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Wednesday, 7 June 2006, 13:28 GMT 14:28 UK

Bank awarded £73m in BCCI costs

BCCI sign The Bank of England has won costs of £73.6m ($136.9m) from the liquidators of the collapsed lender BCCI.

The award brings to an end one of the most expensive cases in UK legal history after Deloitte lost a marathon court case against the Bank last year.

The Bank had considered seeking even greater amounts from Deloitte to cover the costs of the 12-year legal tussle, but that would have meant more delay.

A Bank spokesman said that this final settlement was "an excellent result".

He added that the settlement would allow the Bank to "draw a final line under the case".

A spokesman for the liquidators declined to comment.

Historic case

The award was less than the £80m the Bank had sought in costs after Deloitte dropped its £850m claim in November, ending the first case ever to be brought against the UK central bank.

BCCI TIMELINE


BCCI collapsed in 1991 owing more than $16bn. It is thought to be the world's biggest bank fraud.

The liquidators Deloitte sought damages of £1bn for BCCI creditors, claiming the Bank of England failed to protect investors.

It dropped the case last November after a High Court judgement argued that prolonging the action was not in the best interests of creditors.

'A farce'

In April, the judge in the case, which began in 2004, attacked the lawsuit, branding it a "farce" that "had the capacity to damage the reputation of our legal system".

The case became notorious for its length, the number of witnesses called and the complexity of its arguments.

Opening statements in the case took six months in their own right.

About 6,500 people lost money when BCCI failed in 1991, including small investors and public bodies including 28 local authorities.

The Bank always denied that it had been wilfully negligent in its supervisory duties.

The Bank's legal costs exceeded £70m, while Deloitte incurred costs of about £38m.




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Related to this story:
Judge calls BCCI case a 'farce' (12 Apr 06 |  Business )
BoE rejects £73m BCCI costs offer (30 Jan 06 |  Business )
BCCI liquidators drop £1bn case (02 Nov 05 |  Business )
BCCI's big day in court (13 Jan 04 |  Business )
Bank told to release BCCI files (02 Mar 04 |  Business )
Bank of England accused over BCCI (13 Jan 04 |  Business )

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