Spicejet case: Aircraft lessor moves Delhi HC to recover money awarded by UK Court

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

An aircraft lessor of low-cost airline SpiceJet, named VS MSN 36118 CAY Designated Activity Company, on November 21 moved the Delhi High Court to execute a decree it obtained in the United Kingdom in June 2023 against the airline.

The lessor seeks to recover an amount of Rs 90 crore from SpiceJet by executing the judgment of the UK court. The HC has sought the airline's response to the plea and the case is likely to come up for hearing in February.

VS MSN 36118 CAY Designated Activity Company, represented by senior advocate Rajshekar Rao and lawyer Anandh Venkatramani also asked the court to restrain SpiceJet from using their aircraft, however, the court did not pass any such orders for the time being.  The court has permitted the lessor to inspect the aircraft and check if it is maintained properly.

Senior advocate Amit Sibal, who appeared for SpiceJet told the court that the airline will regularise its lease rent payments to the lessor from December.

SpiceJet entered into a lease with VS MSN 36118 CAY  in 2018 for a Boeing 737-700. The tenure of the lease was 96 months, which was supposed to expire in 2023. According to the lessor, SpiceJet defaulted on its payments periodically from November 2020. Thus the lessor moved a plea in the United Kingdom for payment of dues and also claimed for future rental said to have become due upon an event of default.

The court in the UK awarded both past rent dues and future rent close to $ 5.89 million. 

VS MSN was represented by Tuli & Co with the Partner Saket Satapathy

SpiceJet and lessors

Earlier, an Engine lessor called Engine Lease Finance BV moved the Delhi HC with a plea to restrain the airline from using the leased engine. In October 2023, Engine Lease Finance BV and  SpiceJet arrived at an interim settlement. The engine lessor has agreed not to pursue the stay application against SpiceJet for now.

According to the terms of the settlement, SpiceJet must pay over $2 million to Engine Lease finance by January. SpiceJet has also undertaken to return the engine which is the bone of contention by January 25. However, the Engine lessor will not revoke the termination and is at liberty to approach the court if SpiceJet does not comply with these undertakings.

Four aircraft lessors have filed five insolvency pleas 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.