The High Court of Delhi has declined to overturn a 2018 arbitration order requiring SpiceJet (SG, Delhi International) to pay former majority owner Kalanidhi Maran INR5.79 billion (USD70.1 million) in compensation plus interest.

Justice Chandra Dhari Singh was dealing with a share transfer dispute between SpiceJet and Kalanithi Maran that dates back to 2015 when the current majority owner, Ajay Singh, bought back the struggling airline from Maran in a transaction that involved a substantial capital injection from Maran in exchange for stock warrants and convertible redeemable preference shares. While the capital was forthcoming, the promised stock warrants and convertible redeemable preference shares did not materialise, leading to Maran initiating legal action.

A July 2018 arbitration award ordered SpiceJet to pay Maran INR3.08 billion (USD37.3 million) for the undelivered warrants and INR2.7 billion (USD32.7 million) for the preference shares. The tribunal also ordered back interest be paid at 12% p.a., rising to 18% p.a. if SpiceJet failed to pay the amount by a fixed date.

SpiceJet eventually paid the INR3.7 billion and provided a bank guarantee to cover the outstanding INR2.7 billion, but took issue with the interest payment orders. However, Maran continued to compound and capitalise the outstanding interest, with the matter becoming bogged down in a series of hearings. In late January, legal action by SpiceJet prevented Maran from encashing that bank guarantee but the airline was given two weeks to pony up the cash.

"There is nothing in the impugned award to suggest that it suffers from patent illegality, and the findings therein are perverse and will shock the conscience of this court," said Singh in his ruling last week. "After consideration of the entirety of the matter, this court does not find any cogent reason to interfere in the impugned award dated July 20, 2018, passed by the arbitral tribunal in the arbitration proceedings initiated between the parties before this court."

Maran's pursuit of SpiceJet for overdue interest payments culminated in the Supreme Court last month refusing to allow SpiceJet more time to pay the debt, which stood at INR3.8 billion (USD46 million) in May.

While Maran gets to keep his INR5.79 billion, last week's ruling did not go all his way, with Singh upholding a lower court's dismissal of his counterclaim for INR13.23 billion (USD160.2 million) in damages over the matter.