SpiceJet is encountering fresh legal difficulties as Sunbird France 02 SAS, an aircraft engine lessor, has approached the Delhi High Court to enforce a UK court ruling. This judgment orders the airline to pay approximately $8 million in overdue lease rentals and maintenance fees associated with three aircraft engines, further complicating SpiceJet's already precarious financial situation.
The case was presented to Justice Vikas Mahajan, who requested SpiceJet to submit an affidavit detailing its assets. However, SpiceJet's counsel, senior advocate Amit Sibal, requested additional time to gather instructions regarding the asset disclosure.
The next court session is scheduled for Monday, where the focus will be on whether SpiceJet should be mandated to reveal its assets. Sibal contended that immediate asset disclosure could jeopardize the airline's operations, emphasizing that SpiceJet is a functioning airline with around 135 daily flights, serving approximately 21,000 passengers, and employing about 6,400 staff members.
Legal Arguments: Sibal argued against the immediate asset disclosure, raising concerns that such a requirement could complicate other ongoing legal matters involving the airline.
On behalf of Sunbird, senior advocate Rajshekhar Rao sought interim protections, clarifying that the lessor is not attempting to halt SpiceJet's operations but is seeking assurances during the ongoing legal proceedings. Rao highlighted that despite outstanding debts, SpiceJet had made advance salary payments to its chairman.
The dispute originates from a ruling by the Commercial Court in London on March 13, which found that SpiceJet had ceased rental payments since January 2022, with only a single payment made in May 2024. The lessor also claimed that SpiceJet failed to pay maintenance accruals since November 2020.
Sunbird had repossessed the engines in phases following SpiceJet's defaults, with two engines taken back in December 2022 and the third in July 2023. The UK court ultimately ruled in favor of Sunbird, issuing a summary judgment due to SpiceJet's lack of defense in the proceedings.
Broader Implications: This latest legal challenge adds to SpiceJet's ongoing legal troubles, including a protracted arbitration dispute with Kalanithi Maran and KAL Airways over unpaid dues. The airline previously informed the Supreme Court of India that it would settle its debts once it receives government support under a proposed financial package aimed at assisting airlines with rising operational costs.
The Supreme Court has acknowledged SpiceJet's financial constraints and granted interim relief, directing the Delhi High Court to reassess its requests.
