Aviation Working Group on April 2 issued a ‘negative’ compliance outlook for India with the projected score set to decline further after non-compliance of Cape Town Convention (CTC) and substantial losses to creditors under the Go First row.
In October last year, the group had upgraded India’s outlook to ‘positive’ after the ministry of corporate affairs decided to delink the provisions inked under CTC from the Insolvency and Bankruptcy Code (IBC). It was revised to ‘negative’ in December over the failure to provide any relief to the lessors.
“While the moratorium exclusion is a positive step, the continued lack of clarity as to its applicability to the GoFirst insolvency proceedings and the lack of general CTC primacy leads to low confidence that CTC will be enforced,” the group said.
The development comes after almost year when the insolvency proceedings against domestic carrier was admitted by the National Company Law Tribunal and a moratorium imposed, which prohibited the recovery of the aircraft by lessors. Requests for deregistration were also dismissed by the Directorate General of Civil Aviation (DGCA).
The group further said that remedies under CTC have not been made available to the lessors and access to aircraft has also not been provided to determine if they are being maintained according to the convention. It has already been 266 days, which is way more than the stipulated 60 days within which remedies are required to be provided to the lessors under the convention.
India’s score as of now is 50, which comes under the “low category”, the group said.
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