SpiceJet's Sharp Response After KAL Airways Seeks Rs 1,323 Crore In Damages

In an escalation of the ongoing dispute, SpiceJet today said the claims made by KAL Airways and Kalanithi Maran for more than Rs 1,323 crore in damages are baseless and legally untenable.

On Monday, KAL Airways and Kalanithi Maran said they will seek more than Rs 1,323 core in damages from SpiceJet and its chief Ajay Singh as well as challenge the recent Delhi High Court order in the ongoing dispute between the two sides.

In a regulatory filing, SpiceJet said it strongly refutes the claims made by KAL Airways and Mr Maran regarding seeking damages of Rs 1,323 crore.

"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," the airline said in the filing on Tuesday.

According to the carrier, KAL Airways and Mr Maran initially sought damages of more than Rs 1,300 crore during the arbitration proceedings.

"This claim was thoroughly examined and subsequently rejected by a panel of three retired Supreme Court judges. 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," it said.

SpiceJet also said the two parties chose not to pursue any appeal before the appellate jurisdiction and consequently, the matter attained finality.

On May 17, a division bench of the court set aside a single judge bench order that had upheld an arbitral award asking SpiceJet and its promoter Ajay Singh to refund Rs 579 crore plus interest to Mr Maran.

The bench allowed the appeals filed by Singh and SpiceJet challenging the single judge's order, passed on July 31, 2023 and remanded the matter back to the court concerned to consider the petitions challenging the arbitral award afresh.

Against this backdrop, Mr Maran and his firm KAL Airways decided to challenge the ruling after consultation with their legal counsel.

The decree holders -- KAL Airways and Mr Maran -- "believe that the aforesaid judgement is deeply flawed and warrants further scrutiny".

"In parallel, they are also seeking damages in excess of Rs 1,323 crore, as determined by FTI Consulting LLP, United Kingdom, a globally renowned firm that specialises in the estimation of losses arising out of breach of contractual commitments," KAL Airways said in a statement on Monday.

Meanwhile, SpiceJet on Tuesday also said that following the court ruling, it will now pursue a refund of Rs 450 crore.

The case dates back to early 2015, when Singh, who owned the airline earlier, bought it back from Mr Maran after it was grounded for months due to resource crunch.

As part of the agreement, Mr Maran and KAL Airways had claimed to have paid SpiceJet Rs 679 crore for issuing warrants and preference shares.

However, Mr Maran approached the Delhi High Court in 2017, alleging SpiceJet had not issued convertible warrants and preference shares nor returned the money.

On Tuesday, shares of SpiceJet declined 1.68 per cent to Rs 57.29 apiece in afternoon trade on the BSE.
 

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