The Delhi High Court dismissed on Thursday Spicejet Ltd.'s plea for a stay on the single-judge bench's refusal to waive interest on the arbitral award owed to Kalanithi Maran of Kal Airways Pvt.
SpiceJet cited that they had not been able to pay the arbitral dues to Maran because of lack of funds and if it becomes insolvent, Maran could become an operational creditor, which would not benefit him either.
The division bench said it cannot grant a stay on the single judge's order as the Supreme Court had denied SpiceJet's request in February for an extension to meet the payment obligations to Maran.
The apex court had ordered SpiceJet to pay the entire arbitral award of Rs 380 crore to Maran, the former promoter of the airline, in a single payment. It rejected SpiceJet's plea for additional time to make the payments in an attempt to uphold "commercial morality" in business.
On July 31, the high court upheld the 2018 arbitral award that directed Spicejet to refund Rs 578 crore to Kal Airways and its Chairperson Maran. The court had asked the airline to refund Rs 308 crore in cash with interest and the rest Rs 270 crore towards cumulative redeemable preference shares.
Kal Airways and Maran was awarded a 12% interest for pendente lite—interest that gets accumulated while a suit is pending—and would get an 18% interest from the final due date if SpiceJet and Chairperson Ajay Singh fail to fulfill the payments within two months from the award date.
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