Asia Press Agency

Tag: Ajay Singh

  • Delhi High Court Summons SpiceJet Chairman in Legal Battle

    Delhi High Court Summons SpiceJet Chairman in Legal Battle

    The legal entanglement between SpiceJet and Kalanithi Maran took another turn as the Delhi High Court issued a summons to SpiceJet Chairman and Managing Director Ajay Singh. This marks the third time Singh has been summoned in the case, highlighting the protracted nature of the dispute.

     

    The legal battle, which has been ongoing since 2015, revolves around the payment of dues from an arbitral award. Kalanithi Maran, the chairman of Sun Group, alleges that SpiceJet and Ajay Singh owe him ₹440 crore in interest from the arbitral award. In response, SpiceJet asserts that it has already paid ₹100 crore following a court directive in August and owes an additional ₹194 crore. Additionally, the airline anticipates a reimbursement of ₹400 crore from Maran if its arbitration challenge proves successful.

     

    The dispute, originally stemming from the sale of Maran and KAL Airways’ entire stake in SpiceJet to Ajay Singh in 2015, has faced numerous challenges. Singh, who acquired the stake for a nominal ₹2, also took on SpiceJet’s debt of ₹1,500 crore. In return, Maran paid ₹679 crore to SpiceJet for share warrants and preference shares that were never issued.

     

    The legal proceedings have encountered delays, with three separate benches handling the case so far. The court recently adjourned proceedings at the request of SpiceJet’s counsel, scheduling Singh’s appearance before a new bench in February. This delay has contributed to the prolonged nature of the legal battle.

     

    During previous hearings, SpiceJet emphasized its financial challenges, citing operational losses, negative net worth, and employee-related obligations that could potentially lead to insolvency. The airline attributed these financial difficulties to various factors, including the grounding of Boeing 737 Max aircraft, the impact of the pandemic, and increased fuel costs due to the Ukraine conflict.

     

    SpiceJet had sought the court’s decision to be withheld until a division bench of the high court ruled on its challenge to the arbitral award. The intricacies of financial claims and the airline’s plea for a favorable arbitration challenge add complexity to the ongoing legal proceedings.

     

    In addition to the legal battle with Maran, SpiceJet is entangled in multiple legal disputes with creditors over outstanding dues. Recent challenges include an insolvency plea filed by Alterna Aircraft BV Limited, an Irish aircraft lessor, seeking recovery of $11.1 million and £265,000 awarded by English courts.

     

    On December 19, the Delhi High Court directed SpiceJet to pay $450,000 by January 3 to engine lessors EAM France 01 SAS and Sunbird France 02 SAS. These lessors claimed they hadn’t received payment of $12.9 million for over two years. The court also considered restraining the airline from using three engines, despite the termination of the lease.

     

    As the legal battles persist, SpiceJet faces a complex landscape of financial challenges and legal disputes, emphasizing the intricate nature of the aviation industry. The upcoming court hearings will play a crucial role in determining the resolution of the prolonged dispute with Kalanithi Maran.

  • NCLT Rejects Insolvency Plea Against SpiceJet

    NCLT Rejects Insolvency Plea Against SpiceJet

    In a reprieve for SpiceJet, the National Company Law Tribunal (NCLT) has dismissed a plea by aircraft lessor Willis Lease Finance Corp. to initiate insolvency proceedings against the airline, currently grappling with financial challenges.

     

    Despite this relief, three other lessors—Celestial Aviation, Wilmington Trust, and Aircastle Ltd—have parallel pleas awaiting resolution at the NCLT, seeking SpiceJet’s admission into insolvency due to unpaid dues. Additionally, business consultancy Raymach Technologies Pvt Ltd has filed a similar plea, prompting the NCLT to issue a notice to SpiceJet.

     

    To address outstanding dues amounting to Rs 2.31 billion (approximately $28 million), SpiceJet had allocated over 48 million shares to nine aircraft lessors. The airline is actively seeking to raise around $100 million, and discussions with global credit funds, led by promoter Ajay Singh, are reportedly underway. The funds raised could potentially be utilized to settle the airline’s pending dues.

     

    In the case of Willis Lease Finance, both parties engaged in a six-month argument. SpiceJet contended that Willis was not among its four operational creditors, challenging the admissibility of the insolvency petition. The airline highlighted Willis’s withdrawal of a previous, similar petition.

     

    The NCLT questioned Willis Lease Finance for filing a new plea for the same cause of action without court permission. The tribunal noted Willis’s status as not being a lessor of SpiceJet in a prima facie assessment.

     

    Willis Lease Finance clarified its role to the NCLT, stating that it was not a lessor but acted as the sole servicer and administrative agent on behalf of actual lessors. As a servicer, it asserted the right to initiate a corporate insolvency resolution process (CIRP) against SpiceJet, presenting relevant documents such as lease, service, and assignment agreements.

     

    While SpiceJet secures a reprieve with the dismissal of Willis Lease Finance’s plea, the airline continues to face legal challenges from other lessors and entities like Raymach Technologies. The NCLT’s decision sets the stage for further developments in SpiceJet’s efforts to address its financial woes and stabilize its operations.

  • Delhi HC: Notice to SpiceJet’s Chairman in Debt Settlement Case

    Delhi HC: Notice to SpiceJet’s Chairman in Debt Settlement Case

    The Delhi High Court has taken a decisive step in the ongoing legal battle between Kalanithi Maran and SpiceJet by summoning the SpiceJet’s chairman and managing director, Ajay Singh, to appear in person on August 24th for a hearing. This move follows a plea filed by Kalanithi Maran, the chairman of the Sun Group and former promoter of SpiceJet, seeking the attachment of 50% of the airline’s weekly cash revenue to settle a debt of ₹393 crore owed to him.

     

    During the hearing, Maran’s counsel, Maninder Singh, strongly urged the court to take action against SpiceJet for its intentional non-compliance with previous court orders and its failure to provide the necessary documents. This plea reflects Maran’s determination to secure the resolution he believes is rightfully due.

     

    On the other side, SpiceJet’s counsel, Sandeep Sethi, requested leniency from the court, citing the recent extension granted until September 5th for compliance with court orders. Sethi highlighted the potential negative impact of severe measures on SpiceJet’s already narrow profit margins and its workforce. Despite this appeal, the court decided to issue a notice to SpiceJet in response to the arguments presented.

     

    The crux of the dispute traces back to 2015 when Maran transferred his shareholding in SpiceJet to SpiceJet’s chairman Ajay Singh as the airline faced financial challenges. However, Maran alleged that SpiceJet did not fulfill the agreed-upon issuance of convertible warrants and preference shares, nor did it return the money as expected. Subsequently, an arbitration panel ruled in favor of Maran, ordering a refund of ₹579 crore along with interest from SpiceJet.

     

    This legal tussle highlights the complexities and implications of business agreements, financial settlements, and alleged non-compliance. The Delhi High Court’s actions signal the seriousness with which the case is being approached and the quest for a resolution that aligns with legal and contractual obligations. As the proceedings unfold, the outcome will significantly impact the dynamics between Kalanithi Maran, SpiceJet, and the broader aviation industry.