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

Justice Clare Moulder ruled against the 63-year-old businessman's 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 its 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, the judge 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 him as part of an alleged breach of agreement.

The UK-based drinks giant is also claiming USD 140 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.