In a major blow to budget carrier SpiceJet, the Delhi High Court on Monday dismissed its review petition and imposed a ₹50,000 in airline application costs.
Budget carrier SpiceJet had sought relief from an earlier order directing it to deposit ₹144.5 crore in its long-running arbitration dispute with Kalanithi Maran and KAL Airways Pvt. Ltd.
₹148 million crowns as a guarantee instead of depositing cash.
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The outcome of the case is significant for the financial stability of the airline.
₹144.5 million could jeopardize its operation.
According to court filings, approximately 22,000 passengers and 7,000 employees have been affected as a result of the recent flight disruptions.
The airline proposed furnishing an unencumbered property in Gurugram worth approx ₹148 million crowns as a guarantee, instead of depositing cash. However, the court refused to accept this alternative and insisted on depositing cash.
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SpiceJet said the Gurugram property is not encumbered and that the airline is willing to deposit title deeds with the court as security.
KAL Airways, owned by Sun Group chairman Kalanithi Maran, opposed the suit, arguing that
₹400 million including interest in the arbitration. “Interest is not calculated correctly in their books.
Maran’s side also opposed the proposal to substitute a cash deposit with property, contending that the arbitral award must be satisfied through monetary payment. She argued that the plea was an attempt to delay compliance with the court orders.
The dispute dates back to January 2015, when Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh during a period of acute financial distress. As part of the transaction, Maran got poured ₹$679 million to the airline through convertible warrants and preferred shares.
Maran later claimed that the instruments were not issued by the new management and demanded a refund, prompting arbitration proceedings.
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In July 2018, the arbitral tribunal rejected Marano’s claim for termination ₹1,300 crore in damages but ordered SpiceJet to return the money ₹579 crores along with interest.
₹270 crore bank guarantee and ordered SpiceJet to pay ₹
SpiceJet says it has already paid ₹730 crore to Maran and KAL Airways, including principal and interest. However, disputes over the calculation of dues continue.
This was noted by the Delhi High Court in January this year ₹According to earlier instructions, 194.51 million crowns remained due. After editing ₹50 crore already deposited, the court ordered SpiceJet and Ajay Singh to deposit the remaining ₹144.5 million crowns.
