Kalanithi Maran, CMD, Sun Network. File
| Photo Credit: Bijoy Ghosh
The Delhi High Court on May 17 set aside a single judge bench order which had upheld an arbitral award asking SpiceJet and its promoter Ajay Singh to refund ₹579 crore plus interest to media baron Kalanithi Maran.
A bench of Justices Yashwant Varma and Ravinder Dudeja allowed the appeals filed by Mr. Singh and SpiceJet challenging the single judge’s July 31, 2023 order.
“The appeals stand allowed. Consequently the July 31, 2023 order (of the single judge) is set aside,” the bench said.
The division bench had earlier refused to stay the single judge’s order and had asked Mr. Maran and his company Kal Airways to respond to the appeal.
SpiceJet and Mr. Singh’s counsel had earlier argued that his challenge was on the issue of 18% interest which the tribunal had directed SpiceJet to pay.
On July 31, 2023, the single judge had upheld the award announced by the arbitral tribunal on July 20, 2018 in favour of Mr. Maran and Kal Airways.
It had said the court was barred from entering into the merits of an award unless there was an error that was apparent on the face of the record or an illegality that goes to the root of the matter.
Mr. Singh had approached the single judge bench of the high court challenging the arbitral award.
The case dates to January 2015, when Mr. Singh, who owned the airline earlier, bought it back from Mr. Maran after it was grounded for months due to resource crunch.
While the tribunal had asked Mr. Maran to pay Mr. Singh and the airline ₹29 crore in penal interest, Mr. Singh was asked to refund ₹579 crore plus interest to Mr. Maran.
The tribunal, created in 2016 on the orders of the Delhi High Court to adjudicate the share transfer dispute, had held that there was no breach of a share sale and purchase agreement reached between Maran and current promoter Mr. Singh in late January 2015.
In a relief to Mr. Singh, the tribunal had, however, rejected Mr. Maran’s appeal for damages of ₹1,323 crore from the Gurugram-based carrier.
In February 2015, Mr. Maran of the Sun Network and Kal Airways, his investment vehicle, had transferred their 58.46% stake in SpiceJet to Mr. Singh for ₹2 along with ₹1,500 crore debt liability, after the airline was grounded due to a severe cash crunch.
Mr. Singh was the first co-founder of the airline and is now its chairman and managing director.
As part of the agreement, Mr. Maran and Kal Airways had claimed to have paid Spicejet ₹679 crore for issuing warrants and preference shares.
However, Mr. Maran approached the Delhi High Court in 2017, alleging SpiceJet had neither issued convertible warrants and preference shares nor returned the money.
