HC asks Jet, Sahara to move AT
In a setback to Jet Airways, the Bombay High Court on Wednesday asked the airline to approach the arbitration tribunal for resolving the dispute over the bank guarantee given to Air Sahara for the failed takeover deal.
By PTI |
MUMBAI: In a setback to Jet Airways, the Bombay High Court on Wednesday asked the airline to approach the arbitration tribunal for resolving the dispute over the bank guarantee given to Air Sahara for the failed takeover deal.
Jet Airways had last year submitted a bank guarantee of Rs 500 crore for a share-purchase agreement (SPA) to acquire Air Sahara, but the deal went sour. The companies had earlier approached an Arbitration Tribunal (AT) in London to resolve the matter related to the failed takeover deal, but the issue of bank guarantee was not included.
Jet had moved the High Court to get the guarantee money back, but a bench of Justice D K Deshmukh today disallowed the petition and asked the carrier to approach the tribunal.
Sahara's counsel Fali Nariman had earlier contended that the guarantee money was incorporated as part of the SPA and should be dealt with by the tribunal.
However, Jet's lawyers Harish Salve and Janak Dwarkadas had opposed the contention, saying the guarantee was distinct from the SPA. They had argued that it was a stand-alone guarantee and a liability to be paid on demand.
ADVERTISEMENT
Jet had entered into a SPA with Sahara India Commercial Corporation Ltd for Rs 2,000 crores on January 18 last year. The condition precedent to the SPA was acquiring necessary approvals from regulatory authority. But the deal did not go through on account of non-completion of this condition by the deadline of June 21, 2006.Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
