Delhi HC Summons SpiceJet MD Ajay Singh in dispute over Arbitral Award
ECONOMY & POLICY

Delhi HC Summons SpiceJet MD Ajay Singh in dispute over Arbitral Award

The Delhi High Court has summoned Ajay Singh, the Managing Director of the budget airline SpiceJet, to appear before it in January. This pertains to a dispute over interest due on an arbitral award exceeding Rs 5.7 billion, which was ruled in favour of media magnate Kalanithi Maran. Justice Manoj Kumar Ohri issued the order on Monday, instructing Ajay Singh to be present at the next hearing scheduled for January 10 next year.

Ajay Singh had previously appeared before the high court on August 24.

During the proceedings, senior advocate Maninder Singh, representing Maran's Kal Airways, informed the high court that SpiceJet and its MD are obligated to pay approximately Rs 4.40 crore to the decree holder (Kal Airways).

However, counsel for SpiceJet disputed this figure, asserting that the remaining balance dues amounted to Rs 1.94 billion. The judgment debtors' appeal under the Arbitration and Conciliation Act is pending consideration.

Senior advocate Amit Sibal, representing SpiceJet and its MD, disclosed that the judgment debtors proposed to issue new equity shares in SpiceJet, equivalent to the amount owed to the decree holder, as a means of fulfilling their liability under the arbitral award.

Nonetheless, counsel for Kal Airways rejected this offer, contending that it was unacceptable. They argued that the judgment debtor had not demonstrated bona fides in discharging the remaining liability under the award.

The high court was addressing an enforcement petition filed by Maran and Kal Airways, seeking enforcement of the arbitral award rendered in their favour. On July 31, a single judge upheld the award announced by the arbitral tribunal on July 20, 2018.

The case originated in January 2015 when Singh, the previous owner of the grounded airline, repurchased it from Maran after months of inactivity due to financial constraints. The tribunal ordered Maran to pay Singh and the airline Rs 290 million in penal interest, while Singh was instructed to refund Rs 5.79 billion plus interest to Maran.

The tribunal, established in 2016 by the Delhi High Court to settle a share transfer dispute, concluded that there was no breach of the share sale and purchase agreement between Maran and the current promoter Singh. Singh had approached the single judge bench of the high court to challenge the arbitral award.

Maran, the founder of the Sun Network, and Kal Airways had transferred their 58.46% stake in SpiceJet to Singh in February 2015 for Rs 2, along with Rs 15 billion debt liability. Despite the relief to Singh from Maran's appeal for damages, the case has been ongoing, with Maran alleging that SpiceJet did not fulfill its obligations under the agreement.

The Delhi High Court has summoned Ajay Singh, the Managing Director of the budget airline SpiceJet, to appear before it in January. This pertains to a dispute over interest due on an arbitral award exceeding Rs 5.7 billion, which was ruled in favour of media magnate Kalanithi Maran. Justice Manoj Kumar Ohri issued the order on Monday, instructing Ajay Singh to be present at the next hearing scheduled for January 10 next year. Ajay Singh had previously appeared before the high court on August 24. During the proceedings, senior advocate Maninder Singh, representing Maran's Kal Airways, informed the high court that SpiceJet and its MD are obligated to pay approximately Rs 4.40 crore to the decree holder (Kal Airways). However, counsel for SpiceJet disputed this figure, asserting that the remaining balance dues amounted to Rs 1.94 billion. The judgment debtors' appeal under the Arbitration and Conciliation Act is pending consideration. Senior advocate Amit Sibal, representing SpiceJet and its MD, disclosed that the judgment debtors proposed to issue new equity shares in SpiceJet, equivalent to the amount owed to the decree holder, as a means of fulfilling their liability under the arbitral award. Nonetheless, counsel for Kal Airways rejected this offer, contending that it was unacceptable. They argued that the judgment debtor had not demonstrated bona fides in discharging the remaining liability under the award. The high court was addressing an enforcement petition filed by Maran and Kal Airways, seeking enforcement of the arbitral award rendered in their favour. On July 31, a single judge upheld the award announced by the arbitral tribunal on July 20, 2018. The case originated in January 2015 when Singh, the previous owner of the grounded airline, repurchased it from Maran after months of inactivity due to financial constraints. The tribunal ordered Maran to pay Singh and the airline Rs 290 million in penal interest, while Singh was instructed to refund Rs 5.79 billion plus interest to Maran. The tribunal, established in 2016 by the Delhi High Court to settle a share transfer dispute, concluded that there was no breach of the share sale and purchase agreement between Maran and the current promoter Singh. Singh had approached the single judge bench of the high court to challenge the arbitral award. Maran, the founder of the Sun Network, and Kal Airways had transferred their 58.46% stake in SpiceJet to Singh in February 2015 for Rs 2, along with Rs 15 billion debt liability. Despite the relief to Singh from Maran's appeal for damages, the case has been ongoing, with Maran alleging that SpiceJet did not fulfill its obligations under the agreement.

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