Co-founder drags India’s IndiGo Airlines to high court
A festering public spat between IndiGo Airlines (6E, Delhi Int'l) co-founders Rakesh Gangwal and Rahul Bhatia has taken a new turn with Gangwal asking the High Court of Delhi to enforce a London Court of International Arbitration ruling against his former partner and Bhatia’s InterGlobe Enterprises (IGE), the carrier’s parent company, local media reported. However, the high court refused.
The court in London had passed the award in favour of Gangwal on September 23, ordering the removal of Articles of Association (AOA) that restrict the transfer of shares. It also ruled for an extraordinary general meeting (EGM) to be held, requiring the two businessmen to agree on a resolution for the removal of these restrictions.
Armed with this judgement, Gangwal asked the high court to force Bhatia to issue a draft resolution, but one day later, on October 8, the court reminded him that the 90-day period for challenging it was not yet over. Indeed, Bhatia and InterGlobe have decided to challenge the arbitral ruling, the court heard.
“IndiGo was not a party to the dispute but is facing the consequences of the arbitral award. An award cannot be enforced in this fashion,” Bhatia’s counsel told the court.
InterGlobe Aviation has potentially been facing an investigation by the Securities and Exchange Board of India (SEBI) since a split emerged two years ago when Gangwal alleged corporate governance lapses at the company. In February 2020, the IndiGo parent again refuted all such charges after a preliminary SEBI probe suggested they existed.
Despite the ruling in London, sources told the online news site and television channel ET NOW that there was no one decisive winner, as the arbitration tribunal favoured Gangwal over Bhatia in parts but not in others. For example, it found merit in Bhatia’s argument that Gangwal had breached confidentiality clauses in the shareholder agreement and ordered some damages to be paid to Bhatia.
Both entrepreneurs have an almost equal stake in the airline, Bhatia’s lnterGlobe with 38.2% and Gangwal Group holding 36.6%. Foreign institutions hold around 17% of the remainder. Gangwal, who lives in the United States, was reappointed as a director at IndiGo Airlines on August 31, 2021, after a majority of shareholders voted in favour of the move. _________________ 11000 posts (and counting) on Airliners-India.
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