Mumbai/Lucknow: Following the deal of acquisition of Air Sahara by Jet Airways was called-off, both the parties moved to court to stop the other party from operating the escrow account opened for the deal.
Jet moves court to stop Sahara from operating escrow account
Jet Airways filed an arbitration in Bombay High Court on Wednesday, saying conditions agreed upon for the takeover of Air Sahara have not been fulfilled, and sought a direction to restrain the latter from operating the escrow account for the deal.
In its petition, Jet contended that Sahara and its seven directors should be restrained from issuing notices to escrow agents to the effect that the conditions agreed in the sale-purchase agreement had been fulfilled.
Jet had transferred Rs 500 crore to the escrow account as advance to the Rs 2,300 crore deal.
Under the conditions agreed by the two parties, facilities like parking bays, arrival and departure slots had to be automatically transferred to Jet, but this did not happen.
Jet restrained from operating escrow account
A Lucknow court on Wednesday restrained jet Airways from withdrawing from the Escrow Account with ICICI Bank, the money it had transferred towards the Rs 2,300 crore buyout deal with Air Sahara.
District and Sessions Judge Shiv Charan Sharma passed the order on an application moved by the Air Sahara.
The court also directed ICICI Bank not to permit Jet Airways to withdraw from the Escrow Account till June 23 - the next date of hearing.
The order came on a petition filed by Sahara India Commercial Corporation Ltd, the holding company of Air Sahara, under section 9 of the Arbitration and Conciliation Act.
While seeking the restraint order, the Sahara counsel told the court that it feared that Jet Airways would be at liberty to withdraw the escrow amount after midnight tonight, when the deadline for share purchase agreement expires.
Jet Airways had paid Rs 500 crore on March 29 as advance to escrow agent for purchase of Air Sahara.
Under the agreement, Sahara was entitled to claim Rs 500 crore from the escrow account only on completion of the takeover exercise and Jet was eligible for full repayment within seven days of termination of the pact without any 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," Lucknow District Sessions Judge said in the order.
Jet's counsel argued that Sahara's petition may be admitted only after considering their objections.
"But the opposite party is fully competent and entitled to file objection even after register(ing) of the case," the judge said.
Jet, which has been virtually running Air Sahara for the over two months, claimed before the Bombay High Court that it was entitled to close the agreement without giving notice to any party if the conditions were not fulfilled by June 21.
Comments
0 comment