SpiceJet refutes KAL Airways’ and Kalanithi Maran’s Rs 1,323 crore damage claim.

May 2024 — In an ongoing court battle, SpiceJet has rejected KAL Airways and Kalanithi Maran’s demand for Rs 1,323 crore in damages, saying the charges are “legally untenable.” This statement follows KAL Airways and Maran’s announcement on Monday that they want to seek damages and fight a recent Delhi High Court decision.

The issue began in February 2015, when Maran and KAL Airways transferred their 58.46 percent interest in SpiceJet to Ajay Singh, who also acquired the airline’s liabilities of around Rs 1,500 crore. Maran and KAL Airways claimed they paid Rs 679 crore for the issuance of warrants and preference shares, which they claim were never allotted, causing them to file arbitration procedures against SpiceJet and Singh.

In July 2018, an arbitration panel made up of three retired Supreme Court justices rejected Maran’s claim for Rs 1,323 crore in damages but awarded him a return of Rs 579 crore plus interest. This verdict was later confirmed by a single-judge bench of the Delhi High Court, but the division bench set it aside on May 17, 2024.

SpiceJet noted that Maran and KAL Airways’ current demands are simply a repeat of previously denied allegations. “These assertions are not only legally untenable but also a regurgitation of previously rejected claims by the arbitral tribunal and then the Delhi High Court,” SpiceJet stated in a statement.

The airline accused KAL Airways and Maran of attempting to sensationalize the situation and misinform the public. SpiceJet noted that the damages requested by Maran and KAL Airways were thoroughly reviewed and rejected throughout the arbitration procedures. “Following this, KAL Airways and Kalanithi Maran appealed to the single-judge bench of the Delhi High Court, seeking the same amount in damages, which was again rejected by the court,” said the statement.

KAL Airways and Maran have stated their intention to appeal the Delhi High Court’s recent verdict to the Supreme Court. They also want to seek damages based on an assessment by FTI Consulting LLP, which they claim supports their losses as a result of SpiceJet’s alleged breach of contractual obligations.

In response, SpiceJet stated that it intends to seek a refund of Rs 450 crore from the Rs 730 crore paid to Maran and KAL Airways. “Following the success before the division bench of the Delhi High Court, SpiceJet will now pursue a refund of Rs 450 crore as outlined in our previous statement,” said a spokeswoman for the airline.

On Tuesday morning, SpiceJet’s stock was trading at Rs 57.64 on the National Stock Exchange, down 1.08 percent.

The dispute between the two parties highlights the intricacies of corporate transactions and the lengthy legal battles that can occur when agreements are challenged. The following steps in this high-profile lawsuit will be closely followed by both industry observers and legal specialists.