An Indian court has ordered SpiceJet (SG, Delhi International) to pay INR3.8 billion rupees (USD46.2 million) to the former majority owner of the airline in the latest instalment of a long-running breach of contract legal battle.
Justice Yogesh Khanna of the Delhi High Court delivered the ruling on May 29 after the petitioner, Kalanithi Maran, chairman of the Sun Group and former majority owner of SpiceJet, sought enforcement of earlier court orders to settle outstanding interest payments on a debt.
In 2015, the current majority owner of SpiceJet, Ajay Singh, paid Maran INR2 (USD0.024) in cash for his entire 58.46% stake in the airline. But the deal also included a significant capital injection from Maran in exchange for stock warrants and convertible redeemable preference shares from SpiceJet. However, these were never delivered. Maran launched legal action, seeking INR1.323 billion (USD160.7 million) for restitution and damages. In its 2018 ruling, an arbitration tribunal in New Delhi found in Maran's favour, albeit tempering his multi-billion rupee claim. The tribunal awarded Maran INR5.78 billion (USD70.2 million), which SpiceJet eventually paid.
The current legal case revolves around interest payable on the original debt to Maran. SpiceJet has variously disputed and ignored interest payment orders. The interest owed stood at INR2.42 billion (USD29.4 million) in October 2020, growing to INR3.62 billion (USD44 million) in February 2023, and INR3.8 billion (USD46.1 million) in May. In mid-February, Delhi's Supreme Court ordered the interest liability be reduced by at least INR750 million (USD9.1 million) within three months. However, this did not occur, resulting in this week's hearing in the Supreme Court.
"Since the judgment debtor had failed to pay an amount of INR750 million to (the) decree-holder, hence in terms of para 15(ii) of the order dated 13.02.2023 of the Hon'ble Supreme Court, there is no other alternative except to call upon the judgment debtors to deposit the entire outstanding amount qua interest forthwith, thus is so directed," read this week's ruling.
In addition to ordering full payment of the entire INR3.8 billion claimed, the court gave SpiceJet four weeks to file an affidavit detailing its assets. SpiceJet says it is in talks with Maran's representatives to settle the dispute. "We are confident of resolving the same mutually," a spokesperson told India-based outlets. The court has listed the matter for mention on September 5, 2023.
