Bank of Baroda Shares Plunge Over 4% After Settling NMC Health Litigation for ₹5,700 Crore

Bank of Baroda Shares Plunge Over 4% After Settling NMC Health Litigation for ₹5,700 Crore​

Bank of Baroda shares tumbled on Thursday after the lender announced an out-of-court settlement concerning the long-running litigation with the joint administrators of NMC Health PLC, NMC Healthcare Ltd and NMC Holding Ltd. The stock exchange filing revealed a significant financial hit following this resolution.

At 2:36 pm, Bank of Baroda was trading at Rs 259.70 on the BSE, reflecting a decline of 4.40%. The market reacted negatively to the mandated settlement amount.

Details of the NMC Litigation Settlement​

In an official stock exchange filing, the bank confirmed that it has agreed to pay $600 million, equivalent to approximately Rs 5,700 crore, to settle the disputed claims. This payment resolves proceedings spanning multiple jurisdictions and legal forums.

The settlement specifically covers actions before both the Abu Dhabi Global Market Court of First Instance and the High Court of Justice of England & Wales concerning the insolvency of the NMC entities. The bank emphasized that its liability in these matters is strictly limited to the agreed settlement sum.

Terms and Conditions of the Settlement Agreement​

The filing clarified several key aspects regarding the terms of the agreement. It stated that "all claims, causes of action, etc. between them have been resolved without admission of liability or wrongdoing." This language suggests a mutually concluded resolution rather than an acknowledgement of fault by the bank.

Furthermore, the settlement is confidential in its details. The filing explicitly added that "the settlement agreement and its terms otherwise remain confidential." Bank of Baroda has confirmed that the payment was made through its Abu Dhabi branch.

Strategic Rationale for Concluding the Disputes​

Bank of Baroda explained the strategic reasoning behind choosing a settlement route. The bank stated that this action is intended "to bring the disputes to conclusion thereby avoiding prolonged litigation, uncertainty and associated cost."

Pursuant to the agreement, the proceedings before the Abu Dhabi Global Market court have been discontinued. Simultaneously, the process of discontinuing the related actions in the English court is underway, indicating a phased closure of the legal matters.