SpiceJet Appeal Denied by Supreme Court

SpiceJet's Appeal Falls Flat in Supreme Court

The Delhi High Court's orders compelling SpiceJet to return three aircraft engines to leasing special purpose vehicles Team France 01 SAS and Sunbird France 02 SAS have not been overturned by the Supreme Court of India. SpiceJet's appeal applications were denied by three Supreme Court judges, including the chief justice, who declined to intervene in the high court rulings.

Due to several years' worth of lease defaults, SpiceJet has been chased by the engine lessors. A single Delhi High Court judge recently ordered the budget airline to return the engines, and SpiceJet's unsuccessful appeal to a three-judge panel at the same court was later dismissed. The current situation was brought about by the airline's attempt to appeal the ruling before India's highest court.

According to Indian court documents, SpiceJet is still embroiled in several legal battles with lessors of airframes and engines before the Delhi High Court and the National Company Law Tribunal (NCLT), the nation's specialized bankruptcy court. On September 17th, SpiceJet submitted preliminary placement paperwork stating that 36 of its 58 aircraft were grounded due to lease conflicts and/or maintenance issues.

"Due to such extraneous circumstances, we have allegedly defaulted on payments of lease rentals to certain of our aircraft and engine lessors in respect of certain aircraft and engine leases," the filing reads. "Since the events of defaults have been alleged to have occurred and are continuing, aircraft and engine lessors have initiated legal proceedings against us. The defaults in aircraft and engine leases also provide the right to lessors to terminate the lease agreements, recover damages through court or enforcement proceedings, take possession of, sell or re-leasing the aircraft to which the lease agreement relates and require us to take the aircraft out of service or to ground the aircraft In certain instances."

The statement further states that SpiceJet is attempting to achieve agreements with all lessors and vendors in addition to fighting all ongoing bankruptcy cases in the NCLT. The preliminary placement document includes the INR 30 billion rupees (USD 359.4 million) that SpiceJet is attempting to raise. Of that amount, INR 7.5 billion (USD 89.5 million) will be used to pay off debts to financiers, engineering vendors, and lessors of aircraft and engines.