The Supreme Court today sent all disputes arising from Jet Airways' failed bid of Sahara Airlines to the Bombay High Court, and asked it to decide on the issues as early as possible. |
The bench headed by Chief Justice Y K Sabharwal, however, did not vacate the stay on the escrow account and advance paid by Jet in the aborted Rs 2,300 crore deal. |
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Last month, the Supreme Court had stayed the arbitration proceedings in the Lucknow district court, with the result that Jet Airways was not allowed to claim the Rs 1,500 crore lying in the escrow account with ICICI Bank. This injunction will continue till further orders are issue. |
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In today's order, the Supreme Court asked the high court to hear the case on a priority basis and also decide the contentious issue of the court with the jurisdiction to hear the case. Sahara will have the option to argue that the high court did not have the jurisdiction to hear the case. |
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The court said that with respect to various clauses of the escrow, pledge and guarantee agreements it was of the view that justice would be delivered if the issue was decided by one court, namely the high court. |
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If it was found that the high court has jurisdiction, the petition filed by Jet before the Lucknow court would be heard by the Bombay High Court. |
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After the failure of the deal, Jet had approached the Bombay High Court and Sahara moved the Lucknow district court seeking to restrain each other from withdrawing money deposited in the escrow account. |
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Meanwhile, Jet has named Justice SP Bharucha, the former chief justice of India, as arbitrator while Air Sahara has brought in Justice BP Jeevan Reddy, also a Supreme Court judge. According to sources, both arbitrators have agreed to appoint Lord Steyn as the chief arbitrator. |
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According to industry circles, the move will delay the return of the Rs 500 crore which Jet had advanced to Air Sahara. This at a time when the airline is facing losses and needs cash for expansion. Saroj Datta, Executive Director, Jet, declined to comment on the issue, adding "the matter is subjudice". |
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Mediators had been working on various solutions to resolve the imbroglio "" one which entails paying off Rs 300 crore (instead of Rs 500 crore) to Jet as an out-of-court settlement. Another proposal floated is to renew negotiations for buying out Air Sahara at a lower price. |
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Jet Airways had advanced Rs 500 crore out of the agreed consideration of Rs 2,300 crore to the shareholders of Air Sahara, against a pledge of 100 per cent of Air Sahara's shares. besides it had parked Rs 1,500 crore in the escrow account. |
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