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New Delhi: The Delhi High Court on Monday upheld a 2018 arbitration order which had asked low-cost carrier SpiceJet and its owner Ajay Singh to reimburse ₹579 crore plus interest to the airline's former promoter Kalanithi Maran.
The decision paves the way for the enforcement of the award. The execution proceedings against the award are pending before another bench of the Delhi High Court, and a hearing in the matter is scheduled for 5 September.
SpiceJet and Singh had filed a petition seeking the setting aside of the award. However, the Delhi High Court has dismissed the petition, saying that it found no reason to interfere with the arbitral award. It also rejected also the airline’s plea for interest waiver on the arbitral award.
In February 2015, Maran had transferred his entire shareholding in SpiceJet to Ajay Singh, the current chairman and managing director of the airline, after the carrier nearly went belly up in 2014-15 due to a severe cash crunch.
Singh, who paid ₹2 to take over the airline, also took over SpiceJet’s liabilities of ₹1,500 crore. As part of the agreement, Maran and Kal Airways also made payments of ₹679 crore to SpiceJet, under Singh, for issuing warrants and preference shares. However, Maran approached the Delhi high court in 2017, alleging SpiceJet had not issued convertible warrants and preference shares or returned the money.
In July 2018, an arbitration panel rejected Maran’s claim of damages of ₹1,323 crore for not issuing warrants to him and Kal Airways but awarded him a refund of ₹579 crore plus interest.
In 2020, the high court ordered SpiceJet to deposit ₹243 crore as interest payment.
On 13 February, the Supreme Court directed the immediate encashment of SpiceJet’s bank guarantee worth ₹270 crore, which was to be paid to Maran and Kal Airways as part of the arbitral award. The apex court also ordered SpiceJet to pay ₹75 crore to Maran and Kal Airways within three months as the interest.
On 7 July, the SC denied any further extension to SpiceJet.
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