A British court upheld Bank of India’s $10.7 million claim against Nirav Modi | Today’s news
A British court has held diamantaire Nirav Modi personally liable for a debt of more than $10.7 million he owes to the Bank of India, rejecting his argument that a personal guarantee he had given was unenforceable under India’s foreign exchange laws.
In a ruling issued Tuesday and reviewed MintThe High Court of England and Wales ruled that Modi must honor a personal guarantee he signed in 2013 in favor of Bank of India in connection with credit facilities provided to Firestar Diamond FZE, Modi’s Firestar Group in Dubai.
The court held that the guarantee remained valid and enforceable within India of the Act and that the bank properly applied it after the borrower defaulted.
The court said The bank’s request from October 2025 was valid. “That was a legitimate demand for a liability to the Bank under the Personal Guarantee. A personal guarantee is not void or unenforceable under Indian law. Mr. Modi is therefore liable under the Bank’s Personal Guarantee for the principal amount of $4,105,189.34,” the court said.
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The dispute arose out of a facilitation agreement under which Bank of India was proceeding funds to Firestar Diamond FZE. After the company defaulted on the loan, the bank obtained summary judgment against Firestar in 2024 for $4.1 million in principal. She subsequently sought to recover dues from Modi under a personal guarantee.
Modi contested the claim on several grounds, including that the guarantee was invalid as no approval had been obtained from the Reserve Bank of India (RBI) under the Foreign Exchange Management (Guarantees) Ordinance, 2000.
The court rejected the argument and relied on expert opinion on Indian law. The court held that absence of RBI approval does not automatically render the guarantee void or unenforceable. The judgment said that the RBI’s approval can be obtained retrospectively and that the responsibility for obtaining such approval rests with Modi rather than the flask.
The court also rejected Modi’s contention that the bank had not served a valid demand under the guarantee. He found that the October 2025 claim was sent to the contract address listed on the warranty and therefore constituted valid service.
Modi also questioned the bank’s interest calculation after Libor (London Interbank Offered Rate) – the global benchmark used to price loans – was discontinued in September 2024.
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He argued that Bank of India’s decision to switch to secured funding overnight rate (SOFR), the benchmark that largely replaced Libor, meant changing the terms of the loan agreement without its consent.
The court rejected the argument, saying that the contract expressly allowed the bank to choose an alternative benchmark if Libor was no longer available.
As a result, the court ruled that Modi was liable for the principal amount of $4.1 million along with contractual interest. According to the bank’s claim, the total outstanding amount including accrued interest as of September 2025 was approximately $10.74 million.
The decision comes as Modi continues to face extradition proceedings in the UK linked to the alleged ₹13,000 Crore Punjab National Bank Scam. Modi, who was one of India’s most prominent diamond merchants, left the country in 2018 allegations of fraud have surfaced. He was arrested in the UK in March 2019 and remains in custody while he challenges extradition to India.
Inquiries emailed to Bank of India, Santanu T. Ray, Liquidator Firestar Diamond International Pvt. Ltd, the Indian entity of Firestar Group, and Kenton Solicitors, the British law firm that represented Modi in the case, did not respond by press time.
