State Bank of India & Ors v Mallya [2021] EWHC 1740 (Ch) (26 May 2021)

State Bank of India & Ors v Mallya [2021] EWHC 1740 (Ch) (26 May 2021)

The court has power to validate payments for legal costs in foreign proceedings under section 284, but the appellant failed to provide sufficient evidential justification and safeguards; the judge was justified in refusing validation relief and the new evidence was inadmissible. The costs order was wrongly based on the banks being the successful party; costs should be costs in the case.

Citation
[2021] EWHC 1740 (Ch)
Parties
Petitioners/respondents: State Bank of India & Others; Respondent/appellant: Dr. Vijay Mallya
Jurisdiction
England and Wales
Judgment Date
26 May 2021
Procedural Posture
Chancery Appeal / Appeal From Deputy ICC Judge Barnett's Order Dated 8 February 2021
Outcome
Principal appeal dismissed; costs appeal allowed; appeal concerning Judge Prentis's order dismissed.
Legal Topics
Validation Orders, Costs of Bankruptcy Proceedings, Pari Passu Principle, Jurisdiction Under Insolvency Act 1986, Case Management Discretion
Insolvency Bankruptcy Civil Procedure Validation Orders Costs of Bankruptcy Proceedings Pari Passu Principle Jurisdiction Under Insolvency Act 1986 Case Management Discretion

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Parties

State Bank of India & Others

Petitioners/respondents

Dr. Vijay Mallya

Respondent/appellant

Procedural Posture

Chancery Appeal / Appeal From Deputy ICC Judge Barnett's Order Dated 8 February 2021

Legal Issues

  1. 1 Whether the court has power to validate payments for Indian legal proceedings under section 284 of the Insolvency Act 1986
  2. 2 Whether the appellant provided sufficient evidential justification for validation relief
  3. 3 Appropriate approach to costs in applications for validation orders

Ratio Decidendi

The court has power to validate payments for legal costs in foreign proceedings under section 284, but the appellant failed to provide sufficient evidential justification and safeguards; the judge was justified in refusing validation relief and the new evidence was inadmissible. The costs order was wrongly based on the banks being the successful party; costs should be costs in the case.

Court Disposition

Principal appeal dismissed; costs appeal allowed; appeal concerning Judge Prentis's order dismissed.

Orders

  • Validation relief for Indian legal fees refused.
  • Costs for hearing before the judge to be costs in the case.