Kalanithi Maran, KAL Airways to seek over Rs 1,323 crore in damages from SpiceJet, Ajay Singh

KAL Airways and Kalanithi Maran have announced that they will seek more than Rs 1,323 crore in damages from SpiceJet and its chief Ajay Singh, while also challenging the recent Delhi High Court order in their ongoing dispute.

On May 17, a division bench of the court overturned a single judge bench's decision, which had upheld an arbitral award requiring SpiceJet and Singh to refund Rs 579 crore plus interest to Maran.

However, the court sent it back to the single judge to rehear the case against, according to the two-judge bench the single judge had not passed a reasoned order. The court made it clear that any observations in the judgment on the merits of the case need to be disregarded. As a result of this judgment, the litigation is likely to be prolonged.

In response, Maran and his firm KAL Airways decided to challenge the ruling after consultation with their legal counsel. 

The decree holders, KAL Airways and Maran stated that they "believe that the aforesaid judgement is deeply flawed and warrants further scrutiny." Additionally, they are seeking over Rs 1,323 crore in damages, as assessed by FTI Consulting LLP, a UK-based firm known for evaluating losses from contractual breaches.

"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 May 27.

Additionally, it said the claim for damages had originally been presented by KAL Airways and Maran before the arbitral tribunal and ”has always remained an integral part of their quest for justice”.

Maran and KAL Airways are also seeking the execution of the arbitral award to secure a refund of Rs 353.50 crore in pending dues.

This action is "in full compliance with, and supported by, the orders dated February 13, 2023, and July 7, 2023, passed by the Hon'ble Supreme Court directing that the award in favour of the decree holders is executed in its entirety."

On May 22, SpiceJet announced its intention to seek a refund of Rs 450 crore out of the Rs 730 crore paid to Maran and KAL Airways, following the Delhi High Court ruling.

The dispute dates back to early 2015, when Singh, the airline's former owner, repurchased it from Maran after it was grounded due to financial difficulties.

Maran and KAL Airways claimed to have paid SpiceJet Rs 679 crore for issuing warrants and preference shares, but Maran approached the Delhi High Court in 2017, alleging that SpiceJet neither issued the convertible warrants and preference shares nor returned the money.

(With inputs from PTI)