KAL Airways and its promoter, Kalanithi Maran, announced their intent to seek over Rs 1,323 crore in damages from SpiceJet and its chief, Ajay Singh, as they challenge a recent Delhi High Court order. The declaration, reported by PTI, was promptly refuted by SpiceJet, which described the claims as a reiteration of previously dismissed allegations by both the Arbitral Tribunal and the Delhi High Court.
SpiceJet clarified that KAL Airways and Maran had initially sought damages exceeding Rs 1300 crore in arbitration proceedings. This substantial claim was meticulously reviewed and subsequently dismissed by a panel composed of three retired Supreme Court judges. Persisting in their pursuit, KAL Airways and Maran appealed to the Single-Judge Bench of the Delhi High Court, seeking the same damages amount, but faced rejection once again.
On May 17, 2024, the Division Bench of the Delhi High Court ruled in favor of SpiceJet and Ajay Singh. Consequently, SpiceJet is now pursuing a refund of Rs 450 crore. The Division Bench upheld an arbitral award requiring SpiceJet and Singh to refund Rs 579 crore plus interest to Maran. Additionally, the bench accepted appeals filed by Singh and SpiceJet, challenging the single judge’s order from July 31, 2023, and remanded the case back to the lower court for reconsideration of the petitions against the arbitral award.
In response to these developments, Maran and KAL Airways, after consulting with their legal counsel, decided to challenge the ruling. The decree holders expressed that the judgement is “deeply flawed and warrants further scrutiny.”
A Protracted Legal Battle
The ongoing legal contention highlights the complexities of the dispute. By contesting both the Delhi High Court judgement and seeking damages, Maran and KAL Airways aim to secure a just resolution to a dispute that has purportedly inflicted significant hardship for over a decade. Their statement indicated an intent to execute the arbitral award, pursuing a refund of pending dues amounting to Rs 353.50 crore, in alignment with Supreme Court orders from February 13, 2023, and July 7, 2023, which mandated the execution of the award in favor of the decree holders.
Conversely, SpiceJet has articulated its intention to seek a refund of Rs 450 crore from the total Rs 730 crore paid to Maran and KAL Airways, following the Delhi High Court ruling.
SpiceJet’s Dispute with Kalanithi Maran
The origins of the dispute date back to early 2015, when Ajay Singh, the former owner of SpiceJet, reacquired the airline from Maran after it had been grounded due to financial difficulties. As part of the acquisition agreement, Maran and KAL Airways claimed to have paid SpiceJet Rs 679 crore for issuing warrants and preference shares. However, in 2017, Maran approached the Delhi High Court, alleging that SpiceJet had failed to issue the convertible warrants and preference shares or return the money.
This protracted legal battle underscores the intricate nature of corporate acquisitions and the resultant financial and legal obligations. As both parties continue to contest the outcomes in various judicial forums, the resolution of this dispute remains a critical point of observation for industry stakeholders and legal experts alike.
