Panel to hear Jet-Sahara row from Monday

http://economictimes.indiatimes.com/Panel_to_hear_Jet-Sahara_row_from_Monday/articleshow/1868087.cms
CUCKOO PAULTIMES NEWS NETWORK[ SATURDAY, APRIL 07, 2007 01:43:02 AM]
MUMBAI: The acrimonious battle between Jet Airways and Air Sahara is entering the final round with the arbitration panel starting final hearing in Mumbai from Monday. Sources close to the affair say that the panel has made it clear that they will focus on whether the specific performance parameters inked in the share purchase agreement were met before the deal fell through in June last year. Jet is likely to maintain — as it has done in the past — that various approvals from the government had not been secured before the cut-off date. Sahara, on the other hand, will argue that all the eight to nine major conditions — such as approval from the banks and government clearances for directors on the board — had been met and that the transaction should be closed. Much rides on the panel’s verdict as it will be binding on both carriers. At stake is about Rs 2,200 crore, of which Rs 1,500 crore is in the form of a bank guarantee given by Jet Airways, about Rs 500 crore in cash that Air Sahara is in possession of and about Rs 200 crore that the Mumbai-based airline invested in Air Sahara when it was running it. Both sides have armed themselves with a battery of high-profile lawyers, who have for the past fortnight, filed a flurry of affidavits and counter-affidavits. Sahara is being represented by Queens Counsel Bruber, a UK-based lawyer and advised by DSK Legal, while Jet has a legal team led by Harish Salve. Sources close to developments say a settlement on the issue is unlikely considering the hard line that both airlines have taken on the issue over the past few months. The clash of ego of the promoters after the public breakdown of the Rs 2,220-crore deal is reportedly the major issue that impedes any settlement. Jet Airways had virtually taken over the operations of Air Sahara for about three months and then walked out of the deal on June 21, claiming that the conditions precedent to the deal were not met. Both airlines subsequently went to court and have since gone into arbitration. The panel is headed by British judge Lord Stein, Jet has named former India chief justice SP Bharucha as its arbitrator while Sahara has brought in Justice BP Jeevan Reddy, also a Supreme Court judge. The conditions included getting approvals from banks as well as the government for Jet’s takeover of the Lucknow-based airline. Sahara will argue that seeking clearance for Jet Airways chairman Naresh Goyal to be on the Air Sahara board was not among the conditions precedent to the deal. In its petition to the courts earlier, Air Sahara had held that Sahara India Commercial Corporation Limited (SICCL), the Sahara group company which is the prime shareholder of Sahara Airlines, had made a last ditch effort to secure an extension of the share purchase agreement (spa) with Jet Airways on June 19, just two days before it lapsed. SICCL had written to Jet Airways requesting an extension of 15 days for the conditions for purchase to be fulfilled. Jet Airways is sticking to its stand that the conditions precedent were not met and had therefore justified its decision to walk out of the deal.