SpiceJet's Troublesome Legal Battles Over Kalanithi's Ownership and Credit Suisse's Loan Repayment

SpiceJet's Troublesome Legal Battles Over Kalanithi's Ownership and Credit Suisse's Loan Repayment

On 15 September, Friday, SpiceJet Ltd. through an exchange filing said that it has complied with the directive of the Supreme Court by remitting USD 1.5 million to Credit Suisse. The payment was executed on Thursday, September 14.

Oliviya KunjumonUpdated: Saturday, September 16, 2023, 12:49 PM IST
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SpiceJet's Troublesome Legal Battles Over Kalanithi's Ownership and Credit Suisse's Loan Repayment | File photo

SpiceJet, a prominent player in India's aviation sector, has had its fair share of encounters with substantial legal challenges, as reflected in the ongoing legal battles within Indian courts. These complex legal disputes have spanned a diverse spectrum of issues, ranging from ownership conflicts to intricate contractual disputes.

Here are recent two notable legal cases involving SpiceJet:

SpiceJet and Kalanithi Maran Case

The most significant legal battle in SpiceJet revolved around the ownership dispute between Kalanithi Maran's KAL Airways and Ajay Singh. The conflict between SpiceJet and Kalanithi Maran began in January 2015. During that period, KAL Airways extended an offer to Ajay Singh, who served as the airline's principal shareholder, chairman, and managing director. The offer included the sale of a 58.46 percent stake in SpiceJet at a nominal price of Rs 2 per share. This offer had been made in response to the airline's financial challenges.

This transaction had led to a protracted legal battle between the two parties, with Maran seeking to regain control of the airline.

Recent update

After the long ongoing legal battle between SpiceJet and Kalanithi Maran, On the recent on August 24, The Delhi High Court asked SpiceJet to pay Kalanithi Maran Rs 100 crore by September 10 as bonafide subject to their rights and contention and placed the matter for hearing on September 11.

On September 14, SpiceJet said it has completed the payment of Rs 100 crore to Sun Group chairman Kalanithi Maran, as per the Delhi High Court's order regarding the execution of an arbitral award. SpiceJet owed Rs 397 crore to Maran, and the court is scheduled to hear the rest of the case next on 3 October.

SpiceJet and Credit Suisse Case

About the case

The dispute dates back to an unpaid engine maintenance and repair agreement that was signed in 2011, during the tenure of former promoter Kalanithi Maran, who was leading the airline at that time. An agreement for these services over a 10-year period was finalized between SpiceJet and SR Technics on November 24, 2011, with agreed-upon payment terms. On August 24, 2012, an additional agreement was entered into to modify certain terms of the original contract.

As per the Swiss firm, SpiceJet had availed the services of services of SR Technics, Switzerland, for the maintenance, repair, and overhaul of aircraft engines, modules, components, assemblies, and parts, which were essential for its operational needs.

In 2013, Credit Suisse had filed a case in the Madras High Court, alleging that SpiceJet had not honored its commitment to settle bills exceeding $24 million for the maintenance, repair, and overhaul of aircraft engines and components.

Recent update

The Supreme Court on August 11, Monday, issued a directive to SpiceJet to settle a USD 1.5 million debt owed to Switzerland's Credit Suisse by September 15 in the ongoing legal dispute.

On 15 September, Friday, SpiceJet Ltd. through an exchange filing said that it has complied with the directive of the Supreme Court by remitting USD 1.5 million to Credit Suisse. The payment was executed on Thursday, September 14.

SpiceJet Shares

SpiceJet witnessed a surge of over 3 percent in its morning trade on September 15 following the airline's announcement of its compliance with the Supreme Court's directive. The compliance involved the remittance of $1.5 million to Credit Suisse.

The shares of Spicejet on Friday at 3:30 pm closed Rs 38.54, up by 0.42 percent. 

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