The Supreme Court on Friday (February 27) dismissed a petition from SpiceJet and its chairman, Ajay Singh to stay a Delhi High Court ruling that mandates the airline and Singh to deposit Rs 144.51 crore in a protracted arbitration case involving KAL Airways and Kalanithi Maran.
A bench of Justices P.S. Narasimha and Alok Aradhe declined to interfere with the high court’s 19 January order and criticised the airline over repeated rounds of litigation in the matter.
Setback for Procedural Delays
“SpiceJet has taken note of the order passed by the Supreme Court of India, which declined to interfere with the earlier direction to deposit Rs 144 crore. The company is examining the order and will comply with all court directions. SpiceJet would like to assure all stakeholders that this development has no impact on its day-to-day operations,” the airline said in a statement.
The airline also said that it is confident that as the legal process unfolds, it could potentially secure a refund of Rs 449 crore.
SpiceJet added that it has so far paid a total of Rs 730 crore to Kalanithi Maran and KAL Airways, including the entire principal amount of Rs 580 crore and Rs 150 crore towards interest.
“The remaining amount, as directed by the court, will be deposited in court in accordance with the arbitration process,” the airline added.
The carrier also said that KAL Airways and Kalanithi Maran’s claims for damages exceeding Rs 1,300 crore have been dismissed, and these decisions are now final.
Additionally, all challenges to the arbitral award made by KAL Airways and Kalanithi Maran have been rejected. Meanwhile, SpiceJet’s case seeking a refund of payments made to KAL Airways and Kalanithi Maran is currently under consideration by the Delhi High Court.
“Preliminary findings from the Court appear to favour SpiceJet,” the airline said.
Today’s ruling has added another layer to a corporate dispute that has persisted for over a decade, with roots tracing back to the near-collapse of SpiceJet during the 2014-15 period and the subsequent emergency financial restructuring that followed. Additionally, the court has imposed a cost of Rs 1 lakh to discourage further delays in the litigation.
From ₹2 Shares to Multicrore Disputes
In 2015, faced with the imminent threat of operational shutdown due to its financial distress, SpiceJet entered into a Share Sale and Purchase Agreement (SSPA) in January 2015. Under this agreement, Maran and Kal Airways consented to sell their entire shareholding to Ajay Singh for a nominal price of Rs 2.
The deal was part of a larger financial support strategy, which included the issuance of warrants and cumulative redeemable preference shares (CRPS), along with a total funding commitment of approximately Rs 450 crore. However, disputes later arose regarding the fulfilment of reciprocal obligations outlined in the SSPA, ultimately leading to arbitration proceedings.
The dispute has remained a significant legal and financial overhang for SpiceJet, which in recent years has faced liquidity pressures, aircraft groundings over unpaid dues, and insolvency petitions from certain lessors and creditors.