As the issue of Jet Airways' acquisition of Air Sahara moved to the courts today, there was a buzz in legal circles that both the sides had approached senior corporate lawyers in Delhi to get ready for the big fight.
However, legal experts still felt these were protective steps. "The money has not yet been appropriated by the other party; it is still in the escrow account. Any reasonable business house would like to take precautions and get ready for any legal battle. One prepares for the worst," said Supreme Court lawyer Lalit Bhasin.
Apart from invoking Section 9 of the Arbitration and Conciliation Act, either party could claim damages in the event of the deal falling through.
Air Sahara could sue Jet for breach of contract, asking for either specific performance of the contract or compensation after proving that tremendous damage had been done, said corporate lawyer Rajiv Bansal.
According to him, Air Sahara was on stronger footing and would get to keep the Rs 100-crore (Rs 1 billion) earnest money. "Specific performance granted by the court would require Jet to perform its obligation as per the contract," he said.
Jet, on the other hand, can play the regulatory approval card, saying that it called off the contract for want of requisite approvals. According to Bhasin, Jet chief Naresh Goyal could claim that all negotiations were done on his behalf and his being on Sahara's board was a relevant factor in deciding the deal.
Agreeing with Bhasin, senior lawyer A S Chandioke said Jet Airways would have to prove that it was a condition precedent that the whole deal hinged on the necessary clearances and regulatory approvals.
Another advocate said Air Sahara could raise the argument that though Goyal's name was not cleared by the government for joining the board of Air Sahara, he could nominate any other member.
Aviation industry experts said Jet would not mind losing some money as its earlier proposal to pay Rs 2,300 crore (Rs 23 billion) for Air Sahara was too high.
