PNB Loses U.K. High Court Appeal In $45-Million Deceit Claim
The British subsidiary of Punjab National Bank has lost its U.K. High Court appeal in a $45-million deceit claim against seven individuals and two companies, based in India and the U.S.
The issue in contention was whether the High Court of England and Wales should accept jurisdiction to try the claim by London-based Punjab National Bank International Ltd.’s, involving eight loans it made between March 2011 and December 2014 for oil re-refining and wind energy generating projects in the U.S.
Sir Geoffrey Vos, Chancellor of the High Court, heard the appeal earlier this month against a previous decision against PNBIL by Chief Master Matthew Marsh.
"The appeal as a whole against the Chief Master's order of March 1, 2019 must be dismissed”, Judge Vos concluded in his ruling on Tuesday.
U.K.-based law firm Zaiwalla & Co represented eight of the defendants against PNBIL Ravi Srinivasan, Trishe Resources Inc (U.S.), Vathsala Ranganathan, Pesco Beam Environmental Solutions Inc (U.S.), Pesco Beam Environmental Solutions Private Limited, Anantharaman Shankar, Luke Staengl and Anantharam Subramamium.
"PNB has now lost twice in this case i.e. first before Chief Master Marsh and now before Sir Geoffrey Vos, Chancellor of the High Court. In both instances, the court found that PNB had failed in its duty to make full and frank disclosure”, said Kartik Mittal, Partner at Zaiwalla & Co.
PNBIL also faces a costs order of around Great Britain Pound 215,000 towards the cost of the appeal. It has, however, indicated to the court that it plans to pursue the case further and apply for permission to appeal against the latest order in the U.K. Court of Appeal.
"PNB has indicated to the court that it intends to apply for permission to appeal to the Court of Appeal. As this would be a second appeal, the test for granting permission to appeal is stringent," Mittal said.
"Permission to appeal will only be granted by the Court of Appeal if PNB can show that its appeal would have real prospects of success and it raises an important point of principle or practice”, he said.
"Our clients feel vindicated in their belief that these allegations have no basis in reality," added Rohit Ralleigh, Senior Solicitor at Zaiwalla & Co. involved with the case.
All the defendants, except one based in the U.S., are resident in India.
PNB International Ltd. had claimed that it had been misled and defrauded by the actions of the defendants following the granting of loans amounting to $45 million to companies in the US and India controlled by the individual defendants. The bank also alleged that money had been siphoned off and payments due had not been made under the loan facilities and guarantees.
In its appeal in the commercial court division of the High Court in London, the bank was represented by law firm Gunnercooke LLP.
PNBIL is the wholly-owned subsidiary of PNB in India, which started its U.K. operations in 2007 and operates through seven branches around the country.