Delhi HC orders SpiceJet to pay Rs 500 mn in Maran-KAL airways dispute

The Delhi High Court instructed SpiceJet, led by Ajay Singh, to make a payment of Rs 500 million to KAL Airways within six weeks. This ruling is in connection with an arbitration award obtained by the airline's former promoter, Kalanithi Maran, and KAL Airways. The court's directive is contingent upon the resolution of an appeal filed by SpiceJet, challenging the interest amount specified in the arbitration award. The case is scheduled for further hearing on May 14. The origin of the case can be traced back to January 2015, when Ajay Singh, the current owner of the airline, repurchased it from Maran after a prolonged grounding period caused by financial constraints. The arbitration tribunal had previously mandated Maran to pay Rs 290 million in penal interest to Singh and the airline. Conversely, Singh was instructed to reimburse Rs 5.79 billion plus interest to Maran. Established in 2016 by the Delhi High Court to address the share transfer dispute, the tribunal determined that there was no violation of the share sale and purchase agreement signed between Maran and the present promoter Singh in late January 2015. In February 2015, Kalanithi Maran and Kal Airways transferred their 58.46% stake in SpiceJet to Ajay Singh for Rs 2, along with a debt liability of Rs 15 billion, following the airline's grounding due to severe financial constraints. Ajay Singh, the initial co-founder and current chairman and managing director of the airline, entered into an agreement where Maran and Kal Airways claimed to have paid SpiceJet Rs 6.79 billion for the issuance of warrants and preference shares. However, in 2017, Maran approached the Delhi High Court, alleging that SpiceJet had failed to issue the promised convertible warrants and preference shares, and had not returned the funds.