Mallya fails to delay $40mn Diageo claim, legal costs mount in UK

London: Even as he renewed an appeal against his extradition to India, embattled liquor tycoon Vijay Mallya suffered another legal setback on Friday in a separate $40-million claims case brought by British liquor giant Diageo plc in the UK High Court.

Justice Clare Moulder ruled against the 63-year-old former Kingfisher Airlines boss’ application to seek a delay in the full hearing in the case scheduled for May 23 and additionally ordered him to pay legal costs of 34,000 pounds.

 

She was extremely critical of the “unexplained” delays by Mallya in clearing the unpaid invoices of his previous solicitors Greenwoods, which resulted in his new solicitors Joseph Hage Aaronson (JHA) finding themselves in “difficulty” and wanting to seek an unfair adjournment.

“The delay is at best unexplained and arguably of the defendant’s [Mallya] own making. In my view, the claimants [Diageo] are entitled to have their claim progressed expeditiously,” Justice Moulder said, concluding that Mallya was the “author” of his “own misfortune”.

“The claimants say that if the May hearing is adjourned they will suffer prejudice…there would be a race in relation to Mallya’s assets which are subject to a number of competing claims; Mallya may be extradited and this will affect the ability to enforce the judgment against him,” the judge noted, in reference to the extradition order and worldwide freezing order already in place against Mallya.

While the judge agreed to a short extension until April 23 for Mallya’s new lawyers to submit their evidence to the court, having missed an April 5 deadline, she ordered that meanwhile the businessman must pay additional legal costs of 34,000 pounds for Diageo’s lawyers within 28 days.

Diageo, which had acquired Mallya’s United Spirits nearly six years ago, is claiming USD 40 million paid to the liquor tycoon as part of an alleged breach of agreement.

The UK-based drinks giant is also claiming $141 million from Mallya, his son Sidhartha, and two companies linked to them for alleged questionable payments.

The case, dating back to November 2017, is being contested by Mallya and will now go ahead for a full hearing at the Business and Property Courts of the UK High Court on May 23.

The three claimants in the case—Diageo Plc, Diageo Holdings Netherlands BV and Diageo Finance Plc— are seeking a total of $181 million from four defendants—Vijay Mallya, his son Sidhartha, Watson Limited and Continental Administrative Services Limited (CASL).

Mallya’s counsel Barrister Daniel Margolin argued for more time to prepare for the full hearing because his firm JHA had received all the documents in the case, including nearly 1,750 electronic files, only towards the end of March.

He raised the worldwide freezing order against Mallya, confirmed by a UK High Court order in May 2018, as the reason for some delays in clearing overdue legal invoices.

However, Diageo’s counsel instructed by law firm Slaughter and May, Barrister Saul Lemer, argued that Mallya had “historically procrastinated” in the case and used the “same strategy time and again” of changing solicitors and seeking more time from the court.

Margolin assured the judge of no further delays and that Mallya was “acutely aware of the position” he was in.

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