In a major relief for budget airline SpiceJet, the Division Bench of the Delhi High Court, in its order dated May 23, 2025, has dismissed the appeal filed by KAL Airways and its promoter Kalanithi Maran, who were seeking damages of more than ₹1,300 crore. This decision brings a long-standing legal battle one step closer to resolution and bolsters SpiceJet’s legal standing amidst its financial challenges.

Legal Battle and Background

The dispute between SpiceJet and Kalanithi Maran dates back several years and revolves around a share transfer and payment disagreement between Maran (the former owner of SpiceJet) and Ajay Singh, who bought back the airline in 2015.

In May 2024, KAL Airways and Maran filed a legal appeal seeking damages worth ₹1,323 crore, based on a valuation conducted by FTI Consulting LLP, United Kingdom. This was in addition to ₹353.5 crore in pending dues they claimed from SpiceJet.

However, SpiceJet noted in a regulatory filing that the claims made by Maran and KAL Airways were previously rejected by a three-member Arbitral Tribunal. The tribunal comprised retired Supreme Court judges and had already dismissed these claims on legal and factual grounds.

Following the tribunal’s decision, a Single-Judge Bench of the Delhi High Court also dismissed the same claims. Despite this, Maran and KAL Airways took the matter further, appealing before the Division Bench.

Now, the Division Bench too has ruled in favour of SpiceJet, effectively ending the ₹1,300+ crore damages pursuit by KAL Airways.

SpiceJet’s Statement and Regulatory Filing

Reacting to the favorable court verdict, SpiceJet stated in its regulatory disclosure:

“Division Bench of Delhi High Court in its order dated May 23, 2025, has dismissed the appeal filed by KAL Airways and Kalanithi Maran seeking damages of more than ₹1,300 crore and other claims. These assertions were already previously rejected by the Arbitral Tribunal and then the Delhi High Court.”

This statement reaffirms that the legal system has consistently ruled in favour of the airline, which has been fighting to stay financially stable amid various challenges.

Market Reaction: Stock Rises Over 4%

Following the announcement, SpiceJet’s shares surged by over 4%. Investors seemed to respond positively to the legal clarity and the company's strengthened position against heavy financial liability.

However, it’s worth noting that SpiceJet’s stock has fallen by 20.6% so far in 2025, reflecting broader operational and financial headwinds faced by the airline industry and SpiceJet in particular.

Arbitral Tribunal and Court Decisions Explained

The Arbitral Tribunal’s findings were central to the High Court's stance. The Tribunal, which comprised highly respected retired Supreme Court judges, found that:

• The damages claimed by KAL Airways and Maran were not legally tenable.

• The valuation presented by FTI Consulting did not hold strong legal weight.

• The terms of agreement between the parties did not support the claims for additional damages beyond what was previously addressed.

Both the Single-Judge Bench and Division Bench of Delhi High Court upheld these conclusions, thereby reinforcing the finality of the matter.

Implications for SpiceJet

The ruling is a significant win for SpiceJet, particularly in a time when the airline is navigating through:

• Cash flow issues,

• Fleet maintenance challenges,

• Regulatory pressures, and

• Rising operational costs.

With the court case behind it, the company now avoids a potentially crippling financial payout and gains room to focus on stabilising and growing its core business operations.

This verdict could also improve investor sentiment and potentially ease negotiations with lenders, vendors, and regulatory authorities.

History of the Dispute

To recap, this legal case began when Ajay Singh re-acquired SpiceJet from Kalanithi Maran and KAL Airways in 2015. As part of the deal, Maran alleged that SpiceJet failed to issue certain warrants and preference shares, for which he claimed compensation and damages.

Over the years, both parties engaged in arbitration and court proceedings, with Maran consistently trying to enforce the compensation claim. However, each legal forum — arbitration, Single-Judge, and now the Division Bench — has ruled in favour of SpiceJet.

What Lies Ahead for SpiceJet

While the legal battle seems to be nearing its end, SpiceJet’s broader challenges remain. The airline continues to face:

• Intense competition from other budget carriers like Indigo and Akasa Air

• The need to revamp its fleet and service reliability

• Funding and cash infusion requirements to ensure sustainability

• The need to strengthen passenger confidence through service improvements

Despite these issues, the verdict gives the company breathing space to explore financial restructuring, seek fresh equity, or even bring in strategic investors.

Investor and Public Perception

This judgment might also serve as a reputational boost for SpiceJet and Ajay Singh, as the company can now clearly distance itself from legacy legal issues.

The stock market reaction, though modest, reflects a potential turning point in sentiment if the company follows up this legal win with solid operational results or fundraising plans.

Final Word

This court ruling is a milestone for SpiceJet, effectively ending a long-drawn legal dispute with Kalanithi Maran and KAL Airways over alleged dues. It also reflects how corporate disputes rooted in legacy ownership transitions can take years to settle through India's judicial and arbitration systems.

With this legal cloud lifted, SpiceJet now has an opportunity to focus fully on revival, operational expansion, and investor confidence — all of which are vital for its future.

The Upcoming IPOs in this week and coming weeks are 3B Films, N R Vandana Tex Industries, Scoda Tubes,Neptune Petrochemicals, Astonea Labs, Nikita Papers, Prostarm Info Systems, Victory Electric Vehicles International, Blue Water Logistics, Wagons Learning.

The Current active IPO are Aegis Vopak Terminals, Schloss Bangalore, Unified Data - Tech Solutions.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.