Lovells scores Court of Appeal victory for BCCI liquidators

Lovells is today (22 June) celebrating a Court of Appeal victory on behalf of the liquidators of the Bank of Credit & Commerce International (BCCI) against the Bank of India (BoI).

The court has upheld a March 2004 decision by Mr Justice Patten which found that BoI had knowingly participated in BCCI’s fraudulent trading. It said that Judge Patten had been correct to find BoI chief manager for the UK and Europe, KL Samant, “dishonest” for his participation in circular transactions between BoI and BCCI.

The BoI case is connected to the ongoing High Court case brought against the Bank of England, and a similar claim against the Bank of America which settled last year out of court. The litigation follows the collapse of BCCI in 1991, and the liquidators claim that the Bank of England failed to regulate BCCI correctly.

Dismissing BoI’s appeal, the court decided that Samant’s knowledge of the transactions should be held as corporate knowledge of the bank. Judge Patten’s award of $82m to the liquidator stands.

The case is believed to be the first time that a bank has been found liable for fraudulent trading in the UK.

Lovells partner Hugh Lyons led the team acting for the liquidators, Deloitte & Touche, instructing New Square Chambers’ Charles Purle QC. Penningtons’ Rustem Dubash, head of the firm’s India division, acted for BoI instructing 3/4 South Square’s Gabriel Moss QC as counsel.

Lovells is also acting for Deloitte in the ongoing case against the Bank of England in the High Court.