IndiGo's promoter Rakesh Gangwal on Thursday moved the Delhi High Court to enforce an arbitration award that was given by the London Court of International Arbitration. The court will take up the plea on Friday at around 11 a.m.
Earlier on September 23, the London Court of International Arbitration gave the final award in the proceedings initiated by InterGlobe Enterprises Private Limited’s (IGE’s) co-founder Rahul Bhatia against the other founder Rakesh Gangwal. Both parties were granted 90 days’ time to enforce the order.
In a filing on the Bombay Stock Exchange (BSE) on September 24, IndiGo had said that no directions have been given to the company. However, directions were issued to both RG Group and the IGE Group, IndiGo’s parent company, in relation to the relief sought by them against each other.
IndiGo said that the award also directs the reimbursement of the costs incurred by the company in relation to the arbitration by the IGE Group.
However, Gangwal moved the Delhi High Court before the deadline and also agreed to enforce the orders before the 90-day period.
According to IndiGo’s BSE filing last month, IGE group had sent a request for arbitration on October 1, 2019, to the London Court of International Arbitration, India, under a shareholder’s agreement dated April 23, 2015 (amended on September 17, 2015). The IGE group had sought certain reliefs against the RG group, including compliance with shareholders agreement, the company’s articles of association (articles) and damages.
As of June 2021, Gangwal Group holds 36.63 percent share and Bhatia's lnterGlobe Enterprises Private Limited holds 38.2 percent stake in IndiGo.
The legal tussle between Bhatia and Gangwal, the two promoters of IndiGo, began on July 8, 2019 when Gangwal wrote to the Securities and Exchange Board of India (SEBI), the Prime Minister’s Office, and to the Finance Ministry seeking intervention in several corporate governance issues and Bhatia Group’s control on the airline.
Gangwal had asked for amendment in the Article of Association of the company to remove the rights of IGE Group on the airline. He had also raised issues regarding party transactions, non-independence of the present chairman, and refusal to hold extraordinary general meeting (EGM).
In response, IGE group had said that there is absolutely no evidence regarding the questionable third-party transactions between IGE and the airline.
Gangwal was re-appointed as a director of IndiGo on August 31, 2021. Though almost one-third of public institutional investors rejected the re-appointment, the resolution was passed as promoters, non-institutional investors and other institutional investors voted in favour.