Final hearing in Jet-Sahara case from Monday

Seven months after initiating the arbitration hearing of the turned-sour Jet-Sahara deal, the tribunal will tomorrow begin the final hearing in the matter, for two weeks on a daily basis.

The three-member tribunal headed by British judge Lord Stein, includes retired Supreme Court Chief Justices S P Bharucha arbitrating for Jet Airways and Justice Jeevan Reddy for Air Sahara.

More than Rs 2,000 crore is at stake. In January 2006, Jet Airways had signed a share-purchase agreement (SPA) to acquire 100% equity stake in Air Sahara.

As part of the deal, Jet paid Rs 180 crore for revival of Air Sahara and Rs 500 crore for Air Sahara shares, besides depositing Rs 1,500 crore in the escrow account opened for the purpose.

However, the Bombay High Court allowed Jet Airways to withdraw the Rs 1,500 crore escrow against a bank gurantee of the same amount in September last year.

After the deal fell through - following Jet's failure to get regulatory clearances by the deadline of June 21 last year - both parties moved the court and the matter was directed for arbitration.

While arbitration hearings are on since September 9 last year, the panel is now set for final hearing and disposal of the issue.

Jet Airways claims that all conditions precedent to the deal were not fulfilled by Air Sahara and it was justified in walking out of the deal. But Sahara Airways has argued that getting clearance of Jet Chairman Naresh Goyal on the Air Sahara board was not a condition precedent.

According to sources, the three-member tribunal will focus on whether the specific conditions determined by the parties while signing the SPA were met before the cut-off date or not.