A Division Bench of the Delhi High Court set aside a single-judge’s order directing SpiceJet to refund over ₹270 crore to Sun Group promoter Kalanithi Maran.
The Division Bench of Delhi High Court, comprising Justices Yashwant Varma and Ravinder Dudeja, allowed the appeal filed by SpiceJet and its Chairman and Managing Director Ajay Singh against the previous order.
“Appeal stands allowed. Consequently July 31, 2023 order is set aside,” the Delhi High Court ordered. Earlier, the Delhi High Court Division Bench had denied SpiceJet’s request for a stay on the single-judge order that upheld an arbitral tribunal’s decision directing the airline to refund over ₹270 crore to Maran.
The dispute dates back to January 2015, when Ajay Singh, who had previously owned SpiceJet, repurchased the airline from Maran. Maran had transferred his 58.46% stake in SpiceJet to Singh. According to the agreement, Maran was supposed to receive redeemable warrants in return for his investment as a promoter of the airline, amounting to 18 crore warrants, which would translate to a 26% shareholding in SpiceJet.
Maran argued that he neither received the convertible warrants nor the preference shares, nor did he receive any money. He claimed to have suffered damages of nearly ₹1,323 crore and sought arbitration following a referral from the Delhi High Court.
In July 2018, the arbitral tribunal ordered SpiceJet to refund ₹270 crore to Maran, along with interest of 12% per annum on the amounts paid towards warrants and 18% per annum on the sums awarded to Maran if not paid on time. However, the tribunal found no breach of the share sale and purchase agreement between Maran, SpiceJet, and Ajay Singh, thus rejecting Maran’s demands for restitution of his shareholding and his claim for damages.
Subsequently, Maran, his company KAL Airways, SpiceJet, and Ajay Singh filed petitions before the High Court against the arbitral tribunal’s order. On July 31, 2023, Justice Chandra Dhari Singh ordered SpiceJet to refund the money to Maran, ruling that the low-cost carrier failed to prove any illegality in the tribunal’s order.
“There is nothing in the impugned Award to suggest that it suffers from patent illegality and the findings therein are perverse and will shock the conscience of this Court. In the instant case, the petitioners have not been able to prove that the impugned Arbitral Award is patently illegal, against public policy of India or fundamental policy of law and thus have failed to make out a case for the award to be set aside,” the Court stated.
Justice Singh also dismissed Maran’s plea against the arbitral tribunal’s rejection of his demands for the restitution of his 58.46% shareholding in SpiceJet and his claim for damages.
SpiceJet then filed an appeal before the Division Bench, which has now been allowed, setting aside the single-judge order.
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