Liquidators of BCCI pay £73m to Bank and ask for settlement

The liquidators of the Bank of Credit and Commerce International have paid £73m to the Bank of England in an attempt to settle the central bank's record-breaking claim for costs, the high court was told yesterday.

However, the Bank is refusing any offer of settlement of its £81m costs claim, which is being brought following the sudden abandonment of the liquidators' £850m damages suit in November.

The payment is regarded as a technicality and in offering the settlement the liquidators had argued that Mr Justice Tomlinson, who heard the original case, had no jurisdiction to hear yesterday's proceedings.

The Bank is holding out because it wants Mr Justice Tomlinson to make a written judgment exonerating the Bank and 22 officials who were accused by the liquidators, at accountants Deloitte, of misfeasance in public office before the claim was withdrawn in November. By the time the case "spectacularly imploded" the hearing had run for more than 255 days and taken 12 years of litigation between the collapse of BCCI in 1991 and the start of claims in 1993.

Unusually, the liquidators were not in court yesterday to hear Nicholas Stadlen, QC for the Bank, ask the judge to rule that the central bank should be allowed to claim indemnity costs - the highest the courts can dictate - from the liquidators and issue an exoneration.

Mr Stadlen told Mr Justice Tomlinson that the liquidators were avoiding court to "skulk into the shadows without any suggestion of an apology".

While the liquidators at accountants Deloitte were arguing that they could no longer afford to spend more money on the case, he said this "plea of poverty" was "hollow" given the $325m they had received in fees during the liquidation of BCCI. He said the liquidators' attempt to settle the claim for costs was a "ploy to stifle the courts".

The Bank is claiming £73m to cover its legal costs during the 12-year period of litigation as well as £8m in lost interest.

Mr Stadlen told the judge that even though the liquidators had made the interim payment of £73m they were threatening "trench warfare" if the case was not settled. Mr Stadlen outlined reasons why the judge should exonerate all the officials involved and accused the liquidators of "assiduous courting of publicity".

The case was officially brought in the name of Three Rivers district council which lost money when BCCI collapsed.

The hearing continues.