New Delhi, July 22 (IANS) An arbitration tribunal has rejected the claim of former Spicejet owner Kalanithi Maran and his company Kal Airways for Rs 1,323-crore as damages from Spicejet.
In a stock exchange filing on Saturday, Spicejet said that the tribunal constituted by the Delhi High Court in 2016 rejected Maran’s claim to damages of Rs 1,323 crore for not issuing warrants to him and KAL Airways, but awarded him a refund of Rs 579 crore with interest.
The tribunal, comprising retired Supreme Court Judges Arijit Pasayat, Hemant Laxman Gokhale and K.S.P. Radhakrishnan ruled on Friday that there was no breach of a share sale and purchase agreement reached between Maran and the current Spicejet promoter Ajay Singh in January 2015.
The tribunal upheld SpiceJet’s defence that it failed to issue the relevant convertible warrants and preference shares due to lack of approval from the authorities concerned.
“The tribunal has held that there was no breach by the company (Spicejet) in pursuing the approval from relevant authority and since the same was not received for reasons not
attributable to the company, it cannot be held to be in breach or be
made liable for damages,” the filing said.
“The tribunal has, however, held that since the warrants/shares cannot be issued any longer, the amount of about Rs 308 crore earlier received by the company as advance towards subscription of warrants is to be refunded to the claimants along with interest of 12 per cent per annum for a period of 30 months.
“Accordingly, no further warrants/shares are required to be issued by the company
to the claimants,” it added.
Following a severe cash crunch suffered by Spicejet in 2015, Maran and his KAL Airways, transferred their 58.46 per cent share in SpiceJet for Rs 2 to Singh, who, as a co-founder of the low-cost carrier, assumed its liabilities.
As part of the agreement, Maran and KAL Airways said they paid SpiceJet Rs 679 crore for issuing warrants and preference shares.
Maran filed a case in the Delhi High Court against Singh and SpiceJet after he said that neither convertible warrants and preference shares were issued nor his money refunded.
The warrants, if converted into equity, would have given Maran and KAL Airways ownership of 24 per cent stake in Spicejet.
“The company will like to clarify that the aggregate principal amount payable,
including the amount of Rs 270 crore towards CRPS (if and when the same becomes
payable) has already been deposited by the company with the Registrar General of the Delhi High Court in September 2017,” Spicejet said.
Singh and his family currently hold 60.25 per cent in SpiceJet.