SC spikes StanChart writ against Citibank

The Supreme Court (SC) today rejected the application of Standard Chartered Bank alleging unjust enrichment by Citibank following an earlier judgment of the apex court in the dispute between them arising from the securities scam.

The special court had directed the Citibank to pay Rs 55,73,92,241 with interest to Standard Chartered. In a 'back-to-back' suit, the special court had also asked Canbank Financial Services Ltd to deliver 9 per cent IRFC bonds of the value of Rs 50 crore along with 9 per cent interest to Citibank.

Both Citibank and Canfina appealed to the Supreme Court. It reversed the decision of the special court by a judgment delivered in July this year.

The Supreme Court had directed restitution of the amounts following the setting aside of the special court order. It directed Standard Chartered to pay 12 per cent interest on the amount received by it from Citibank whereas the Citibank was asked to pay only 9 per cent interest on the amount received by it.

Standard Chartered argued that the rates of interest were inequitable, unjustly enriching the Citibank by payment of interest at a higher rate of 3 per cent. The actual difference by which Citibank became richer was Rs 21,81,44,923.

The Supreme Court bench comprising chief justice R C Lahoti and justice Ashok Bhan rejected the contention of Standard Chartered, observing that the comparison between the two rates was "wholly irrelevant".

The special court passed decrees for different amounts with different rates of interest. Moreover, the special court had fixed the rate. The Citibank could not be asked to pay interest at a rate higher than what was granted to it in the suit, the SC said.