SpiceJet said in a statement: "With regard to the dispute pending between Credit Suisse and SpiceJet Limited, we would like to inform that the parties have now reached an in-principle commercial settlement of the dispute and the process of documentation is underway.
"The settlement with Credit Suisse follows SpiceJet’s settlements with De Havilland Aircraft of Canada Limited (DHC), Boeing, aircraft lessors CDB Aviation and Avolon.
"SpiceJet had already deposited $5 million on the direction of the Madras High Court in the Credit Suisse case and there is no adverse financial liability on the Company. The settlement involves payment of settlement amount over a mutually agreed period of time", it said.
Case so far
The Supreme Court granted three weeks in end-January to SpiceJet to resolve financial dispute with Swiss firm Credit Suisse AG and stayed the Madras High Court order on its winding up, saying that it was a "serious matter" and the airlines cannot say it is a busy organisation and would not pay, PTI had reported earlier.
According to the Swiss firm, SpiceJet had availed the services of SR Technics, Switzerland, for maintenance, repair, and overhauling of aircraft engines, modules, components, assemblies, and parts, which were mandatory for its operations.
An agreement for such services for 10 years was entered into between SpiceJet and SR Technics on November 24, 2011. The terms of payments were also agreed upon. On August 24, 2012, a supplement pact was also entered into to change certain terms of the agreement.
The amendments included an extension of time for payment of money due under various invoices raised by SR Technics and also a deferred payment scheme. As there was a general increase in the cost, the 2012 supplemental agreement included adjustment of flight hour rates, and escalation provisions were also made.
The Swiss firm had been making repeated requests to SpiceJet to make payments under the various invoices. Since it did not honour its commitment under the agreements with SR Technics and that it was not in a position to meet its financial obligations, the Swiss firm had issued a statutory notice.
As there was no response, it preferred the company petition before the High Court to wind up SpiceJet and obtained a favourable order. Aggrieved, SpiceJet preferred the appeal before the Division bench which came to be dismissed on January 11.
SpiceJet contended it had entered into an agreement with the Swiss company for a period of 10 years in 2011.
However, midway, it discovered that the aircraft maintenance company did not have a valid authorisation from the Director-General of Civil Aviation between January 1, 2009, and May 18, 2015, the airline had said in its appeal.
The single judge had wrongly assumed SpiceJet had entered into the agreement despite knowing about the absence of DGCA approval and held that it could have terminated the agreement midway once it came to know of the absence of the official authorisation, the low-cost airline had said.
Termination was not a mandatory requirement. Once it (SpiceJet) came to know the fact, it stopped payments.
There was no finding in the arbitral award that the air carrier was aware of the non-approval even before entering into the agreement, the appeal said, adding that an 'illegal claim' for dues would not come under the definition of 'debts' as stated in the Companies Act, it had said.
(With PTI inputs)
