The Delhi High Court on Friday sent the share transfer dispute between Kalanithi Maran and SpiceJet Ltd. to arbitration.
The dispute relates to the transfer of 18 crore warrants by SpiceJet to its former promoter Maran.
The court directed Maran and SpiceJet to constitute an arbitral tribunal, and said that the tribunal will have to give a final decision within 12 months of its constitution.
The High Court has also directed Spicejet to deposit the disputed amount of Rs 580 crore with the court. The amount will remain with the court till the final decision of the tribunal, said Justice Manmohan Singh while pronouncing the judgment. The court also ordered SpiceJet to not divest its shares till the arbitral tribunal’s decision.
Geneisis of the Dispute
This issue dates back to 2015, when the ownership of the airline changed hands. Kalanithi Maran and Kal Airways had transferred 350.4 million shares in SpiceJet. This amounted to 58.46 percent stake in SpiceJet for Ajay Singh, who is the current promoter of the airline.
As per the deal, Singh got control of SpiceJet, and Maran was supposed to get redeemable warrants in return for the Rs 690 crores invested by Maran during his tenure as the promoter of the airline. Maran is liable to get 18 crore warrants, which will translate into 26 percent shareholding in SpiceJet.
Maran moved Delhi High Court alleging non-compliance of deal terms by Ajay Singh and the SpiceJet board. Maran has sought a refund of the Rs 690 crore invested by him as the erstwhile promoter.
In March this year, the Delhi High Court directed SpiceJet board to pass a resolution regarding issuance of warrants to Kalinithi Maran. The court had also allowed joint representation to the Bombay Stock Exchange for approval.
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