Engine Lease Finance BV has reached an interim settlement with SpiceJet (SG, Delhi International) in which the lessor has agreed to drop a stay application in exchange for the airline paying it over USD2 million by the start of next year and returning an aircraft engine by January 25, 2023.
Last week, counsel for both parties told the Delhi High Court of the interim settlement. ch-aviation had reported that Engine Lease Finance had filed a petition with the court on September 27, 2023, "seeking direction" in the matter. During an October 6 hearing, the court urged both parties to negotiate an agreement before the next hearing date - October 16. Otherwise, the court said it would be compelled to issue an injunction preventing SpiceJet from using the engine. During the mid-October hearing, the engine lessor told the court that SpiceJet had defaulted on nine engine lease agreements. While SpiceJet had returned eight of the nine engines, one remained at the airline.
"SpiceJet and Engine Lease Finance Corp Aviation Services Ltd have mutually decided to resolve the dispute through amicable means, outside of the courtroom," reads a statement from the low-cost carrier concerning the agreement.
As part of the interim settlement, Engine Lease Finance retains the right to return to court if SpiceJet fails to live up to the agreement. SpiceJet had argued for time to withdraw the remaining engine from use. The matter returns to court for mention on February 8, 2023.
SpiceJet faces legal challenges from several lessors in different courts around India. Winding up petitions filed by Wilmington Trust SP Services (Dublin), Willis Lease Finance, and Aircastle remain active. However, the airline has also successfully settled other cases, including those filed by Celestial Aviation Leasing, SPVs owned by Carlyle Aviation Partners, Nordic Aviation Capital, and real estate company Acres Buildwell. A SpiceJet spokesperson has previously said the airline aims to settle its lease disputes out of court on a case-by-case basis.
