Delhi HC orders SpiceJet to pay $4 million to engine lessors by Feb 15.

SpiceJet, the low-cost carrier, has been ordered by the Delhi High Court to pay $4 million to its engine lessors, Team France 01 SA and Sunbird France 02 SAS, by February 15. The airline had requested additional time for payment and offered to pay $1 million upfront. However, SpiceJet is required to pay a total of nearly $11 million to the lessors. The lessors have rejected an offer to settle the dispute and now plan to pursue litigation against SpiceJet. The court had previously instructed the airline to pay $450,000 to the lessors by January 3, and SpiceJet has complied. However, the lessors are now seeking further payment to clear the outstanding amount. The lessors claim that the airline has not paid them $12.9 million over the past two years and has continued to use three engines despite the termination of the lease. The lessors have informed the court that if there is a default in payment, they can request that the engines be grounded within ten days. They have already received the first tranche of $90 million and expect to receive the next tranche of $4 billion in cash soon. Additionally, SpiceJet is facing insolvency applications from three other aircraft lessors before the National Company Law Tribunal due to non-payment of dues in 2023. The airline is also involved in a legal battle with Credit Suisse over non-payment of dues in the Supreme Court. In a positive development, SpiceJet recently announced that it has received Rs 744 crore as the first tranche of funds raised through the issuance of securities on a preferential basis. The airline plans to raise a total of Rs 2,250 crore through the issuance of securities. Furthermore, SpiceJet revealed that it currently has a substantial bank balance of over Rs 900 crore, including Rs 160 crore received under the government’s Emergency Credit Line Guarantee Scheme. In another development, the National Company Law Tribunal has dismissed an insolvency plea by aircraft lessor Wilmington Trust SP Services against SpiceJet. The NCLT stated that the plea has been dismissed and SpiceJet argued that Wilmington is not entitled to receive rental amounts as the invoices should be paid to Aircastle (Ireland) instead. Wilmington had filed the insolvency plea against SpiceJet in June 2023 over unpaid dues, and three planes belonging to SpiceJet were deregistered by the Directorate General of Civil Aviation in May 2023 at the request of the lessors.

The Delhi High Court has recently ordered SpiceJet, a prominent Indian airline, to pay $4 million to engine lessors by February 15. The ruling comes after the lessors claimed that the airline had failed to honor its lease agreements. The court’s decision aims to ensure that the lessors receive their rightful dues in a timely manner. Failure to comply may result in further legal consequences for SpiceJet.

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