Engine leaser moves Delhi High Court against SpiceJet

SpiceJet

Engine Lease Finance BV, which leased nine engines to SpiceJet, on September 27 urged the Delhi High Court to direct the low-cost airline to return the remaining one engine, the latest in a series of legal troubles for the cash-strapped carrier.

The lessor also sought directions to restrain SpiceJet from using that engine.

Appearing for Engine Lease, senior advocate Rajshekar Rao and lawyer Anandh Venkatramani told the high court that the firm 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 was terminated.

Justice Sachin Dutta said that while he was satisfied with the contentions of the lessors, he wanted to hear SpiceJet before granting an injunction.

The judge issued a notice to SpiceJet and the case is likely to come up for hearing on October 6.

Engine Lease Finance Corporation was represented by by Tuli & Co, with the Partner, Saket Satapathy.

Engine Lease Finance is also a lessor to the grounded airline Go First. It is fighting Go First at the National Company Law Tribunal (NCLT) to be exempted from the insolvency process, as it terminated the leases before the order for moratorium was passed.

SpiceJet and lessors

Four aircraft lessors have filed five insolvency plea against SpiceJet in 2023 for the non-payment of dues.

Aircastle Ireland Ltd, Willis Lease Corporation, Wilmington and Celestial filed petitions, asking NCLT to admit SpiceJet to the insolvency process to enable them to recover their dues.

While the NCLT has issued notice only in Aircastle's first plea, it has been urging the airline to settle with the lessors. In August, SpiceJet allotted over 48 million shares to nine aircraft lessors to clear outstanding dues worth 2.31 billion rupees (nearly $28 million), as the troubled airline looks to return to full operations.

The carrier’s shareholders passed a number of resolutions, including a Rs 25 billion fundraise and a preferential issue of shares to lessors to clear outstanding dues.

The NCLT is expected to hear these pleas in October.