SpiceJet and Engine Lease Finance have reached an out-of-court settlement
What's the story
Troubled budget airline SpiceJet and Engine Lease Finance Corporation Aviation Services Ltd. have reached an amicable agreement, putting a halt to proceedings in the Delhi High Court. During Monday's hearing, lawyers for both parties informed the court of the settlement and requested more time to finalize the details. The court granted their request, setting the next hearing for February 8, 2024.
Details
The terms of the settlement include payment and engine return
Under the terms of the settlement, SpiceJet must pay over $2 million (Rs. 16.65 crore) to Engine Lease Finance by January and return the leased engines by January 25. Although the engine lessor isn't required to reinstate the terminated lease with SpiceJet, it reserves the right to take legal action if the airline doesn't comply with the agreement.
Insights
Previously, Delhi HC had set October 16 as deadline
Earlier, the court had imposed an October 16 deadline on SpiceJet. The engine lessor had contended in court that SpiceJet should be prohibited from using the engines as it had given the airline enough time to rectify its payment issues before deciding to terminate the lease. In response, SpiceJet had requested an extension to settle the payment.
What Next?
SpiceJet is facing multiple legal challenges from lessors
SpiceJet is also facing legal challenges from several other lessors. The company recently informed the National Company Law Tribunal (NCLT) about its near settlement with aircraft lessor Celestial Aviation Services. Celestial Aviation is one of the four lessors who have taken SpiceJet to the NCLT due to unpaid dues. The other three are Willis Lease Finance Corp, Wilmington, and Aircastle.
Insights
The airline is involved in other ongoing legal disputes
Additionally, SpiceJet is involved in an arbitral award execution case with former SpiceJet promoter Kalanithi Maran over dues of Rs. 397 crore. The airline has already paid Maran Rs. 100 crore of the total amount owed. Moreover, SpiceJet is facing a legal challenge from Credit Suisse over a payment default. The Supreme Court had allowed the airline to make monthly payments of $1 million (Rs. 8.33 crore) to the Swiss bank for six months to settle its dues.