New Delhi: In a blow to price range provider SpiceJet, the Supreme Courtroom on Friday refused to remain a Delhi excessive courtroom order directing the airline and its promoter Ajay Singh to deposit ₹144.51 crore in its long-running arbitration dispute with KAL Airways Pvt. Ltd and Kalanithi Maran. The courtroom additionally imposed a price of ₹1 lakh for prolonging the litigation.
A bench of Justices P.S. Narasimha and Alok Aradhe declined to intervene with the excessive courtroom’s 19 January order and rebuked the corporate over repeated rounds of litigation within the matter.
Throughout the listening to, senior advocate Amit Sibal, showing for SpiceJet, urged the courtroom to not impose prices. The bench, nonetheless, remarked that there had been “tons and tons of litigation” and that the courtroom was “by no means seeing the top of litigation” within the arbitral dispute, earlier than imposing ₹1 lakh in prices. It additionally indicated that the quantity could possibly be elevated to ₹2 lakh if such pleas continued.
The refusal to grant aid means SpiceJet should adjust to the excessive courtroom’s 19 January order to deposit ₹144.51 crore in six weeks.
Queries emailed to SpiceJet remained unanswered until press time.
Excessive courtroom findings
In its 19 January order, Justice Subramonium Prasad of the Delhi excessive courtroom recorded that SpiceJet had admitted ₹194.51 crore was due and payable beneath earlier Supreme Courtroom instructions. After adjusting ₹50 crore already deposited, ₹144.51 crore remained excellent.
The excessive courtroom famous that the Supreme Courtroom had handed clear instructions in February and July 2023 requiring compliance inside specified timelines, and held that these instructions weren’t absolutely adhered to.
Rejecting SpiceJet’s rivalry that enforcement ought to await the ultimate final result of its challenges to the arbitral award, the courtroom held that Supreme Courtroom orders can’t be saved in limbo. Referring to Article 144 of the Structure, which requires all authorities to behave in help of the Supreme Courtroom, the courtroom stated continued delay undermines judicial authority.
It accordingly directed SpiceJet and Ajay Singh to deposit ₹144.51 crore with the registry inside six weeks.
Origins of the dispute
The dispute dates again to January 2015, when Kalanithi Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh beneath a share sale and buy settlement, at a time when the airline was going through acute monetary misery.
As a part of the association, Maran and KAL Airways infused roughly ₹679 crore into the airline in the direction of issuance of convertible warrants and desire shares. Maran later alleged that these devices weren’t issued beneath the brand new administration and sought a refund.
The matter was referred to arbitration beneath a three-member tribunal comprising retired Supreme Courtroom judges.
In July 2018, the tribunal rejected Maran’s ₹1,323 crore damages declare however directed SpiceJet to refund ₹579 crore, together with curiosity, regarding the warrants and desire shares.
Either side challenged elements of the award earlier than the Delhi excessive courtroom beneath the Arbitration and Conciliation Act, triggering a chronic section of enforcement petitions, appeals and interim orders.
In February 2023, the Supreme Courtroom directed encashment of a ₹270 crore financial institution assure and ordered SpiceJet to pay ₹75 crore in the direction of curiosity inside a specified interval, warning that non-compliance would make the award absolutely executable.
Whereas substantive challenges continued, enforcement proceedings progressed in parallel, with Maran alleging repeated non-compliance with fee instructions.
The dispute has remained a big authorized and monetary overhang for SpiceJet, which has lately confronted liquidity pressures, plane groundings on account of unpaid dues, and insolvency petitions from sure lessors and collectors.