Kalanithi Maran Loses Legal Battle to SpiceJet

India's Supreme Court rejected Kalanithi Maran and KAL Airways' appeal to overturn an arbitral award in a dispute with SpiceJet. The original high court judge's reasoning was criticized as "atrocious."

By Priyal Dutta 31 Jul 2024 in Airline

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The case will now be reheard by a different judge at the Delhi High Court on a date yet to be determined

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SpiceJet Secures Legal Win

India's Supreme Court has rejected an appeal by Kalanithi Maran and his KAL Airways investment vehicle against a Delhi High Court decision to set aside an arbitral award in a long-running dispute with SpiceJet. In a hearing on July 26, a three-judge Supreme Court panel criticized the reasoning of the original high court judge who upheld the arbitral award as "atrocious."

Kalanithi Maran is the chairman and founder of Sun Group, one of India's largest media conglomerates, and held a major share in SpiceJet from 2010 to 2015

Maran, a former SpiceJet promoter, and KAL sought to appeal a May 2024 high court bench ruling that overturned an earlier decision to uphold an INR 5.79 billion (USD 69.2 million) award to them in a dispute dating back to the 2015 SpiceJet ownership transfer from Maran to the present majority shareholder and promoter, Ajay Singh.

SpiceJet will now be seeking a refund of INR 4.5 billion (USD 53.7 million)

In a series of legal developments, a single judge ruling in July 2023 on the Delhi High Court upheld a 2018 arbitral award primarily in Maran and KAL's favour. Singh and SpiceJet appealed this to the court's division bench, citing s.34 of India's Arbitration and Conciliation Act (1996) and arguing that the July ruling lacked "adequate reasoning." In its May 2024 decision, the two-judge bench sided with Singh and SpiceJet's arguments, overturning the July 2023 ruling and sending it back for a new hearing. However, Maran and KAL Airways appealed this decision, leading to last week's outcome.

"This is atrocious, this is not the way to write an order under s.34, this is atrocious," Chief Justice DY Chandrachud said last week about the July 2023 ruling. "Reading the order of the single judge, we find no discernible reason which the single judge has made and that there is no application of mind to the outcomes urged before the judge. In this view, we don't find that the High Court division bench erred in remitting the matter back to the single judge."

Maran and KAL are appealing a court ruling related to SpiceJet's 2015 ownership transfer

"The Supreme Court's dismissal of Maran's appeal affirms SpiceJet's stance in this prolonged legal battle," stated SpiceJet. Following this outcome, SpiceJet will now seek a refund of INR 4.5 billion (USD 53.7 million). Apart from significant efforts by SpiceJet to raise new funds, this refund will further fortify the airline's financial position and support future growth."

The case will now be reheard by a different judge at the Delhi High Court on a date yet to be determined.

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