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SpiceJet has approached the Delhi High Court seeking permission to submit an immovable property as security instead of depositing INR 144 crore in its ongoing arbitration dispute with Kalanithi Maran and KAL Airways. The airline cited liquidity challenges due to operational disruptions, including reduced Gulf operations. However, the court rejected the proposal and granted a final four-week extension to deposit the amount. The case stems from a long-standing 2015 share transfer dispute, and continues to impact SpiceJet's financial position and legal obligations.
SpiceJet has approached the Delhi High Court with a request to submit an unencumbered immovable property as security instead of depositing INR 144 crore in an ongoing arbitration-related matter. The dispute is linked to former promoter Kalanithi Maran and KAL Airways, arising out of a past share transfer agreement. Advertisement
During the hearing, senior counsel Amit Sibal, appearing for the airline, informed the court that the company was facing liquidity constraints. He conveyed that the airline was not insolvent but was currently dealing with cash flow issues due to operational challenges. He explained that nearly 40% of SpiceJet's flights to Gulf destinations had been affected due to ongoing geopolitical tensions, which resulted in cancellations and revenue losses. To address the court's requirement, the airline offered a property valued at around INR 148 crore as security.
The court, however, did not accept the proposal and pointed out that there were clear earlier directions requiring a monetary deposit. It also noted that the Supreme Court of India had previously declined to interfere with the High Court's order on this matter. As a result, the High Court maintained its stance and rejected the substitution of deposit with property.
At the same time, the court granted SpiceJet an additional four weeks to comply with the order and deposit INR 144 crore. It clarified that this extension should be treated as a final opportunity to meet the financial obligation.
The dispute dates back to 2015, when Kalanithi Maran and KAL Airways transferred their 58.46% stake in SpiceJet to Ajay Singh at a time when the airline was under financial stress. As part of the transaction, it was agreed that warrants and preference shares worth INR 679 crore would be issued. However, Maran later alleged that these instruments were not issued, which led to arbitration proceedings.
In 2018, an arbitral tribunal directed SpiceJet to refund INR 579 crore along with applicable interest, while rejecting claims for additional damages. Since then, the case has gone through multiple rounds of litigation. SpiceJet has maintained that it has already paid a substantial portion of the awarded amount, including interest, but the remaining liability continues to be contested in court.
The ongoing case adds to the airline's broader financial and operational challenges. In recent years, SpiceJet has faced issues such as delayed payments to lessors, regulatory scrutiny, and efforts to raise funds through various means, including equity infusion and asset monetisation. The current dispute further highlights the pressure on its balance sheet.
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