Diageo To Take Legal Steps Against Vijay Mallya Linked Companies For Not Repaying Dues As Ordered By UK Court

Diageo plans to proceed legally against two companies linked to wilful defaulter Vijay Mallya.

The company has alleged that Mallya, his son Siddharth Mallya as well as companies linked to them like Watson Ltd and Continental Administration Services Ltd (CASL) are liable to repay a more than USD 146 million (about Rs 1,020 crore) loan availed from Diageo Holdings Netherlands (DHN).

Earlier, a UK court had decided in favour of DHN that Watson is liable to pay USD 135 million and an additional interest of USD 11 million.

The court had ruled that CASL too was liable to pay 50% of “any such amount unpaid by Watson, which amounts to USD 67.5 million and an additional interest of USD 5.5 million.

In order to recover the dues, Diageo and DHN are in the process of considering further enforcement steps against Watson Ltd and CASL both in the UK as well as other jurisdictions where they are present or hold assets.

Incidentally, Diageo has been engaged in legal battles against Mallya for a few years now, both in India as well as the UK.

According to Diageo, Watson remains liable for all amounts paid by DHN. Also, under a guarantee documentation with Standard Chartered, DHN is entitled to the benefit of the underlying security package for the loan.

This would include certain shares in United Breweries Limited (UBL) held solely by Mallya, besides certain other shares in UBL held by Mallya jointly with his son Sidhartha Mallya, as well as the shareholding in Watson.

Incidentally, an order passed by a UK Court could be enforced in India in the manner stated in Section 44A of the Code of Civil Procedure. It provides for enforcement of decree (including one given by the High Court in UK) to be considered as a decree passed by an Indian civil court.