SpiceJet Defends Against Renewed Damages Claims from Former Promoter Maran and KAL Airways
In the ongoing legal battle with former promoter Kalanithi Maran and KAL Airways, SpiceJet has vehemently refuted a damages claim amounting to INR 13.23 billion (approximately USD 158.9 million). The budget airline’s response comes after Maran and KAL Airways announced on May 27 their intention to revive the substantial damages claim stemming from a contentious 2015 ownership transfer deal.
The disputed deal, which saw the control of SpiceJet shift from Maran to the current promoter and managing director, Ajay Singh, involved a financial arrangement where Maran and KAL Airways were to infuse INR 6.79 billion (USD 81.5 million) into the then struggling airline. In return, they were to receive warrants and preference shares from SpiceJet, which Maran claims were never issued.
The legal contention began in 2017 and reached a critical point in August 2023 when the Delhi High Court upheld a 2018 arbitration ruling that ordered SpiceJet to pay INR 5.79 billion (USD 69.5 million), covering the undelivered warrants and preference shares, plus interest. Despite SpiceJet’s compliance with this order through partial payments and bank guarantees, disagreements over the interest rates—set at 12% annually, increasing to 18% under certain conditions—persisted.
On May 17, 2024, the dispute took a new turn as the division bench of the Delhi High Court overturned the 2023 order and returned the case to a single-judge bench for further review. Maran and KAL Airways quickly declared their intention to appeal this decision, criticizing it as “deeply flawed” and vowing to continue their pursuit of justice, including the reinstatement of their multi-billion damages claim.
SpiceJet, in a press release dated May 28, described the revived damages claim as “not only legally untenable but also a regurgitation of previously rejected claims by the Arbitral Tribunal and then the Delhi High Court.” The airline argues that the damages claim was exhaustively reviewed and dismissed by a panel of three retired Supreme Court judges, with subsequent appeals to the Delhi High Court also being rejected.
The airline accuses Maran and KAL of failing to pursue further legal avenues at the appellate level, suggesting that the matter had been conclusively resolved until the recent developments. SpiceJet’s statement also hints at pursuing a refund of INR 4.5 billion (USD 54 million) following its recent legal victories, indicating an aggressive stance in this protracted legal fray.
This ongoing legal battle not only highlights the complexities of corporate ownership and financial agreements in the aviation sector but also underscores the enduring tensions between major stakeholders in high-stakes business disputes.