Diageo wins $135m case against Vijay Mallya
Its claim was to claw back a $40 million (Rs 352 crore) payout Diageo had made to Mallya in 2016, as part of the $75 million (Rs 661 crore) settlement for his departure from United Spirits (USL), as well as a $135-million loan Diageo had refinanced for Mallya's company Watson.NAOMI CANTON | TNN | May 25, 2019, 08:24 IST
LONDON: Embattled Vijay Mallya and his son Siddharth have lost a $135-million (Rs 1,190 crore) battle in the high court brought against them by the world's largest producer of spirits Diageo.
Diageo sued the duo as well as Watson Limited, an offshore company registered in Mauritius, whose shares are held on trust to Mallya, and Continental Administration Services Limited (CASL), a Mallya family trust registered in St Kitts and Nevis, of which the family are beneficiaries, in the high court in London on Friday.
Its claim was to claw back a $40 million (Rs 352 crore) payout Diageo had made to Mallya in 2016, as part of the $75 million (Rs 661 crore) settlement for his departure from United Spirits (USL), as well as a $135-million loan Diageo had refinanced for Mallya's company Watson.
Diageo, renowned for brands like Johnnie Walker, had agreed to pay $40 million to Mallya in cash and $7 million every year for five years thereafter when he was removed as chairman from USL on 25 February 2016. Diageo holds a 54% stake in USL. Diageo has not paid $7 million in 2017, 2018 or 2019 and now wants to get the $40 million back claiming breach of contract.
Mallya has a counter-claim against Diageo for $21 million for the unpaid chunk of the $75-million settlement.
The commercial court heard that when Diageo in November 2012 was in the process of acquiring shares in USL, it agreed to become a backstop guarantor of the $135-million loan that Watson then owed ICICI Bank. Watson had borrowed the money to finance its 50% stake in Mallya's Force India F1 team.
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