The Supreme Court of India has refused to overturn Delhi High Court decisions ordering SpiceJet (SG, Delhi International) to return three aircraft engines to leasing special purpose vehicles Team France 01 SAS and Sunbird France 02 SAS.
On September 20, three Supreme Court judges, including the chief justice, declined to interfere with the high court decisions and dismissed SpiceJet's petitions to appeal them.
The engine lessors have pursued SpiceJet over lease defaults dating back several years. Recently, ch-aviation covered a decision by a single Delhi High Court judge ordering the low-cost carrier to return the engines and the subsequent unsuccessful appeal by SpiceJet to a three-judge panel at the same court. The airline attempted to appeal that decision in India's top court, resulting in the current outcome.
Indian court records show SpiceJet remains entangled in numerous legal disputes with airframe and engine lessors in the Delhi High Court and the country's specialist bankruptcy court, the National Company Law Tribunal (NCLT). On September 17, a preliminary placement document filed by SpiceJet revealed 36 out of its 58 aircraft were grounded owing to lease disputes and/or a lack of maintenance.
"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 provides right to lessors to terminate the lease agreements, recovering damages through court or enforcement proceedings, taking possession of, selling or re-leasing the aircraft to which the lease agreement relates and requiring us to take the aircraft out of service or to ground the aircraft In certain instances."
The filing adds that SpiceJet is defending all active insolvency proceedings in the NCLT while also working to reach settlements with all lessors and vendors.
The preliminary placement document deals with SpiceJet's bid to raise INR30 billion rupees (USD359.4 million), of which it intends to use INR7.5 billion (USD89.5 million) to settle creditor liabilities, including monies owed to aircraft and engine lessors, engineering vendors, and financiers.
