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Kalanithi loses Rs 1,323 cr arbitration to regain SpiceJet
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SME Times News Bureau | 23 Jul, 2018
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.
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