The Mittal family at an Olympic party last summer; (right) Moni Varma and wife Shoba at a book launch in London. Pictures by Amit Roy
London, March 5: Lakshmi Mittal and Moni Varma, two of Britain’s most respected Indian businessmen who were due to begin a high court battle in London today over a Nigerian oil deal, instead settled their differences at the weekend over a cup of tea.
“It’s been amicably settled,” Varma told The Telegraph. “Am I happy? I am happy. But I don’t want to rub anyone’s nose in it. Let Mittal’s wealth grow four times.”
A joint statement issued today by the warring sides gave little away: “Moni Varma and Lakshmi Mittal are pleased to announce that their differences have been resolved. They shall be making no further comment.”
Mittal, the world’s biggest steel maker as chairman and CEO of ArcelorMittal, had his family fortune valued at £13.5bn (Rs 74,150 crore) last year though the price of steel has come down since then.
While he is number one on the Asian Rich List (and the British one), Varma, often referred to as the “Basmati Baron” as an importer of rice, is ranked 50 with £84m (Rs 698 crore). His firm is called Veetee Rice.
Journalists turned up for the start of the trial in Court No. 19 at the Rolls Building in the high court where Manmohan Chander Varma (Moni Varma) was due to start proceedings against Lakshmi Niwas Mittal. Justice Burton was due to preside over the case.
But the court, which was in darkness, was locked and there was not a barrister to be seen. This was extremely disappointing to British journalists who had been relishing the prospect of the ways of the Indian superrich being laid bare.
A clerk informed the dejected journalists: “The case has been removed from the lists. They reached an out-of-court settlement.”
The legal battle was listed as “one to watch” by The Lawyer magazine.
Some legal Rottweilers were set to add to the sense of drama. For Varma, Robert Griffiths QC had been retained, and for Mittal, the barrister was Paul Lowenstein QC.
Mittal, who funded the ArcelorMittal Orbit at the Olympics last summer, has become a household name in Britain because of his sponsorship of the £19m sculpture at the behest of Boris Johnson, mayor of London.
For Varma to challenge Mittal might have appeared like David taking on Goliath, but the former has been pursuing his claim doggedly for six years.
Varma claimed he had brokered an oil deal between Olusegun Obasanjo, Nigeria’s former President, and Mittal. These involved two oil exploration licences for which Varma expected a success fee of between 5 per cent and 15 per cent. The two men, who had previously been on cordial terms, went to Nigeria in Mittal’s private jet. In the end, there was no oil deal.
Mittal said in court filings that he offered Varma $5 million spread over 20 payments in 2007, which Varma refused. Mittal’s attorneys said in court documents that Varma’s lawsuit was “an opportunistic, speculative piece of litigation” that was “bound to fail”.
Mittal came to Britain from India via Indonesia, while Varma was born and brought up in Malawi.
The two oil leases in the Niger Delta region required around $6 billion of investment in an 180,000 barrel-a-day refinery, according to Mittal’s court documents.
Varma claimed the promise of commissions was made to him orally and not written down while the pair were in Mittal’s jet.
Mittal denied such a contract was ever made and contended that even if there were an agreement, Varma would not be entitled to any commission because he had not played any causative role in brokering the deal.
The deal in question involved a joint venture (JV) between a Mittal company, an Indian state oil company and the Nigerian state in which the JV acquired two Nigerian oil blocks in return for a $6bn investment in Nigerian infrastructure. In the end, the oil fields both proved unproductive.
It is understood that friends urged both sides to settle. If the respective barristers had got their claws into the claimant and the defendant, there was a high risk their reputations would be shredded.
The settlement is being kept confidential for the time being though a source suggested that it could be anywhere between $15m and $25m.
“It’s just a guess,” the source emphasised.