The brother of Asia's richest man won a preliminary motion in a dispute with three Chinese banks seeking $680 million in defaulted loans, but still suffered a setback as a London judge called his evidence "implausible and highly unlikely" ahead of a full hearing next year.
Judge David Waksman on Monday also said there is "a plain case" to issue an order against Anil Ambani after the banks asked for him to deposit funds with the court before a London trial. The exact terms of the order will be determined in February.
Industrial & Commercial Bank of China Ltd., China Development Bank and the Export-Import Bank of China agreed to loan $925 million to Ambani's firm Reliance Communications in 2012 on condition that he provide a personal guarantee, ICBC's lawyer has previously argued.
The Indian tycoon says that while he agreed to give a non-binding "personal comfort letter," he never gave a guarantee tied to his personal assets -- an "extraordinary potential personal liability."
"I think it is highly probable that at trial his defense will be shown to be opportunistic and false," the judge said in his ruling.
The banks asked Waksman to force Ambani to put up the full amount of the debt "or such other sum as the court consider appropriate" while the litigation continues, according to their court filings in the case.
Ambani's representative focused on the judge's decision to dismiss the banks' summary judgment application for an early ruling on the merits of the case.
"Mr. Ambani has contested the proceedings and put up a strong legal defense, and will continue to contest the proceedings and seek leave to defend, without any conditions as to making of deposits or payments being imposed," the representative said in a statement.
He's the brother of Mukesh Ambani, who's worth $61.7 billion and is the wealthiest man in Asia and ninth richest in the world. Anil, on the other hand, has seen his personal fortune dwindle over recent years, losing his billionaire status.
Ambani's spokesperson said in an email that the court hasn't had a chance to see all of the evidence yet.
"At this stage of the proceedings, the evidence of the personnel of RCom who were dealing with the personnel of the Chinese banks could not be placed, which led to certain doubts being expressed in the judgment on account of the evidence being incomplete and thus appearing implausible," the spokesperson said. "Mr. Ambani is confident that his position would be fully vindicated once all the facts and the entire evidence is before the court."
Anil Ambani was caught up in another legal wrangle earlier this year, when Supreme Court threatened him with prison after Reliance Communications failed to pay to pay Rs 550 crore to Ericsson. The judges gave him a month to find the funds, and his brother, Mukesh, stepped in to make the payment.
The Chinese banks said they welcomed the granting of a conditional order.
"We have always said his defense is not credible," the banks said in a statement. "This is a straightforward debt claim to recover outstanding loans made to RCom in good faith and secured by a binding personal guarantee given by Mr. Ambani."