The High Court of Justice in London has determined that Nirav Modi, a fugitive economic offender, is personally responsible for paying over $11 million (approximately ₹100 crore) to the Bank of India. This decision arises from a 2013 personal guarantee provided by Modi in favor of the bank, as documented in the case of Bank of India v. Firestar Diamond FZE & Ors.
Sitting at the London Circuit Commercial Court, Deputy High Court Judge Simon Tinkler dismissed Modi’s primary defenses, which were based on Indian foreign exchange law, issues related to the service of demand, and the calculations of interest. Judge Tinkler outlined that the central issue was whether Modi had been appropriately served with a demand for his liabilities to the bank and if the guarantee was enforceable. Both questions were resolved in the bank’s favor.
The court adjudicated that the Bank of India was justified in invoking Modi’s personal guarantee following the failure of Firestar Diamond FZE, a Dubai entity within the Firestar group, to repay the facilities extended under an English-law facility agreement. The bank had initially loaned $9.83 million to Firestar Diamond FZE with the understanding that Modi would personally ensure repayment if the entity defaulted. After accounting for set-offs and other recoveries, the unpaid principal stood at $4,105,189.34, a sum that Modi acknowledged as the outstanding debt.
Previously, in 2024, the bank secured a summary judgment against Firestar Diamond FZE for $4,105,189.34 plus interest. Firestar Diamond FZE is now dormant, and its parent company in India, Firestar International Pvt Ltd, has been declared insolvent.
Modi contended that the guarantee was void or unenforceable without prior approval from the Reserve Bank of India (RBI), as required by the Foreign Exchange Management (Guarantees) Regulations 2000. Expert witnesses from both sides concurred that these regulations applied, placing the onus on the Indian resident Modi to obtain RBI approval. However, the bank’s expert, Sushmita Gandhi, argued that any non-compliance with the FEM Regulations could be rectified and that the RBI could potentially approve the guarantee retrospectively, thus maintaining its validity. The judge accepted this evidence, affirming the enforceability of the guarantee.
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A pivotal element of the trial was the demand sent to Modi in October 2025 at his designated address in Mumbai, as well as to HMP Thameside, where he was detained pending extradition to India. The bank initially demanded repayment from Modi in April 2018, with a formal demand following in October 2025 while Modi was incarcerated in an English prison.
Modi challenged that demands under the guarantee required delivery by registered post, asserting that ordinary post was insufficient. The court found that the terms of the personal guarantee allowed service by letter, eliminating the need for registered post, and confirmed that the demand was properly dispatched. The court also held that service at Modi’s Mumbai address complied with the guarantee’s requirements, and acknowledged that Modi had indeed received the October 2025 demand in prison and was fully aware of its contents.
Additionally, Modi disputed the bank’s interest claims, arguing that the calculation post-September 30, 2024, was flawed due to the cessation of synthetic LIBOR publication. He claimed the subsequent demands did not reflect any legitimate liability. The judge refuted this argument, emphasizing the loan was clearly repayable on demand, and the contract permitted the bank to transition to a new benchmark rate, SOFR, after LIBOR was discontinued.
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The court also criticized HMP Thameside and HMP Pentonville for their significant failures, which disrupted the civil trial process. The judge noted that the prison service’s failure to assist with the administration of justice or comply with court orders caused various issues, including the postponement of the initial trial date. Modi’s trial scheduled for January 2026 was vacated due to the mishandling of his legal papers during a transfer between prisons, and Pentonville failed to produce him in court on two occasions. The prison authorities later issued a formal apology and outlined corrective measures.
