SpiceJet, one of the prominent airlines in India, is now facing bankruptcy proceedings following a move by Irish aircraft lessor Aircastle Ltd. The lessor has approached the Principal Bench of the National Company Law Tribunal (NCLT) to initiate the bankruptcy process against SpiceJet.
The NCLT has agreed to hear the plea made by Aircastle Ltd and has issued a notice to SpiceJet, requesting a response from the airline. The next hearing for the plea is scheduled for May 17, giving SpiceJet a little over a week to provide its reply.
Spicejet’s Bankruptcy Proceedings As Aircastle Seeks Initiations of Corporate Insolvency
Aircastle Ltd, the lessor, is seeking the initiation of corporate insolvency proceedings against SpiceJet due to alleged default in payment of dues. This development comes after another Indian airline, GoFirst, faced similar bankruptcy proceedings.
SpiceJet will now have to address the allegations and respond to the plea in order to navigate through the bankruptcy proceedings. The outcome of the hearing on May 17 will shed more light on the future course of action for the airline.
In a statement, the airline clarified, “In the Aircastle issue, notice was issued in normal course. There was no adverse ruling against SpiceJet. The court has recognised the fact that parties are under settlement discussions and they can continue to pursue the same.”
SpiceJet’s Legal Issues Against Credit Suisse
In addition to the bankruptcy proceedings, SpiceJet is also facing a separate legal issue involving a plea by Credit Suisse in the Supreme Court (SC) of India. The plea alleges contempt of court by the airline.
In August 2022, SpiceJet and Credit Suisse had reached an agreement to settle a payment dispute amounting to USD 24 million. However, in April 2023, Credit Suisse filed a plea in the SC claiming that SpiceJet had failed to pay USD 4.9 million as per the terms of the settlement.
During the proceedings in the SC, SpiceJet’s legal representative assured the court that the airline would release one installment of payment in April and the remaining installment in May, in compliance with the settlement agreement.
The contempt of court plea by Credit Suisse adds another legal challenge for SpiceJet, which is already dealing with the bankruptcy proceedings initiated by Aircastle Ltd. The airline will need to address these legal matters and fulfill its obligations to resolve the disputes with both Credit Suisse and Aircastle Ltd. The outcomes of these cases will determine the future course of action for SpiceJet.
