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SpiceJet announced on Wednesday that it would demand a refund of ₹450 crore out of the ₹730 crore previously paid to former promoter Kalanithi Maran and his firm, KAL Airways, following a Delhi High Court order.
However, Kal Airways has rejected the same, stating that the Division Bench’s award remained in favour of Kal Airways and Kalanidhi Maran.
The Delhi High Court’s Division Bench on May 17 set aside a single judge bench’s order that had upheld an arbitral award requiring SpiceJet and its promoter Ajay Singh to refund ₹580 crore plus ₹150 crore interest to Maran.
The Division Bench allowed the appeals filed by Singh and SpiceJet challenging the single judge’s order passed on July 31, 2023, and directed the matter to be referred back to the single judge of the Delhi High Court for being considered afresh and bearing in mind the observations made in the ruling.
In its ruling, the Division Bench noted that the Single Judge had dismissed Ajay Singh and SpiceJet’s Section 34 petitions without adequately considering the claims of patent illegality and the order of refund issued against SpiceJet despite admitted breaches on the part of KAL Airways and Kalanithi Maran. The Court also highlighted that penal interest was charged to SpiceJet despite no breach of the share purchase agreement.
Against this backdrop, SpiceJet stated in a regulatory filing that it would seek a refund of ₹450 crore out of the ₹730 crore paid to Maran and KAL Airways.
However, Kal Airways clarified that the Division Bench of the High Court has not opined that the Award is wrong per se.
It is important to note that the Division Bench has focused solely on reviewing the correctness of the Single Judge’s decision and has not rendered any decision on the Arbitral Award dated May 20, 2018, highlighting that there is currently no stay on the execution of the Award. In other words, the award given by the panel of arbitrators continues to operate as a decree, according to a statement from Kal Airways.
The Division Bench did not make any observations or findings regarding the refund of money already paid to the Decree Holders (KAL Airways P Ltd and Kalanithi Maran) by SpiceJet Ltd.
Hence, any claim seeking a return of money already paid to Kal Airways and Maran under the directions of the Supreme Court and High Court does not arise. KAL Airways and Maran will diligently and vigorously pursue the execution of the Arbitral Award, seeking a refund of the pending dues amounting to ₹353.50 crore, the statement added.
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