Industrial and Commercial Bank of China Ltd, Mumbai Branch v Anil Dhirajlal Ambani

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeMr. Justice Waksman
Judgment Date07 Feb 2020
Neutral Citation[2020] EWHC 272 (Comm)
Docket NumberClaim No: CL-2019-000139

[2020] EWHC 272 (Comm)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS

OF ENGLAND AND WALES

COMMERCIAL COURT (QBD)

The Rolls Building

7 Rolls Buildings

Fetter lane

London EC4A 1NL

Before:

Mr. Justice Waksman

Claim No: CL-2019-000139

Between:
Industrial and Commercial Bank of China Limited, Mumbai Branch
Claimant
and
Anil Dhirajlal Ambani
Defendant

Mr. Bankim Thanki QC and Ms. Laura Newton (instructed by White & Case LLP) for the Claimant.

Mr. Robert Howe QC, Mr. Harish Salve SA and Mr. Peter Head (instructed by Mishcon de Reya LLP) for the Defendant.

Approved Judgment

Mr. Justice Waksman

Introduction

1

On 16th December 2019, I gave judgment on the application by the Claimant bank, Industrial and Commercial Bank of China Limited, Mumbai Branch (“the Bank”), for summary judgment against the Defendant, Mr. Anil Ambani (“Mr. Ambani”), or alternatively a conditional order requiring him to pay all or some of the monies claimed into Court. The Bank's claim is upon a written guarantee, executed by a Mr. Shukla, who possessed, according to the Claimant, a valid and binding power of attorney on behalf of Mr. Ambani.

2

The guarantee was in respect of loan facilities to a company called Reliance Communications Limited (“RCom”) in a very large amount. The company was incorporated in India, and forms part of a very substantial group of companies, which, ultimately, is entirely owned by Mr. Ambani or members of his family. It is common ground that at least until relatively recently, Mr. Ambani was one of the wealthiest individuals in India. His defence to the Bank's claim on the guarantee, in essence, is that while he signed the power of attorney, it was, at the time, incomplete and invalid, in particular because it did not attach a draft of the guarantee to which it referred, as it had purported to do, and that Mr. Ambani had no intention of providing such a guarantee through an attorney. Instead he thought he was authorising the attorney to sign a non-binding letter of comfort.

3

Mr. Ambani avoided summary judgment, but only just. It is not necessary for me to do anything other than summarise the view I expressed of his case in paragraph 89. I said that I considered that his evidence was inexplicably incomplete, implausible and highly unlikely. It was a case where I was very nearly prepared to give judgment. I thought it highly probable that at trial, his defence would be shown to be opportunistic and false, and on that basis, the application for a conditional order was engaged. Paragraph 4 of PD 24 provides that “Where it appears to the Court possible that a claim or a defence may succeed but improbable that it may do so, the Court may make a conditional order”, and paragraph 5.2 provides that such an order includes one which required the party to pay a sum of money into Court, and in the event of non-compliance, the party's claim or defence would be struck out. I found, in paragraph 89 of my judgment, that this was, as a matter of principle, a clear case for such an order.

4

Having decided that, I then directed the exchange of evidence on the question as to what sum, if any, should be paid into Court. It is common ground that insofar as Mr. Ambani seeks to contend, as he has done here, that he is unable to pay the sum claimed, or indeed any sum into Court, or to raise such a sum, so that any conditional order to that effect would stifle his defence, he bears the burden of proof to satisfy me, on the balance of probabilities, that this would be the case. This is now my decision on that issue.

5

I directed evidence to be served as follows: Mr. Ambani was to serve his evidence as to his ability to pay or raise funds by 17th January 2020, with any evidence in reply from the Claimant by 31st January. On 17th January Mr. Ambani's second witness statement was served, and then on 28th January, without any notice, another witness statement emerged from Mr. Kumar, his Indian lawyer. Although out of time, the Claimant agreed not to take any point on that. On 31st January the Bank served its evidence in reply, a lengthy fourth witness statement from Mr. Balmain, and there the matter should have rested. However, in the afternoon of 5th February, just two days before today's hearing, Mr. Ambani served a further, third witness statement, seeking to respond to Mr. Balmain's fourth. There was no provision for this, and that is so, regardless of what might now be thought to have been an appropriate further provision, giving permission for Mr Ambani to put in evidence in reply.

6

In the event, however, while the Bank's primary formal position was to object to that evidence going in at all, it recognised the reality that in a case of this kind, the Court would probably wish to be apprised as fully as it could be of all the relevant matters. Had the Claimants asked for an adjournment to enable it to put in further evidence in reply, I would have been sympathetic; in fact it decided that it did not wish to have an adjournment and would simply press on with the matter today, having made some, though not complete, submissions in writing on the third witness statement in the time they had before its skeleton argument was served. Accordingly, I gave permission for Mr Ambani's third statement to be adduced.

Background

7

Let me say something about the background. This case has some unusual features. The first, obviously, is the size of the sums involved. The second is the financial position and standing of Mr. Ambani. On any view, a few years ago he was a billionaire. His personal and corporate interests ranged far and wide, both in India and abroad, including here in the UK. His mother and his two sons and to some extent his wife are, themselves, involved in or associated with, those businesses, one way or another. His brother, Mr. Mukesh Ambani, is presently reputed to be the richest man in Asia, and he has assisted Mr. Ambani in the past. For example, when Mr. Ambani, as a director of RCom, was facing imprisonment for three months for contempt of Court on the part of his company, for which he would be liable as a director, Mr. Mukesh Ambani, through one of his companies, bailed out RCom and thereby enabled Mr. Ambani to escape prison for contempt by paying out the sum of around $76 million. I shall explore that matter in a more detail below.

8

Mr. Ambani has, and continues to have, a very lavish lifestyle. He had at one time the use of a helicopter, but more recently has had the use of a Bombardier Legacy 650 private jet, the use of around 11 cars worth about $3 million, the use of a yacht and the occupation of two floors of a very large and extremely prestigious building in South Mumbai. He has also the present financial wherewithal to have instructed and continue to instruct, leading and junior counsel in relation to these applications and this case. Notwithstanding that, Mr. Ambani's core point now is that while it is true that some years ago he had assets worth billions of dollars, all of that has disappeared with the financial crisis which affected the Indian telecoms industry in which he was centrally involved, such that, in effect, he is now broke. He says he cannot obtain financial assistance from anyone else, in particular members of his family; accordingly, the Court should not make any conditional order against him. Indeed, on the figures he presents, it is said he is massively insolvent and actually bankrupt, although he has not applied for any bankruptcy order in India. I was told through Mr. Howe QC, on instructions, that this may be because there are some technical matters which would arise. There appear to be differences between Indian federal and local law, but either way he has not applied for any form of bankruptcy order in India.

The Law

9

I now turn to the law. A very helpful and recent exposition of the principles applicable to how the Court should approach the making of a conditional order for payment into Court is set out by Males LJ, giving the lead judgment in Gama Aviation (UK) Limited v Taleveras Petroleum Trading DMCC [2019] EWCA Civ 119. At paragraph 42, the learned judge states that in relation to those paragraphs of PD 24, to which I have referred:

“It is not necessary to show that a defence is ‘shadowy’ or ‘dubious in its bona fides’ … although if a defence is shadowy or of doubtful good faith that will no doubt be a relevant consideration in exercising the power to make a conditional order and deciding the amount of any security which should be ordered.”

10

He then says in paragraph 43:

“… there is a category of case where the Defendant may have a real prospect of success, but where success is nevertheless improbable and a conditional order for the provision of security may be made. This is the typical case where a conditional order may be made requiring the provision of security for the full sum claimed or something approaching it.”

11

He then said at paragraph 45 that the following principles were established:

“… where the Defendant has a real prospect of successfully defending the claim, the Court must not impose a condition requiring payment into Court or the provision of security with which it is likely to be impossible for the Defendant to comply.”

12

He went on to refer to the well-known dicta of Lord Diplock in MV Yorke Motors v Edwards [1982] 1 WLR 444:

“‘that would be a wrongful exercise of discretion, because it would be tantamount to giving judgment for the plaintiff notwithstanding the Court's opinion that there was an issue or question in dispute which ought to be tried’”.

13

That case is also referred to in Goldtrail Travel Ltd (in...

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  • Maria Alessandra Foglia v The Family Officer Ltd
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 22 March 2021
    ...it colloquially, that “ the Defendant should put his money where his mouth is”: Industrial and Commercial Bank of China Ltd v Ambani [2020] EWHC 272 (Comm) at 128 In Gama Aviation (UK) v Taleveras Petroleum Trading DMCC [2019] EWCA Civ 119, the Court of Appeal held that whilst it is not n......

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