'There’s no question of amicable settlement with SpiceJet,' says Sun Group

Media conglomerate Sun Group on Monday said that it has rejected any chance of reaching a mutually agreed settlement in the arbitration case against the low-cost airliner SpiceJet.

The dispute dates back seven years and revolves around a disagreement over share transfers involving SpiceJet's Chairman and Managing Director, Ajay Singh, and Kalanithi Maran, along with his company KAL Airways.

Sun Group said that they expect SpiceJet to comply with the Supreme Court's order to pay them an interest amount of Rs 386 crore.

SpiceJet said the final amount to be paid by either side will be determined by Delhi High Court.

"The payment of Rs 380 crore as directed to be paid by the Supreme Court in the matter relating to Mr. Kalanithi Maran and his firm KAL Airways is only a security deposit amount arising from execution proceedings. The final amount to be paid by either side will be determined by the High Court of Delhi in the proceeding pending under Section 34 of the Arbitration Act. Orders in this petition have been reserved on 18 April, 2023 and are awaited.

"We would also like to clarify that SpiceJet had in May 2023 approached the Supreme Court seeking an extension for paying Rs 75 crore but the matter was only listed on July 7. The Hon’ble Courts’ proceedings and orders are held in the highest esteem by the Company.

In the larger interest, we remain committed to finding an amicable settlement in this matter," said SpiceJet in a statement.

Last week, the Supreme Court directed SpiceJet to pay the entire arbitral amount of Rs 380 crore to its former promoter, Kalanithi Maran. The apex court emphasised the need for conducting business with "commercial morality."

Despite arguments put forth by senior advocate Mukul Rohatgi, representing SpiceJet, the Supreme Court refused to extend the deadline, noting that the entire award has now become enforceable.

"The battery of lawyers is involved in all this and you know, the idea is just to delay complying with the orders of the court. I personally will not approve this... The writ of the court has to be complied with and now, they (the Delhi High Court) will execute the award," the CJI said.

In June, the Delhi High Court ordered SpiceJet to pay Rs 380 crore to Maran and directed the airline to provide details of its assets within four weeks.

Earlier, in February, the Supreme Court directed SpiceJet to pay Rs 75 crore in interest dues within three months, against Maran's claim of Rs 362.49 crore, under the 2018 arbitration award.

SpiceJet has stated that the remaining amount of Rs 270 crore is reserved with the company in cash, for which a bank guarantee has been provided. The airline intends to discharge this amount as per the Supreme Court's direction. Additionally, the airline committed to paying the additional Rs 75 crore within the prescribed three-month period.

The dispute originated in 2015 when Maran and KAL Airways transferred their 58.46 per cent stake in SpiceJet to Ajay Singh. In 2017, Maran and KAL Airways approached the Delhi High Court, seeking the transfer of 180 million warrants redeemable as equity shares.

The high court had previously instructed SpiceJet and Singh to deposit Rs 578 crore under the 2018 arbitration award related to the share-transfer dispute. SpiceJet was allowed to furnish a bank guarantee of Rs 329 crore and make a cash deposit for the remaining sum.

SpiceJet appealed against the high court's order, and the Supreme Court subsequently stayed the execution of the high court order.

In July 2017, the apex court dismissed SpiceJet's appeal, upholding the high court order. In July 2018, the arbitral tribunal rejected Maran's claim for damages but awarded him a refund of Rs 578 crore plus interest.

Maran, owner of Sun TV Network, then challenged the arbitration award in the high court.

The dispute centers around the non-issuance of warrants to Maran after Singh regained control of SpiceJet in February 2015, during a time when the airline faced financial difficulties.

Following the share transfer, Maran and KAL Airways held no equity shares in SpiceJet, and Singh acquired a controlling 58.46 per cent stake for a nominal sum of Rs 2.

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