India's National Company Law Appellate Tribunal (NCLAT) has overturned a National Company Law Tribunal (NCLT) ruling to prevent a lessor from inspecting four engines they have placed at the now grounded Go First (Mumbai International).
On August 18, the Delhi bench of the NCLAT reversed the July 24 NCLT order that blocked lessors from accessing their aircraft and engines. In last week's matter, the appellant was Engine Lease Finance BV, which has four engines at Go First. Anandh Venkatramani, counsel for the lessor, told the appellant tribunal that Go First's resolution professional had advised his client on June 5 that they would be able to inspect their engines, each valued at more than USD15 million, but had not yet provided an inspection date.
Venkatramani said the engines were sophisticated and expensive assets and engine lessors should be treated the same as aircraft lessors. India's Supreme Court recently said that aircraft lessors could inspect their planes after the resolution professional, the Indian equivalent of an insolvency administrator, commenced legal action to stop them.
In response to Venkatramani's arguments, Ramji Srinivasan, appearing for Shailendra Ajmera, the resolution professional, urged the NCLAT to uphold the NCLT's ruling that prevented Engine Lease Finance from inspecting their engines. However, the NCLAT rejected his arguments and found in favour of Engine Lease Finance. The appellate tribunal also said the NCLT should resolve outstanding matters brought to it by other lessors as soon as possible, given the value of the assets involved.
Go First suspended flights in early May. It is seeking to relaunch with a smaller fleet and network. However, difficulties raising working capital and increasingly assertive lessors wanting their aircraft and engines back are proving roadblocks.
