The High Court of Justice in England and Wales has held fugitive businessman Nirav Modi personally liable under a guarantee executed in favour of Bank of India, directing him to pay the outstanding principal debt of USD 4.1 million together with accrued interest arising from loans advanced to Firestar Diamond FZE.
The dispute arose from a facility agreement entered into between Bank of India and Firestar Diamond FZE, a Dubai-incorporated company within the Firestar group. In 2013, Modi executed a personal guarantee securing the company’s obligations under the facility. After Firestar defaulted on repayment obligations, Bank of India obtained summary judgment against the company in 2024 for USD 4,105,189.34. The amount remained unpaid, prompting the bank to pursue Modi under the personal guarantee.
Modi challenged the claim on multiple grounds, arguing that the guarantee was unenforceable under Indian law for want of approval from the Reserve Bank of India under the Foreign Exchange Management Act (FEMA), that he had not been validly served with a demand notice, and that the bank could not rely on the judgment debt against Firestar to proceed against him.
Rejecting these contentions, Deputy High Court Judge Simon Tinkler held that the October 2025 demand notice had been validly served and that the debt sought to be recovered constituted a liability covered by the guarantee. The Court found that the guarantee expressly entitled the bank to proceed directly against Modi without first exhausting remedies against Firestar Diamond.
On the FEMA issue, the Court accepted expert evidence led by the bank and held that the absence of RBI approval did not render the guarantee void or unenforceable. The Court noted that Indian law permits such approval to be granted retrospectively and that the obligation to obtain any necessary permission rested on Modi himself. Consequently, he could not rely on his own failure to obtain regulatory approval to avoid liability under the guarantee.
The Court further rejected arguments that the claim was time-barred and upheld the bank’s calculation of interest, including interest accruing after the discontinuation of synthetic LIBOR, finding that the facility agreement itself provided a contractual mechanism for determining a replacement benchmark rate.
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Accordingly, the Court concluded that Modi was liable under the personal guarantee for the outstanding principal amount of USD 4,105,189.34 together with contractual interest, bringing an end to a dispute that has been pending since 2018.
