The legal entanglement between SpiceJet and Kalanithi Maran took another turn as the Delhi High Court issued a summons to SpiceJet Chairman and Managing Director Ajay Singh. This marks the third time Singh has been summoned in the case, highlighting the protracted nature of the dispute.
The legal battle, which has been ongoing since 2015, revolves around the payment of dues from an arbitral award. Kalanithi Maran, the chairman of Sun Group, alleges that SpiceJet and Ajay Singh owe him ₹440 crore in interest from the arbitral award. In response, SpiceJet asserts that it has already paid ₹100 crore following a court directive in August and owes an additional ₹194 crore. Additionally, the airline anticipates a reimbursement of ₹400 crore from Maran if its arbitration challenge proves successful.
The dispute, originally stemming from the sale of Maran and KAL Airways’ entire stake in SpiceJet to Ajay Singh in 2015, has faced numerous challenges. Singh, who acquired the stake for a nominal ₹2, also took on SpiceJet’s debt of ₹1,500 crore. In return, Maran paid ₹679 crore to SpiceJet for share warrants and preference shares that were never issued.
The legal proceedings have encountered delays, with three separate benches handling the case so far. The court recently adjourned proceedings at the request of SpiceJet’s counsel, scheduling Singh’s appearance before a new bench in February. This delay has contributed to the prolonged nature of the legal battle.
During previous hearings, SpiceJet emphasized its financial challenges, citing operational losses, negative net worth, and employee-related obligations that could potentially lead to insolvency. The airline attributed these financial difficulties to various factors, including the grounding of Boeing 737 Max aircraft, the impact of the pandemic, and increased fuel costs due to the Ukraine conflict.
SpiceJet had sought the court’s decision to be withheld until a division bench of the high court ruled on its challenge to the arbitral award. The intricacies of financial claims and the airline’s plea for a favorable arbitration challenge add complexity to the ongoing legal proceedings.
In addition to the legal battle with Maran, SpiceJet is entangled in multiple legal disputes with creditors over outstanding dues. Recent challenges include an insolvency plea filed by Alterna Aircraft BV Limited, an Irish aircraft lessor, seeking recovery of $11.1 million and £265,000 awarded by English courts.
On December 19, the Delhi High Court directed SpiceJet to pay $450,000 by January 3 to engine lessors EAM France 01 SAS and Sunbird France 02 SAS. These lessors claimed they hadn’t received payment of $12.9 million for over two years. The court also considered restraining the airline from using three engines, despite the termination of the lease.
As the legal battles persist, SpiceJet faces a complex landscape of financial challenges and legal disputes, emphasizing the intricate nature of the aviation industry. The upcoming court hearings will play a crucial role in determining the resolution of the prolonged dispute with Kalanithi Maran.
