IDBI Bank Limited v Axcel Sunshine Limited & Anor
| Judge | LIONEL PERSEY KC |
| Neutral Citation | [2025] EWHC 442 (Comm) |
| Date | 27 February 2025 |
| Year | 2025 |
| Court | Queen's Bench Division (Commercial Court) |
| Counsel | Nigel Tozzi Kc,Adam Temple |
Neutral Citation Number: [2025] EWHC 442 (Comm)
Case No: CL-2018-000506
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Date: 27 th
February 2025
Before :
LIONEL PERSEY KC
SITTTING AS A JUDGE OF THE HIGH COURT
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Between :
IDBI BANK LIMITED Claimant
- and -
(1) AXCEL SUNSHINE LIMITED
(1) (2) SIVA INDUSTRIES AND HOLDINGS
LIMITED
Defendants
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Nigel Tozzi KC and Adam Temple (instructed by TLT LLP) for the Claimant
The Second Defendant was not represented at trial and did not appear
Hearing dates: 12 November 2024
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Approved Judgment
This judgment was handed down remotely at 10.30am on 27th February 2025 by circulation to
the parties or their representatives by e-mail and by release to the National Archives.
.............................
Mr Lionel Persey KC :
Introduction
1. The Claimant, IDBI Bank Limited (“the Bank”), is an Indian bank which, at the
relevant times, operated outside India via a branch in the Dubai International Financial
Centre (“the DIFC”).
2. The First Defendant, Axcel Sunshine Limited (“Axcel”), is a company incorporated and
registered in the British Virgin Islands. It borrowed money (initially USD 67 million)
from the Bank’s DIFC branch under a Credit Facilities Agreement dated 26 March
2014 (“CFA”).
3. The Second Defendant, Siva Industries And Holdings Limited (“Siva”), is a company
incorporated and registered in India. It provided a “Letter of Comfort” dated 26 March
2014 (“LoC”) addressed to the Bank’s DIFC branch, which the Bank relies upon as a
legally binding contract of guarantee and/or indemnity.
4. The USD 67 million borrowed by Axcel was transferred to Siva, which used the funds
to discharge previous liabilities owed by Siva group companies to the Bank, which Siva
had guaranteed. Axcel has defaulted on and failed to repay the CFA. The outstanding
liability under the CFA now stands at c. USD 143.7 million (the “Outstanding Sum”).
The Bank seeks to recover the Outstanding Sum from Siva as surety.
5. Siva resists the Bank’s case on, predominantly, two bases:
(1) First, it says (1) that the Bank had represented that the LoC was only a paper
exercise and would never be used by or relied upon by the Bank; and (2) that the
Bank wanted the LoC as ‘an optic’ only and as a procedural requirement to ‘save
face’ within the Bank and to ensure that a Non Performing Asset (i.e. a loan it had
previously given to a company called WinWind OY, a subsidiary of Siva) was
disposed of.
(2) Secondly, it says that the Court should not enforce the LoC as its performance
would contravene Indian law. Siva relies upon the Foreign Exchange
Management (Guarantees) Regulations 2000 (the “FEMA Regulations”), Reg 3
which state:
“… Prohibition.
6. The Bank contends Siva’s defence is wrong both on the facts and the law. It says that
even if Siva were able to make good these arguments (which it cannot), it nevertheless
remains liable under one or more of the Bank’s secondary cases, for breach of
warranty, misrepresentation and unjust enrichment.
7. By an email dated 28 October 2024, Siva’s former solicitors, Aliant Law, served a
Notice of Change indicating that Siva would be representing itself. On 30 October
2024, Siva indicated that it would not be attending the trial and that its expert would not
be giving evidence.
8. The Bank seeks a judgment on the merits rather than an order under CPR 39.3.
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