Delhi High Court Sides With Kalanithi Maran, Asks SpiceJet To Pay Arbitral Award
The award, passed by an award tribunal in July 2018, directed SpiceJet and Ajay Singh (the airline’s chairman and managing director) to refund Rs 579 crore plus interest to former promoter Maran
The Delhi High Court ruled in support of Kalanithi Maran, upholding the arbitral award in his favour against airline SpiceJet, on Monday. The award, passed by an award tribunal in July 2018, directed SpiceJet and Ajay Singh (the airline’s chairman and managing director) to refund Rs 579 crore plus interest to former promoter Maran.
According to a report by Moneycontrol, the airline was allowed to provide a bank guarantee of Rs 329 crore and pay the remaining balance via a cash deposit. While the court upheld the arbitral award, it also rejected Maran’s plea asking for damages worth Rs 1,323 crore from Spicejet.
Spicejet and Singh had urged the court to set aside the cash component of the award. They also sought a waiver on the 12 per cent interest on warrants and 18 per cent interest levied in the award. The court has rejected these requests.
These developments took place after earlier this month the Supreme Court found SpiceJet in non-compliance with the timeline laid by the apex court in February this year. Earlier in February, the top court had directed SpiceJet to pay Rs 75 crore as interest within three months. But, it found the airline had not adhered to its order and held the award as executable on July 7.
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Another Delhi High Court bench is expected to hear the execution proceeding against the award on September 5.
The problem was triggered after Maran and Kal Airways transferred their major 58.46 per cent stock in SpiceJet to Singh. Maran and Kal Airways claimed that they paid the airline Rs 679 crore, as part of the agreement, for issuing warrants and preference shares. But the warrants and preference shares were not allotted to them and they started arbitration proceedings against the airline and Singh.
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