The Delhi High Court Monday refused to interfere with an arbitral award asking Spicejet promoter Ajay Singh to refund Rs 579 crore plus interest to media baron Kalanidhi Maran.
The high court upheld the award passed by the arbitration tribunal on July 20, 2018 in favour of Maran and his company Kal Airways.
“There is nothing in the impugned award to suggest that it suffers from patent illegality and the findings therein are perverse and will shock the conscience of this court.
“In the instant case, the petitioners have not been able to prove that the impugned arbitral award is patently illegal, against public policy of India or fundamental policy of law and thus have failed to make out a case for the award to be set aside,” Justice Chandra Dhari Singh said in an 82-page judgement.
Ajay Singh had approached the high court challenging the arbitral award.
In relief to Ajay Singh the tribunal had, however, rejected Maran’s appeal for damages of Rs 1,323 crore from the Gurugram-based carrier.
The high court said the petitioners have failed to substantiate the grounds for setting aside the arbitral award and dismissed the two petitions by Spicejet and Ajay Singh.
“After consideration of the entirety of the matter this court does not find any cogent reason to interfere in the impugned award dated July 20, 2018 passed by the arbitral tribunal in the arbitration proceedings initiated between the parties before this court,” it said.
Justice Singh said this court is barred from entering into the merits of an award unless there is an error that is apparent on the face of the record or an illegality that goes to the root of the matter.
“As per the mandate of law, settled by the Supreme Court, this court shall also not look into the merits of the reasoning and findings given by the arbitral tribunal, as long as there are reasoned findings given by the tribunal while passing the award, which is clearly the case in the instant matter,” the high court said.
Maran and Kal Airways were represented by law firm Karanjawala and company.
The case dates to January 2015, when Singh, who owned the airline earlier, bought it back from Maran after it was grounded for months due to resource crunch.
While the tribunal had asked Maran to pay Singh and the airline Rs 29 crore in penal interest, Singh was asked to refund Rs 579 crore plus interest to Maran.
The tribunal, created in 2016 end on the orders of the Delhi High Court to adjudicate the share transfer dispute, had held that there was no breach of a share sale and purchase agreement reached between Maran and current promoter Ajay Singh in late January 2015.
In February 2015, Maran of the Sun Network and Kal Airways, his investment vehicle, had transferred their 58.46 per cent stake in SpiceJet to Singh for Rs 2 along with Rs 1,500 crore debt liability after the airline was grounded due to a severe cash crunch. Singh was the first co-founder of the airline and now the chairman and managing director.
As part of the agreement, Maran and Kal Airways had claimed to have paid Spicejet Rs 679 crore for issuing warrants and preference shares. However, Maran approached the Delhi high court in 2017, alleging SpiceJet had not issued convertible warrants and preference shares nor returned the money.