Supreme Court Denies Stay on ₹144.5 Crore Deposit Order Against SpiceJet, Imposes ₹1 Lakh in Costs

SpiceJet Fined ₹1 Lakh, Must Deposit ₹144.51 Crore in Arbitration Dispute

On Friday, the Supreme Court refused to stay a Delhi High Court order directing SpiceJet and its promoter Ajay Singh to deposit ₹144.51 crore in its long-running arbitration dispute with KAL Airways Pvt. Ltd and Kalanithi Maran. The court also imposed a cost of ₹1 lakh for prolonging the litigation.

The Delhi High Court had on 19 January directed SpiceJet to deposit the amount within six weeks. The court noted that SpiceJet had admitted ₹194.51 crore was due and payable under earlier Supreme Court directions, with ₹144.51 crore remaining outstanding after adjusting ₹50 crore already deposited. The Delhi High Court had rejected SpiceJet's contention that enforcement should await the final outcome of its challenges to the arbitral award.

Origins of the Dispute

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The dispute dates back to January 2015, when Kalanithi Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh under a share sale and purchase agreement. As part of the arrangement, Maran and KAL Airways infused approximately ₹679 crore into the airline towards issuance of convertible warrants and preference shares. Maran later alleged that these instruments were not issued under the new management and sought a refund.

Arbitration and Enforcement Proceedings

The matter was referred to arbitration under a three-member tribunal comprising retired Supreme Court judges. In July 2018, the tribunal rejected Maran's ₹1,323 crore damages claim but directed SpiceJet to refund ₹579 crore, along with interest, relating to the warrants and preference shares. Both sides challenged aspects of the award before the Delhi High Court under the Arbitration and Conciliation Act, triggering a prolonged phase of enforcement petitions, appeals, and interim orders.

Financial Impact on SpiceJet

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The dispute has remained a significant legal and financial overhang for SpiceJet, which has in recent years faced liquidity pressures, aircraft groundings due to unpaid dues, and insolvency petitions from certain lessors and creditors.