SpiceJet reaches settlement with lessor, case withdrawn from Delhi High Court.

New Delhi: Engine Lease Finance BV withdraws case against SpiceJet

Engine Lease Finance BV, one of the lessors of budget airline SpiceJet, has withdrawn its case against the airline after reaching an interim settlement. Under the terms of the settlement, SpiceJet is required to pay over $2 million to the engine lessor by January and return the leased engines by January 25. However, Engine Lease Finance is not obligated to revoke the terminated lease with the airline. If SpiceJet fails to comply with the agreement, Engine Lease Finance retains the right to take legal action again.

Background

Previously, the Delhi High Court had set a deadline until October 16 for SpiceJet to reach a settlement with Engine Lease Finance. The court had indicated that it may prevent the airline from using the leased engines if no resolution was reached. Engine Lease Finance argued in court that SpiceJet should be restrained from using the engines as it had given the airline enough time to rectify its payment issues before terminating the lease. SpiceJet requested more time to pay the settlement, citing that the engines were currently in use.

SpiceJet is also facing legal challenges in several other courts. The airline informed the National Company Law Tribunal (NCLT) that it is close to reaching a settlement with aircraft lessor Celestial Aviation Services. Celestial Aviation, along with Willis Lease Finance Corp, Wilmington, and Aircastle, has filed cases against SpiceJet in the NCLT over pending dues. Additionally, SpiceJet is involved in an arbitral award execution case with former owner Kalanithi Maran over dues of ₹397 crore. The airline has paid Maran ₹100 crore of the owed amount. In the Supreme Court, SpiceJet is facing a legal challenge from Credit Suisse over a payment default. The court has granted permission for the airline to make monthly payments of $1 million to settle its dues over the next six months.

Conclusion

SpiceJet and Engine Lease Finance Corporation Aviation Services Ltd have mutually decided to resolve their dispute outside of the courtroom. With the withdrawal of the case, SpiceJet must fulfill the terms of the settlement by January. Failure to comply may result in further legal action against the airline.

Summary:

• Engine Lease Finance BV has withdrawn its case against SpiceJet after reaching an interim settlement.
• SpiceJet must pay over $2 million to the engine lessor by January and return the leased engines by January 25.
• If SpiceJet fails to comply with the settlement, Engine Lease Finance retains the right to take legal action again.
• SpiceJet faces legal challenges in multiple courts, including the National Company Law Tribunal and the Supreme Court.
• The airline is close to reaching a settlement with Celestial Aviation Services and has paid ₹100 crore to former owner Kalanithi Maran.
• In the Supreme Court, SpiceJet has been granted permission to make monthly payments to Credit Suisse to settle its dues.