SpiceJet Challenges Asset Deposit Order Amid Financial Turmoil
SpiceJet cites sovereign backing in HC to resist Rs 144 crore deposit
Business Standard
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SpiceJet is contesting a Delhi High Court ruling that requires it to deposit ₹144 crore (approximately $17.3 million USD) in an arbitration dispute with Kalanithi Maran and KAL Airways. The airline argues that potential sovereign support from the Indian government could aid its financial recovery, while the opposing party insists on enforcing the award due to SpiceJet's delayed compliance.
- 01SpiceJet is required to deposit ₹144 crore in a long-running arbitration case.
- 02The airline cites potential government support to manage its financial obligations.
- 03Opposing counsel argues that SpiceJet is attempting to delay enforcement.
- 04The dispute originated from a 2015 share transfer agreement.
- 05The court is considering the broader implications of enforcing the order on the airline's viability.
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The Delhi High Court recently heard SpiceJet's appeal against a ruling mandating the airline to deposit ₹144 crore (approximately $17.3 million USD) in its ongoing arbitration dispute with Kalanithi Maran and KAL Airways. Senior advocate Mukul Rohatgi, representing SpiceJet, informed the court about a potential sovereign backing from the Indian government under an 'Emergency Credit Line Guarantee Scheme' due to the West Asia crisis. He emphasized that this support could be confirmed soon and that the airline is exploring various avenues to secure funding, including selling assets. However, Jayant Mehta, representing Maran and KAL Airways, argued that SpiceJet's claims of financial distress were an attempt to delay enforcement of the court's order, which has been pending for years. The dispute dates back to a 2015 share transfer agreement, and the court is weighing the implications of enforcing the deposit on the airline's operational viability. SpiceJet has expressed concerns that compliance could exacerbate its financial difficulties, while the Marans insist on enforcing the award to protect their interests.
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If SpiceJet is forced to deposit the amount, it may hinder the airline's ability to operate and maintain jobs, affecting employees and customers alike.
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