Upholding the 2018 arbitral award in favour of Kalanithi Maran and his firm KAL Airways, the Delhi High Court bench, presided over by Justice Chandra Dhari Singh, today refused to allow budget airline SpiceJet's plea that sought a waiver in the case. The airline is yet to issue a statement on the matter.
The court has directed SpiceJet and Ajay Singh to pay ₹579 crore award along with interest, to the airline's former promoter Kalanithi Maran.
Additionally, in relief to Ajay Singh, Chairman and CEO, SpiceJet, the Delhi HC has rejected Maran's appeal to recover ₹1,323 crore in damages from the Gurugram-based carrier.
In May 2023, Maran had moved the Delhi HC, stating that Spicejet failed to comply with the apex court order, following which the HC ordered it to pay ₹380 crore to the airline's former promoter.
The Supreme Court on July 7, 2023, had directed the budget airline to pay the entire arbitral amount to its former promoter in the 2018 arbitration award case. While refusing to grant any extension to SpiceJet to pay the said amount, the SC reprimanded the Ajay Singh-led budget carrier for failing to pay ₹75 crore as per its earlier direction.
SpiceJet at that time had said the payment of ₹380 crore as directed to be paid by the Supreme Court was only a security deposit amount, arising from execution proceedings, and that the final amount will be determined by the Hon’ble High Court of Delhi.
Chennai-based Sun Group later said there's "no question" of making an amicable settlement with SpiceJet Ltd as the matter of arbitration award payable by the budget airline has reached finality after the Supreme Court's July-7 order in the case.
As per the latest Delhi HC order, the airline has been directed by the Delhi HC to pay up the amount to Maran and his firm KAL Airways.
The SpiceJet stock opened flat ₹29.16 and fell to an intra-day low of ₹29. At the current share price, the airline's market cap stands at ₹1,765.82 crore.
The dispute between the two parties dates back to 2015 when Kalanithi Maran first approached Ajay Singh, SpiceJet’s current chairman, and managing director, who had been associated with the airline previously. The ownership of the airline was transferred to Singh for ₹2.
At the time of transfer, the company had debt and liabilities outstanding of over ₹3,500 crore with immediate payables of around ₹2,200 crore, and its Boeing fleet was reduced from 41 to 17 aircraft.
To keep the debt-laden carrier afloat, Singh asked the Marans to put in a substantial amount of money to clear up dues including tax liabilities, and also provided some liquidity to keep the company running. It is this ₹578 crore — invested by the Sun Group at the time — which is now the main bone of contention.