A ten-year-old legal challenge to a now-defunct alliance involving Jet Airways (Mumbai International) selling a 24% stake in the airline to Etihad Airways (EY, Abu Dhabi International) ended quietly in an Indian court last week when the petitioner withdrew the application
In April 2013, Jet Airways flagged selling the stake to Etihad Airways for around INR26.7 billion rupees (USD325 million), and in the process create a strategic alliance which would expand the networks and reach of both airlines. BJP leader Subramanian Swamy commenced legal action to try to prevent the deal, finalised in November 2013, from happening. He argued it was against the public interest and would benefit Etihad at the expense of local carriers. The politician also called on India's Criminal Bureau of Investigation (CBI) to look at the approvals process behind the plan.
At the time, Etihad was busy acquiring strategic stakes in airlines which would funnel traffic through Abu Dhabi. This equity alliance strategy would ultimately come back to haunt Etihad, with investments made in many airlines going bad, including Jet Airways. The Indian carrier ceased operations in April 2019 and was sold during a restructuring process, with Etihad losing its stake and the USD325 million it paid for it.
“I wish to withdraw this," Swamy told Justices M R Shah and C T Ravikumar during a January 7, 2023, Supreme Court hearing, adding that the equity alliance was now over.
“The petitioner seeks permission to withdraw given subsequent developments. The petitioner stands dismissed as withdrawn," the court said before noting that Swamy could refile if there was ever any new cause for action.
Had the matter proceeded, officials from India's Ministry of Commerce, Ministry of External Affairs, Foreign Investment Promotion Board (FIPB), Department of Industrial Policy and Promotion, and the Directorate General of Civil Aviation were all due to be called to give evidence regarding their role in the initial approvals process.
