision not to grant one.

For the reasons set out below, I have decided to grant the Summary Judgment Application. I also set out below my reasons for having dismissed the Adjournment Application.

(B) FACTUAL BACKGROUND

(1) The Parties

Barclays is a bank incorporated and headquartered in England. It has an unincorporated branch in the DIFC, which is a special economic zone in Dubai in the United Arab Emirates.

Dr Shetty is a semi-retired businessman ordinarily resident in the UAE but currently resident in India. He is the chairman and founder of UAE Exchange Centre LLC (“ UAEEC”), a company incorporated in Abu Dhabi. UAEEC is a foreign exchange business which provides global remittance, foreign exchange (“ FX”) and payment services. Finablr Plc (“ Finablr”), a financial services company founded by Dr Shetty, owns 40% of UAEEC, and Dr Shetty and his son own approximately 65% of Finablr. Dr Shetty is also the founder of NMC Health Plc, a company formerly listed on the London Stock Exchange, which went into administration on 9 April 2021 following the discovery of fraudulent activities and significant undisclosed borrowings at the company.

(2) UAEEC's foreign exchange transactions with Barclays

On 3 August 2012, Barclays and UAEEC entered into an agreement based on the International Swaps and Derivatives Association (“ ISDA”) 2002 Master Agreement to govern transactions between them. This agreement comprised the Master Agreement, the Schedule thereto and the Credit Support Annex thereto (collectively “ the Master Agreement”).

Pursuant to the Master Agreement, Barclays and UAEEC entered into a range of FX transactions including spot, forward and swap transactions. Each FX trade involved a pair of transactions in which one party was required to deliver one currency and the counterparty was required to deliver another currency on the value date.

In a series of FX transactions in various currencies with transaction dates between 6 March and 13 March 2020, Barclays paid out sums with a value equivalent to US$129,019,386.28. UAEEC was obliged to pay amounts of other currencies to Barclays but failed to do so. On 24 March 2020, Barclays sent UAEEC a Notice of Early Termination pursuant to section 6(a) of the Master Agreement. On 1 April 2020, Barclays sent UAEEC a Statement of Payment on Early Termination pursuant to clause 6(d)(i) of the Master Agreement, which identified the Early Termination Amount to be paid as US$129,543,839.27 (excluding interest) (“ the Early Termination Amount”). UAEEC failed to pay the Early Termination Amount or any interest on it.

(3) The Guarantee

On 7 January 2015, Dr Shetty had executed as a deed an Unlimited Guarantee and Indemnity in favour of Barclays (“ the Guarantee”). By Clause 1.1(i), Dr Shetty irrevocably and unconditionally:

“guarantees to Barclays the punctual performance by [UAEEC] of each and every obligation and liability [UAEEC] may now or hereafter have to Barclays in whatever currency denominated (whether due, owing, deliverable, or incurred from time to time, whether present or future, actual or contingent, solely or jointly with one or more persons, several or otherwise, in connection with the Banking Facilities (“the Liabilities”).”

“ Banking Facilities” were defined to mean:

“…such facilities or other accommodation as Barclays may make or continue to make available to [UAEEC], including, without limitation, any derivative, risk management or hedging products, facilities or transactions entered into or to be entered into with [UAEEC].”

By Clauses 1.1(ii) and (iii), Dr Shetty gave the following indemnities:

“(ii) [the Guarantor] undertakes to Barclays that whenever the Customer does not pay any amount when due under or in connection with the Banking Facilities, the Guarantor shall immediately on demand pay that amount as if it was the primary obligor; and

(iii) agrees with Barclays that if any obligation guaranteed by it is, or becomes, unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify Barclays immediately on demand against any cost, loss or liability it incurs as a result of the Customer not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it in connection with the Banking Facilities on the date when it would have been due. …”

By clause 2, Dr Shetty provided the following “ Further indemnity”:

“As a further separate and independent obligation, the Guarantor will indemnify Barclays in full and on demand against all losses, costs and expenses suffered or incurred by Barclays arising from or in connection with: (a) the failure by the Customer fully and promptly to perform [UAE Exchange's] obligations in connection with the Banking facilities, (b) the enforcement of the Customer's obligations, (c), the failure of the Guarantor promptly to perform [his] obligations under this Guarantee, and (d) the enforcement of this Guarantee.”

Clause 3.2 of the Guarantee provided as follows:

“Neither the obligations of the Guarantor in this Guarantee nor the rights, powers and remedies conferred in respect of the Guarantor upon Barclays by this Guarantee or by law shall be discharged, impaired or otherwise affected by:

…

(ii) any of the Liabilities or any of the obligations of the Customer or any other person under any security relating to the Liabilities being or becoming illegal, invalid, unenforceable or ineffective in any respect;

(iii) any time or other indulgence being granted or agreed to be granted by Barclays to, or any composition or other arrangement made with or accepted from:

(a) The Customer in respect of the Liabilities or any of them, or

(b) any person in respect of any such other security, rights or claims in respect of any of the Liabilities;

(iv) any amendment to, or any variation, waiver or release of, any of the terms of any of the Liabilities or any other security, rights or claims, however material;

…

(vii) any other act, event or omission which, but for this Clause 3.2, would or might operate to discharge, impair or otherwise affect any of the obligations of the Guarantor in this Guarantee or any of the rights, powers or remedies conferred upon Barclays by this Guarantee or by law.”

Clause 6 provided inter alia that:

“All payments to be made by the Guarantor to Barclays under this Guarantee shall be made without set-off or counterclaim and without...