A legal battle over a failed loan has returned to Bermuda’s shores as Mexico Infrastructure Finance seeks to enforce a $22.5 million judgment against the Corporation of Hamilton.

An appeal against the October 11 judgment in the Southern District of New York is pending in the US Court of Appeals.

However, according to a statement of claim by counsel for MIF, dated December 6, no stay has been sought or granted in the wake of the judgment.

“The plaintiff has not been able to locate assets in the State of New York against which to enforce the judgment, which remains unsatisfied in full,” the statement of claim said.

“The defendant is known to have assets in Bermuda against which the judgment may be enforced.

“The judgment against the defendant is a fixed money judgment in the amount of the judgment sum which is final and conclusive, and although currently subject to an appeal, remains enforceable under United States law and there is no stay of enforcement in effect.”

The claim added that the company sought the $22,472,724.51 awarded in the New York judgment, interests and legal costs.

The legal action related to a July 2014 loan to Par-la Ville Hotel and Residences, which was intended to jump-start financing to build a hotel on the site of the Par-la-Ville parking lot.

A total of $12.5 million of the money borrowed by PLV was transferred to Argyle, a Gibraltar-based investment firm. The funds were never invested on PLV’s behalf and it quickly defaulted on the loan.

A judge at the High Court in London ruled in July 2017 that Robert McKellar, the director of Argyle, had engaged in “unjust enrichment” and had spent the money.

While some of the missing cash was recovered, it was reported that the recovery costs had almost “wiped out” any benefit.

The Corporation of Hamilton had guaranteed the loan but argued in court that the guarantee was ultra vires, meaning the body did not have the power to make the guarantee and it was, therefore, unenforceable.

The Privy Council in London, Bermuda’s final court of appeal, found in the corporation’s favour but MIF initiated further legal actions in Bermuda and New York.

In the case heard last month in the Southern District of New York, MIF argued that the corporation had the power to enter into the escrow agreement.

The fund claimed that the corporation breached the agreement when it sent the bank a document that said the funds could be released because a “senior loan or an equivalent” had been secured.

However, the corporation maintained that, like the guarantee, the escrow agreement was ultra vires and MIF was “acutely aware” of the risk when it signed the agreement.

District Judge Denise Cote found in July that the corporation had “turned a blind eye” to potential risks and was liable for losses suffered by MIF.

As of October 11, it was estimated that the interest had brought the total award to $22.47 million.

A spokeswoman for the City said in October: “We respectfully disagree with the decision of the New York federal court and intend to pursue an appeal vigorously.”

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