Air Sahara files compensation claim

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Air Sahara has filed a claim of Rs 3,020 crore before an Arbitration Tribunal and sought honouring of the Share Purchase Agreement agreed between Jet Airways and Air Sahara in January this year. Jet Airways had in January agreed to purchase Air Sahara for a consideration of Rs 2,217 crore.

The deal, however, lapsed when the share purchase agreement that had been negotiated between the two airlines was not finalised by June this year. Both the airlines blamed each other for the collapse of the agreement and moved court. Finally it was decided that the issue would be settled through arbitration.

Damages

In its plea before the arbitration panel, Air Sahara has claimed that if Jet Airways was unwilling to buy the airline then it was liable to pay more than Rs 1,931 crore as damages, compensation and inter-line revenues among others. Jet Airways, on the other hand, has sought a refund of Rs 500 crore paid as advance to Air Sahara for the purchase.

The tribunal is headed by British Judge Lord Stein and includes two retired judges of the Supreme Court, Mr Justice S. P. Bharucha and Mr Justice B. P. Jeevan Reddy, who are the representatives of the two airlines. When contacted, officials of the two airlines refused to comment on the ongoing arbitration procedures.

At the time of the buyout, the Chairman of Jet Airways, Mr Naresh Goyal, had said that the deal was being signed only after it had been studied by auditors, advisors, and consultants, who also looked at the recent airline mergers, including that of KLM and Air France. Kingfisher Airlines, was also in the race to pick up a stake in Air Sahara but withdrew from the race at the last moment.

Taken from Business Line

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