Today, On 16th May, The Delhi High Court approved SpiceJet’s appeal, nullifying a previous order that required the airline to refund Rs. 270 crore to Kalanithi Maran of the Sun Group. This ruling overturns the directive for SpiceJet to return the amount related to a share transfer dispute. The decision marks a significant legal win for SpiceJet in its long-standing financial conflict with Maran.
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New Delhi: The Division Bench of the Delhi High Court granted an appeal filed by SpiceJet and its Chairman and Managing Director (CMD), Ajay Singh. The appeal challenges a previous order issued by a single bench, which directed SpiceJet to refund an amount exceeding Rs 270 crore to Kalanithi Maran, promoter of Sun Group, and Kal Airways.
The Division Bench, consisting of Justice Yashwant Varma and Justice Ravinder Dudeja, overturned the single bench order that issued in July of last year. The Division Bench also upheld the Arbitral Award dated July 20, 2018, which passed by an Arbitral Tribunal comprising of three retired Supreme Court Judges.
The Court ordered,
“The appeal stands allowed. Consequently, the July 31, 2023 order is set aside.”
SpiceJet and its Chairman and Managing Director (CMD), Ajay Singh, filed an appeal before the Division bench of the Delhi High Court to challenge the order of a single judge. The judge directed SpiceJet to refund over Rs 270 crore to Kalanithi Maran and Kal Airways, the promoters of Sun Group. The judgment pronounced on July 31 of the previous year by a bench presided over by Justice Chandra Dhari Singh. The judgment affirmed an Arbitral Award dated July 20, 2018, which issued by an Arbitral Tribunal comprising three retired Supreme Court Judges.
On July 31, 2023, Justice Chandra Dhari Singh ruled that SpiceJet must return the funds to Maran, stating that the airline had not demonstrated any legal errors in the tribunal’s decision.
The Court explained,
“The impugned Award does not indicate any overt illegality, nor do its conclusions appear perverse or shockingly unconscionable. The petitioners have not successfully shown that the Arbitral Award is blatantly illegal, contrary to the public policy of India, or the fundamental policy of law, thereby failing to establish grounds for its annulment,”
According to the Arbitral Award, Kal Airways and Kalanithi Maran, as Decree Holders, entitled to a refund of Rs 308 crore for warrants and a refund of Rs 270 crore for Cumulative Redeemable Preference Shares (CRPS). The Arbitral Award also granted an interest rate of 12 percent for Pendente lite and an interest rate of 18 percent from the last due date, in case SpiceJet and Ajay Singh fail to make the directed payments within two months of the award’s date.
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SpiceJet and Ajay Singh had filed Section 34 Petitions to challenge and set aside the Arbitral Award, specifically regarding the refund of Rs 270 crore to Kal Airways and Kalanithi Maran. They also sought to waive the 12 percent interest on warrants and set aside the 18 percent interest granted on both warrants and CRPS.
On the other hand, Kal Airways and Kalanithi Maran also filed a Section 34 Petition seeking to set aside the award to the extent that no interest was granted on the amount of Rs 270 crore. They also claimed damages for the non-issuance of warrants and CRPS.
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