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Delhi High Court's Verdict: SpiceJet to Pay ₹579 Crore to Marans as Arbitration Award Stands

The Delhi High Court has upheld the 2018 arbitration decision of a three-member panel, ruling in favor of former SpiceJet promoter Kalanithi Maran. The court has ordered SpiceJet, owned by Ajay Singh, to reimburse ₹579 crore along with accrued interest. This verdict settles a long-standing dispute between the two parties and paves the way for the enforcement of the award.

The legal battle began in 2015 when Kalanithi Maran and KAL Airways transferred their entire 58.46% stake in SpiceJet to Ajay Singh for a nominal sum of ₹2. However, Maran did not receive the promised warrants after the ownership transfer, prompting him to approach the Delhi High Court in 2016. The court intervened and restrained Singh from transferring or issuing SpiceJet shares. Instead, the court directed both parties to convene an arbitral tribunal to resolve the matter.

In 2018, the arbitral tribunal ruled in favor of Maran, awarding him ₹579 crore along with interest. Despite the court's order, SpiceJet challenged the arbitral award in the High Court in 2018, leading to further legal proceedings. In 2020, the High Court ordered SpiceJet to pay an additional ₹243 crore as interest payment. Furthermore, Maran sought the court's help in attaching Singh's shares for non-compliance with the payment.

The Supreme Court also got involved in the matter and directed the encashment of SpiceJet's bank guarantee worth ₹270 crore, to be paid to Maran and Kal Airways as part of the arbitral award. The Apex Court ordered SpiceJet to pay ₹75 crore within three months as interest. However, on 7th July, the Supreme Court denied any further extensions to SpiceJet and criticized the airline for engaging in "luxury litigation."

The recent verdict by the Delhi High Court upholds the earlier arbitration award in favor of Marans, reaffirming their claim over ₹579 crore. The court also dismissed SpiceJet's plea for an interest waiver and rejected Ajay Singh's challenge against the award. With this decision, SpiceJet is now legally bound to reimburse the amount along with accrued interest.

Despite the court's ruling, execution proceedings against the award are still pending before another bench of the Delhi High Court. The hearing for the execution is scheduled for 5th September. In a previous order, the High Court had directed Ajay Singh to appear in person on the same date and instructed SpiceJet to disclose all its assets related to the payment applications filed by Kal Airways.

The legal battle has been ongoing for years, with both sides presenting their arguments before the court. The case has garnered attention due to its high-stakes nature and the involvement of prominent figures in the aviation industry. However, the recent ruling by the Delhi High Court indicates that the matter is nearing its conclusion, and Kalanithi Maran is likely to receive the awarded amount along with interest.

It remains to be seen how SpiceJet will comply with the court's order and whether they will further contest the decision. As the execution proceedings continue, all eyes will be on the high-stakes legal drama to see how it unfolds.