The Supreme Court has granted permission to low-cost airline SpiceJet and its Chairman Ajay Singh to approach the Delhi High Court for a modification regarding a cash deposit of Rs. 144.51 crore in their arbitration dispute with Kalanithi Maran and Kal Airways Private Limited. The apex court emphasized that it was not passing judgment on the ongoing dispute under Section 34 of the Arbitration and Conciliation Act. SpiceJet’s counsel highlighted the severe financial strain faced by the airline industry due to the West Asia crisis, including fuel price hikes and operational challenges.
Recent developments arising from the West Asia crisis and the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 have prompted SpiceJet and Ajay Singh to seek a fresh hearing at the Delhi High Court. SpiceJet has offered immovable property as security to clear dues but expressed difficulties in immediate liquidation as per the High Court’s order. The airline sector’s financial distress, exacerbated by the crisis, has led to a plea for more time to meet obligations.
Senior advocate Mukul Rohatgi, representing SpiceJet, informed the court about the impact of the West Asia crisis on the aviation industry, citing operational revenue declines and increased costs. SpiceJet’s attempts to substitute cash deposit with immovable property were previously rejected by the Delhi High Court. The ongoing legal battle stems from execution proceedings related to an arbitral award favoring Maran and Kal Airways.
