Air Sahara wants Jet to buy it for Rs 3K-cr
Questioning Jet Airways’ failure to acquire it, Air Sahara has filed a claim of Rs 3,020 crore before an Arbitration Tribunal here and sought honouring of the Share Purchase Agreement (SPA) reached by the two parties in January.
In its prayer before the Arbitration Tribunal headed by British Judge Lord Stein on November 20, Air Sahara sought Rs 3,020 crore from Jet toward execution of the SPA along with recovery of inter-line business revenue that the latter accrued for nearly three months.
As part of its prayer, Sahara sought a direction from the tribunal that Naresh Goyal-promoted Jet should execute the SPA and close the transaction as per directions of the tribunal.
Justice S P Bharucha and Justice BP Jeevan Reddy, both retired judges of the Supreme Court, are on the panel as nominees of Jet and Air Sahara respectively.
Alternatively, Sahara claimed if "Jet Airways is unwilling to buy Air Sahara, then Jet is liable to pay over Rs 1,931 crore as damage, compensation and inter-line revenue etc.
Jet on the other hand, filed its claim a day after the deadline set by the tribunal, seeking refund of Rs 500 crore paid by it as advance to Air Sahara along with interest.
Officials of Jet in Mumbai and Sahara in Lucknow declined to comment.
The Arbitration Tribunal had directed both the parties vide its procedural order on October 11, 2006 to file claims by November 20. However, Jet filed its claim only on November 20, sources said.
In its prayer, Sahara group contended that the SPA between the two parties was still valid – a position it had taken before a Lucknow court after Jet let the June 21 deadline for completing the deal pass.
Meanwhile, sources said that Bombay High Court accepted Jet’s plea for replacing ICICI Bank as the Rs 1,500 crore escrow account agent. With the consent of Air Sahara, the High Court allowed Jet to replace ICICI Bank with State Bank of India for the guarantee given to Sahara group.
Absence of regulatory clearances had played spoilsport in the deal, which was billed as India’s first and largest takeover deal.
Jet had announced in January it would buy Sahara for 500 million dollar, much less than the 750 million-one billion dollar enterprise value quoted by Sahara’s consultants Ernst & Young.
In March, Jet Airways had extended the deadline for completing the transaction by three months as it did not have regulatory clearance for the acquisition.
Under the agreement, Sahara was entitled to claim Rs 1,500 crore from the escrow account only on completion of the takeover exercise on June 21 and Jet was eligible for full repayment within seven days of termination of the pact without any dispute.
But on a petition from Sahara, the Lucknow District Sessions Judge had barred Jet from operating the escrow account on the grounds that the deal had collapsed due to a dispute.
"As there is a dispute and there is an arbitration clause, hence the petition is maintainable under section 9 of the Arbitration and Conciliation Act, 1996," the District Sessions Judge had said.
There were at least four litigations filed by the two parties before various courts, which were later transferred to the Bombay High Court.
The High Court, in turn, had directed the two parties to settle the dispute through arbitration.
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