New Delhi, Aug. 28: The Supreme Court today ordered the transfer of all disputes arising from the collapse of the Air Sahara-Jet Airways merger to Bombay High Court, which will hear the cases on merits only after settling the dispute over jurisdiction.

A bench headed by Chief Justice Y.K. Sabharwal, however, refused to vacate an interim order by a Lucknow court freezing the escrow account pertaining to the Rs 2,300 crore deal.

Jet Airways, which had moved the apex court for transfer of two cases before the Lucknow court, would, therefore, not be able to withdraw the Rs 1,500 crore held in the escrow account till further orders. Another sum of Rs 500 crore that Jet had paid as advance to the Roys of Air Sahara also remains blocked.

Industry sources said Jet Airways would stand to lose Rs 20 lakh per day as long as Rs 2,000 crore remained blocked.

Soon after the Jet Airways-Air Sahara share-purchase deal broke down in June, both the parties moved courts claiming their rights over the advance money deposited in the escrow account with ICICI Bank. While Air Sahara preferred Lucknow, Jet moved Bombay High Court to enforce the arbitration agreement between them. The apex court noted that it would serve the ends of justice if all related matters pertaining to the share-purchase agreement were heard at one place.

Although the court ordered transfer of all cases to Mumbai, it made it clear that the parties would be free to question the jurisdiction of the high court and the petitions would be heard on merits only if the high court had the inherent jurisdiction to entertain the pleas.

Besides seeking to club Air Sahara’s petition with the one filed by it at Mumbai, Jet Airways had also sought a stay on an interim order by the Lucknow district court freezing the escrow account pertaining to the deal.

“As the Supreme Court has asked Bombay High Court to settle the matter expeditiously, we expect it to get settled within a month,” said the Jet Airways spokesperson.

Sources said they expect a lengthy court battle before the issue of jurisdiction is settled. It might prompt Jet Airways to opt for an out-of-court settlement.

While confirming that the airlines have received feelers from certain mediators to reach some compromise, Air Sahara said it has not yet considered any such proposal. Alok Sharma, chief of the airlines, is expected to hold a press conference in New Delhi on Wednesday to make an important announcement.