SpiceJet vs Lessor: Delhi HC wants an expert to examine engine

SpiceJet to suggest names to check serviceability of engine

The Delhi High Court on February 14 asked low-cost airline SpiceJet and Engine Lease Finance BV to come up with names of agencies that can assess engines. The two sides have been making opposing claims on the condition of a leased engine.

The engine, which is in possession of the SpiceJet, is at the centre of the legal battle between the two sides, with the lessor accusing the cash-strapped airline of not paying its due.

The lessor has claimed that the engine is unserviceable but the airline contends it is in a serviceable condition.

On February 12, the lessor asked SpiceJet to return the engine "as is where is" so that it could be taken to Brussels for a check. It would claim the cost of repair from SpiceJet after the engine was sent to Brussels, the lessor said.

To avoid further conflict, the court suggested appointment of an agency to certify the condition before it is transported.  The case will now come up for hearing next week when the two sides are expected to suggest the names.

The dispute started  after the lessor inspected the engine in January and claimed the airline was causing harm to expensive equipment by not adhering to Boeing's maintenance manual. The engine was not in a condition to be redelivered to it in Europe, it said.

In December, Engine Lease Finance filed an application alleging that the airline had failed to make payments as agreed.

The lessor alleged that SpiceJet only paid a part of the money and was yet to make complete payments as was agreed in October. The court said the airline couldn’t go back on its words and asked SpiceJet to file an undertaking to pay.

In October, the lessor and SpiceJet arrived at an interim settlement. The engine lessor agreed not to pursue the stay application against the airline.

Engine Lease Finance had moved the court stating that they had terminated its lease with SpiceJet and the airline had returned eight of its nine engines.

As per the agreement, the airline cannot continue using the engine once the lease is terminated. The lessor sought the court's order to restrain SpiceJet from using its engine.

Besides Engine lease, at least two other lessors have moved the Delhi High Court against SpiceJet alleging non-payment of dues.