Jet Airways has demanded that Air Sahara return the Rs500
crore advance following the collapse of the Rs2,300 crore
takeover deal. An application filed by Jet Air before
the Supreme Court said that as per the share purchase
agreement (SPA), Sahara India had "undertaken, absolutely
and unconditionally" to repay the advance amount
of Rs500 crore if the deal failed.
application sought a transfer of the cases initiated by
Air Sahara in the Lucknow district court to Bombay High
Court and prayed for a stay on the interim orders of the
Lucknow court. The Lucknow court had put a freeze on the
escrow account opened by Jet Airways, besides preventing
sale of Sahara''s shares pledged for Rs500 crore.
repayment in terms of the undertaking is to be made within
seven days from the date of termination or expiry of the
SPA without any dispute, demur or delay," Jet stated.
the application said, in terms of Clause 18.5.1 of the
SPA, the two sides had agreed to intimate the escrow agent
(ICICI Bank) about termination of the deal. As per the
clause, the bank was also bound to refund the amount to
Jet within one working day, the company said.
18.1 of SPA clearly mentioned the agreement could be terminated
automatically without the mandatory requirement of the
notice from any party, if the deal was not completed within
65 days, Jet claimed in the application. And, "in
terms of the express and specific provision contained
in the SPA (in clause 18.1), it stood terminated at the
midnight of June 21, 2006," Jet contended.
Airways also sought to clarify its position in relation
to the current controversy surroundings its deal with
Sahara. Jet some reports in sections of the media have
carried an impression that the company "blames"
the government for the lapsing of the deal.
deals are fashioned to respond to events, and they have
to be factored in as commercial risks. Government policy,
in evolving markets, is always a recognized commercial
consideration and is generally dealt with in large commercial
deals, Jet said.
deal was based on some assumptions - which were in turn
made conditions precedent. Since they did not materialize
the deal lapsed. In such a situation there is no occasion
to "blame" anyone or any agency, Jet clarified.