Arbitration tribunal starts hearing in Jet-Sahara case

09 October 2006

Mumbai: A three-member arbitration tribunal consisting of retired Supreme Court chief justices S P Bharucha, Jeevan Reddy and Lord Stein, has started hearing in cases pertaining to the collapsed Jet-Sahara take-over deal.

The Bombay High Court had, on September 22, allowed Jet Airways to withdraw Rs1,500 crore deposited in an escrow account opened for the purpose of acquiring Air Sahara, against a bank guarantee of the same amount. The court had also ruled that the interim judgement was subject to the tribunal's decision, which will hear the case from the second week of October.

"The tribunal will submit its report to the high court once the hearing is complete and the high court will give the final verdict on the case," Jet Airways lawyer Janak Dwarkadas said.

Jet Airways had signed an agreement to take over Air Sahara in January 2006. Jet had also paid Rs180 crore for the revival of Air Sahara and Rs500 crore for Air Sahara shares, besides depositing Rs1,500 crore in the escrow account opened for the purpose, as part of the deal.

However, the deal fell through, following Jet's failure to get regulatory clearances by the June 21 deadline and Sahara moved a Lucknow court seeking a bar on Jet from operating the escrow account. Jet also filed two separate counter petitions before the Bombay High Court.