New Delhi: The Delhi high court on Tuesday reserved its verdict on an appeal by SpiceJet Ltd and its promoter Ajay Singh against a 29 July ruling on a share transfer dispute with KAL Airways Pvt. Ltd.
Over the last few hearings, a bench headed by Justice Ravindra Bhat considered various possibilities of resolution between the parties but the proposals were not acceptable to them.
Under one such proposal, the court considered the possibility of SpiceJet furnishing a bank guarantee of Rs308 crore to the court by 31 August, which would be substituted by cash by 31 October. The remaining amount of Rs270 crore would be paid in shares.
On 29 July, Justice Manmohan Singh directed SpiceJet to deposit Rs579 crore in five equal monthly instalments with the court registry. The court also asked KAL Airways and SpiceJet to set up an arbitral tribunal to resolve the issue.
One of the main issues that SpiceJet has raised for appealing the 29 July order, the airline’s lawyer C.A. Sundaram told the court, was that the July ruling amounted to an interim order under the Arbitration Act, even when there was no pending arbitration between the two parties.
The case relates to a dispute arising out of non-issuance of warrants in favour of KAL Airways’ non-executive chairperson Kalanithi Maran, after transfer of ownership to Ajay Singh, the current controlling shareholder of SpiceJet.
Maran and KAL Airways had transferred their entire 58.46% stake in SpiceJet, amounting to 350.4 million shares, to its co-founder Ajay Singh in February 2015, leading to a change in ownership of the airline.
Under the agreement, KAL Airways and Maran were to receive redeemable warrants in return for the Rs690 crore they spent on SpiceJet towards operating costs and debt payment.