Hipgnosis Music Limited (HML), founded by Mercuriadis in 2015 and now being wound up, had served proceedings to all three parties in November, accusing them of stealing a "business opportunity".

At the time, HML also alleged HSF "unlawfully assisted Mr Mercuriadis with, or received," this alleged "diversion of business opportunity".

HSF had sought indemnity in the case and the refusal to do so by Mercuriadis and Hipgnosis Songs Management (HSM) will add pressure to an already strained relationship.

"The company is concerned, having been assured by Mr Mercuriadis and the investment adviser that these claims are without merit and that they intend to vigorously defend them, that the request for an indemnity was refused," HSF said in a statement.

HSF said it plans to go to the High Court to seek full indemnity against the legal proceedings.

(Reporting by Eva Mathews in Bengaluru; Editing by Savio D'Souza)