No Court Relief For IndiGo's Gangwal Seeking EGM To Lift Curbs On Share Sale
The Delhi High Court has refused to intervene, at this point in time, in implementation of an arbitral award in the shareholder dispute between Rahul Bhatia and Rakesh Gangwal. The two are co-founders of IndiGo Airlines and promoters of its parent company InterGlobe Aviation Ltd.
The court noted that Rahul Bhatia and InterGlobe still have time to implement or challenge the arbitral award.
The court hearing was prompted by a petition filed by Gangwal, owner of a 36.63% stake in IndiGo's listed parent company. Bhatia owns 38.20%.
Gangwal claimed in his petition that his efforts to implement directions in the arbitral award of Sept. 23 had not received any response from Bhatia.
According to Gangwal's petition, a copy of which was reviewed by BloombergQuint, the arbitral award offers two key reliefs;
Remove the Transfer Restriction Articles from the listed company's Articles of Association.
Gangwal to pay Bhatia $50,000 for a claim raised by him in the arbitration.
While the full arbitral award is not detailed in the petition, it states that the award directed Bhatia to, jointly with Gangwal:
Make a requisition to call an extraordinary general meeting of the airline's shareholders to vote on a resolution to remove the transfer restriction articles, within 30 days of the award.
Take necessary actions to convene and conduct the EGM at joint cost and vote in favour of the resolution.
The award also directs Gangwal to pay Bhatia $50,000 within 30 days.
But that 30-day period has yet to run out and hence the court on Friday declined to intervene at this stage, except to enable Gangwal's payment of $50,000 to Bhatia as per the award.
If and when an EGM is held to remove the transfer restrictions on promoter shareholding, it may spark fresh speculation on whether Gangwal is seeking to sell part or all of his stake.
Gangwal's previous attempt to vote out the transfer restrictions failed due to lack of support from Bhatia.
For more on the transfer restrictions and implications of their removal, click 👇🏼.