Supreme Court asks SpiceJet to pay $1 million to Credit Suisse for 6 months

SpiceJet Credit Suisse

The Supreme Court on September 22 ordered cash-strapped budget airline SpiceJet and its chariman and managing director, Ajay Singh, to pay $1 million a month for the next six months to Credit Suisse towards clearing its dues.

The low-cost airline is already paying $ 500,000 a month but Credit Suisse wanted the payment to be increased to $1.5 million.

Appearing for Singh, senior advocates Kapil Sibal, Shyam Divan and Vivek Tanka urged the court to permit him to pay $1 million for six months. It could order his arrest if Singh failed to comply with the undertaking, Sibal told the court.

The court doubled the monthly repayment to $1 million for six months and from the seventh month, SpiceJet can regularise its repayment.

The court also directed Singh to be present personally in court for the next hearing on October 20.

On September 15, SpiceJet transferred $1.5 million to Credit Suisse in keeping with an SC directive after the court warned Singh of “consequences”.

The court warned Singh that he would be sent to the Tihar jail in the capital for not following its order on paying Credit Suisse AG.

It asked Singh to pay $ 500,000 towards an instalment to the Swiss firm along with $1 million defaulted amount. A bench of Justices Vikram Nath and Ahsanuddin Amanullah said: "We have to move to the next drastic step. We are not worried even if you shut down."

On August 14, the court issued a contempt notice to Singh on a plea filed by Credit Suisse, accusing the carrier of failing to comply with a court-approved settlement plan for payment of dues.

The Swiss bank in April initiated contempt proceedings against SpiceJet after failing to comply with a court-approved settlement plan for the payment of dues.

SpiceJet and Credit Suisse entered into an agreement in May 2022 to resolve a payment dispute that arose from the airline’s non-payment of dues to SR Technics, a Switzerland-based company that provides aircraft maintenance services. SpiceJet defaulted on dues amounting to $20 million.

On today's order, the airline in its statement said "This is a positive outcome for the company and our stakeholders, and we are grateful to the Court for its understanding. We are committed to paying our dues in full and on time. We remain fully committed to upholding the highest standards of compliance and look forward to continuing our positive engagement with all stakeholders.”