SpiceJet stock falls as Kalanithi Maran seeks Rs 1,323 crore in damages

Maran and KAL Airways are also seeking the execution of the arbitral award to secure a refund of Rs 353.50 crore in pending dues.

Shares of SpiceJet fell on May 28, a day after KAL Airways and Kalanithi Maran said they will seek over Rs 1,323 crore in damages from the carrier and its chief Ajay Singh.

They will also challenge the recent Delhi High Court order in the ongoing dispute between the two sides in the Supreme Court.

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On May 17, a division bench of the Delhi High Court overturned a single judge's decision that upheld an arbitral award requiring SpiceJet and its promoter Ajay Singh to refund Rs 579 crore plus interest to Maran.

The case was remanded back to the single judge for rehearing, as per the bench's ruling.

The court clarified that any observations in the judgment on the merits of the case need to be disregarded. As a result, the litigation is likely to be prolonged.

Also Read | KAL Airways, Kalanithi Maran to seek Rs 1,323 crore in damages from SpiceJet, Ajay Singh

In light of this situation, Maran and his company KAL Airways have opted to challenge the verdict following consultations with their legal advisors. The decree holders, KAL Airways and Maran, contend that the aforementioned judgment is flawed and requires thorough examination.

Concurrently, they are pursuing damages exceeding Rs 1,323 crore, as assessed by FTI Consulting LLP, UK, a globally recognized firm specializing in estimating losses due to contractual breaches.

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KAL Airways stated on Monday that the claim for damages was initially presented before the arbitral tribunal and ”has always remained an integral part of their quest for justice”. They will pursue the execution of the arbitral award, seeking a refund of the pending dues amounting to Rs 353.50 crore.

Separately, a two-judge bench of the Delhi High Court on May 27 refused to stay an order of a single judge of the court asking SpiceJet to return two aircraft and three engines to its lessor TWC aviation.

The low-cost carrier chose to withdraw the appeal and pursue the case before a single judge. However, the court granted the airline till June 17 to return the aircraft and engines, instead of May 28 which was planned earlier.

The bench led by Justice Rajiv Shakder noted that it would be unfair to grant any order of this sort when the airline owes the lessor over Rs 120 crore.

According to the court, SpiceJet does not have the right to use the aircraft and engine without paying the requisite lease amount. "They (the lessor) are not in the business of charity," the court said.

Also Read | Delhi HC refuses stay on order to SpiceJet for return of leased aircraft, engines

In the previous session, SpiceJet shares ended 3.5 percent lower at Rs 58.27 on the National Stock Exchange (NSE). In the last one year, the stock has rallied over 121 percent, outperforming benchmark Nifty 50 which gained around 23 percent during this period.

Year-to-date, however, SpiceJet shares have fallen nearly 4 percent.

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