Date:10/04/2007 URL: http://www.thehindubusinessline.com/2007/04/10/stories/2007041004831000.htm

Jet-Sahara row: Arbitration panel begins hearing today

Our Bureau

This follows in-conclusive talks between the two airlines on Monday

Mumbai April 9 The battle between Jet Airways and Air Sahara appears to have entered the crucial leg, with the arbitration panel slated to start the final hearing from Tuesday. This follows the in-conclusive informal talks between the two airlines at a five-star hotel in Mumbai on Monday.

Senior officials and lawyers of both the airlines tried to settle the dispute through closed-door informal talks for hours, in an effort to avoid the arbitration route. But, with both the parties not refusing to budge, the daylong confabulations did not yield any result, setting the stage for the arbitration panel's final hearing, sources involved in the process said.

Both the airlines have hired a battery of high-profile lawyers for the final hearing of the arbitration panel. Mr Naresh Goyal, Jet Airways Chief, along with his senior team, was present at Monday's meeting.

Causes

The dispute arose after the collapse of the Rs 2,220 crore Jet-Sahara deal last year. Jet Airways had wanted to purchase Sahara and had even taken over the latter's operations for almost three months, before opting to walk out of the deal in June last year.

The arbitration panel's verdict assumes significance as it involves a stake of Rs 2,200 crore, out of which Rs 1,500 crore is in the form of a bank guarantee given by Jet, another Rs 500 crore that was given by the airline in cash to Sahara and Rs 200 crore invested by Jet for running Sahara.

Sources said Jet continues to stick to its earlier position that various approvals from the Government had not been secured before the stipulated cut-off date. Sahara, on the other hand, maintains that all the major conditions, including necessary Government clearances had been met. Both the airlines have subsequently moved the court.

Sources said the arbitration panel may take a maximum of three weeks to hear the case and pass the verdict.

Shares of Jet Airways closed at Rs 644.15, up by 2.68 per cent on BSE on Monday.