An English judge has rejected an attempt by Abu Dhabi Commercial Bank (ADCB) to hear a $1.2 billion trial in London that will accuse senior managers of plundering private healthcare group NMC before it collapsed in 2020.
Judge Mark Pelling said the trial should be heard in Abu Dhabi, in a blow to ADCB which wanted the case heard by an English court so its lawyers could cross-examine former directors of NMC about the “massive fraud” that led to undisclosed debts of up to $5.4 billion.
The bank is suing six executives, including founder Dr Bavaguthu Raghuram Shetty, over a “sustained and deliberate” effort to mislead the bank about NMC’s finances to ensure that the bank kept lending money.
The defendants do not deny there was a massive fraud at NMC, the biggest provider of private healthcare in the UAE, but have pinned the blame on each other, according to court documents.
“Every accused has told the court they were innocent, while at the same time seeking to avoid giving a full account of their actions, distancing themselves from the affairs of NMC Plc, and blaming others,” said lawyer Adrian Beltrami, for the bank.
ADCB said the case should be heard in London because NMC plc was listed on the London stock exchange. Unlike the UAE, a trial in London would have allowed the bank's lawyers to call and cross-examine witnesses, including Dr Shetty, and given them greater access to documents.
But Judge Pelling said Abu Dhabi was a better place to hear the case as the defendants were based there, all the decisions were taken in the UAE and the documents were held there.
The decision was welcomed by Dr Shetty who said that he welcomed the opportunity to clear his name if the case went ahead in the UAE.
He lived in the UAE for 50 years but returned to India in 2020. He has been unable to return to the UAE, where his family lives, because of a travel ban owing to a legal case against him in India.
He said he would seek to return to the UAE as soon he was allowed “not least in order to fully assist in any official processes and investigations”.
“Dr Shetty continues to maintain that he is one of the victims of this fraud and conspiracy,” said his lawyer John Wilkinson, of London-based Farrer & Co.
“If ADCB continues with its claim in the UAE, Dr Shetty will welcome the opportunity to uncover the facts and clear his name.”
ADCB can still appeal Friday's ruling or will have to continue its action in the UAE, where a criminal inquiry has also been launched into the collapse of the group.
Dr Shetty has launched his own legal action in the US against former executives, banks and an auditor, claiming that they were responsible for a complex $5 billion fraud. Dr Shetty claims that cheques were signed in his name without his knowledge by former senior executives.
NMC went into administration in April 2020 after the losses came to light. ADCB said it alone lost $1.2bn as a result of the fraud.
The company came out of administration last month with ADCB appointing three of the seven new board members in a new healthcare company following a major restructuring.
Two NMC units remain in administration allowing administrators to continue an investigation and pursue options to recover funds for creditors.
In his ruling, Judge Pelling said: “I am satisfied that there is another forum which is clearly and distinctly more appropriate than the English forum namely Abu Dhabi.
“There are no circumstances by reason of which justice requires that this claim be tried here rather than Abu Dhabi.”