It was the house from where Vijay Mallya attended the extradition trial at the Westminster Magistrates’ Court. It was also the house which came handy for his sojourns to pricey restaurants and posh clubs in central London. On Tuesday, Swiss Bank UBS got a possession order for 18-19 Cornwall Terrace, leaving Mallya and his family members facing the prospect of an eviction.
But just like the extradition case, which he lost, yet remains in Britain, could there be a way out? To begin with Vijay Mallya says that the bank holds cash in excess of the mortgage; UBS requires a Bahamian court order to use it. A worldwide freezing order, bankruptcy, financial crunch and Indian banks sniffing around have all added to his complications, the sum total of which has been that the £20.4 million interest-only mortgage, taken in 2012 putting the property as security, has remained unpaid.
So now a near-certain eviction of a former Indian billionaire from a property in London by a Swiss bank hinges on the legal principles governing a Trust based in the Bahamas. But before that, Mallya needs to successfully seek permission to appeal the ruling that has come against him. Once that is done, the next step would be to actually deliver the cash to UBS, or thrash out a deal.
Given previous twists and turns in the case, the possibility of Mallya coming up with a solution or settlement cannot be ruled out. In May 2019, Mallya convinced UBS to agree on a consent term, just weeks before the trial was to begin, which set an April 30, 2020, deadline to pay the mortgage. Then in March 2020, despite opposition from the Indian banks, he got the high court’s approval to enter into a loan and mortgage agreement with a Bahamas registered entity to repay UBS.
But despite the successful refinancing, UBS still did not get the money back, forcing them to again approach the courts, seeking possession of the property. On January 10, 2022, the last hearing before the judgment came out, Daniel Margolin representing Mallya told the court of a game-changing letter of intent spelling out plans for the sale of the property for £43 million. “It would have the effect of paying UBS in full,” said Margolin.
The court was told that the property has been subject to two viewings by representatives of the intended purchaser, and that the sale of the property would cause severe prejudice to Mallya’s mother who is 95 years old. “So far as UBS is concerned, apart from mere fact of delay, there is no prejudice if execution is stayed for a brief period of time because interest continues to accrue and is secured and there is substantial degree of headroom over and above the amount.”
The strongest ground on which Mallya was seeking an adjournment for a possession order was described as a “surprise which was thrown at us” by Fenner Moeran, who represented UBS. Moeran said it was not a concrete offer and characterised it as coming from an “unknown purchaser”, hinting that the purchaser could be a party related to the Mallya family. “The failure to redeem by 30 April 2020 was not our fault…they should not get more time.”
The arguments proceeded further, leading to sharper exchanges marked by use of terms like non-cooperation, discrepancy in figures, lack of professionalism, erection of roadblocks. Margolin went on to describe the enforced sale by UBS as an “armageddon scenario in terms of an ultra-prime property consisting of two houses merged into one”. So to use his own lawyer’s expression, Mallya is now facing an Armageddon scenario.
Remarkably the dispute with UBS began the very month Mallya came to the UK from India in March 2016. Starting from the county court, the case raced to the high court due to non-payment of dues and disagreements over the tenure of the loan. The bank sought possession, and also succeeded in applications to strike out several of Mallya’s arguments. In November 2018, Mallya was directed to pay £88,000 in legal costs to UBS.
As the case neared the full trial, no one could be faulted to see that the bank had an upper hand. But before it could translate into anything concrete, both the parties agreed on a consent term in May 2019 as mentioned earlier. The property sits on the edge of the Regent's Park, has over 30 rooms and was considered big enough to house a private school. Never mind the very obvious average-sized doors, entrances to the naked eye, the rear of the house has an assortment of his super cars.
The property underwent repairs and refurbishment for four years before it became habitable in 2012. Among its notable features is a toilet seat made of gold, which was seen by former Financial Times journalist James Crabtree when he went to meet Mallya. But if you are not invited, then speeding vehicles, shiny cycles and sleek joggers make it difficult to stand for long on the pavement opposite his house. You could soak in the tranquility of Regent’s Park, but iron rails and trees can only offer a blinkered view of his house.
Mallya came to own the house in 2007, and in 2013, another Indian, the mining tycoon Pramod Agarwal, became a neighbour by moving into 9 Cornwall Terrace. But in 2016, just three years after the purchase, Agarwal sold it and moved to a more humble nine-bedroom abode away from Central London. Mallya still has a much bigger mansion in Tewin village in Hertfordshire, but it doesn’t have the panache of overlooking the Regent’s Park.
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