India’s low-cost airline SpiceJet has offered to pay Rs 600 crore to settle the dispute with its former owner Kalanithi Maran and KAL Airways. Supreme Court, at which is the case is currently in progress, advised Maran to consider SpiceJet’s proposal and listed the case for the hearing on February 14, 2022.
“SpiceJet has offered to pay Rs 600 crore in cash in the share transfer case with its former promoter Kalanithi Maran and his firm KAL Airways for a full and final settlement of all disputes,” the airline said in a statement issued to the media after Supreme Court hearing.
“Out of the principal amount of Rs 578 crore awarded in arbitration, SpiceJet has already paid Rs 308 crore in cash and deposited a bank guarantee of Rs.270 crore," SpiceJet said in a statement released. The airline also agreed to convert the bank guarantee to cash and pay an additional Rs 22 crore to Maran.
The impact of the settlement offer was seen in the shares of SpiceJet, which jumped 5.6% in a day.
SpiceJet vs Kalanithi Maran/KAL Airways
The dispute has a long history dating back to 2015 when Ajay Singh took over the shares of SpiceJet. Maran and his company KAL Airways transferred 350.4 million shares, amounting to 58.46% of stake to Singh. In return, Maran was supposed to receive redeemable warrants of Rs 690 crores he invested in the airline.
The case was put to an arbitration tribunal in 2016 after a verdict from Delhi High Court. In 2018, the arbitration tribunal ordered SpiceJet to pay Rs 579 crores along with interest to Kalanithi Maran. Maran also had to pay Rs 29 crore to SpiceJet and Singh. Delhi High Court enforced the said verdict of the arbitrational tribunal in September 2020, during which it asked the airline to pay Rs 243 crore for securing the interest. SpiceJet approached Supreme Court against the verdict by pointing out that it had paid Rs 308 crore and submitted a bank guarantee of Rs 275 crore with the Delhi High Court. SpiceJet appealed against Delhi High Court’s order to pay Rs 243 crores as interest at Supreme Court.
Supreme Court heard the proceedings to vacate the stay, during which SpiceJet offered to pay Rs 600 crores to Maran. A senior advocate Mukul Rohatgi, assisted by Karanjawala and Co., appeared for SpiceJet. Another senior lawyer Maninder Singh represented Maran and KAL Airways. A bench comprising Chief Justice N V Ramana and justices A S Bopanna and Hima Kohli attended the hearing of SpiceJet.
