The Supreme Court strongly criticized SpiceJet for its failure to settle outstanding dues to Credit Suisse in a stern move on Monday, February 19, directing the low-cost airline to make the payment by March 15. The court further directed SpiceJet's chairman, Ajay Singh to be present in court, a week after the stipulated payment date.
Concerns Raised About SpiceJet's Bid for Go First
The Supreme Court expressed concern over reports of SpiceJet's collaboration with Busy Bee Aviation Private Limited in a bid to acquire the bankrupt airline Go First. Questioning Singh's financial capacity for such an acquisition while neglecting overdue payments, the court warned against further delays.
Earlier on Friday, February 16, SpiceJet and Busy Bee Airways Private Limited, jointly submitted a bid for Go First, the company announced through an exchange filing.
Court Directs Immediate Payment to Credit Suisse
SpiceJet was directed to pay USD 1.25 million to Credit Suisse, the global investment bank, by March 15. This decision came after Credit Suisse informed the court that they were expecting USD 15 million by February 15 but only received USD 13.75 million.
Legal Dispute From 2011 Aircraft Servicing Agreement
The legal dispute had its roots in the 2011 aircraft servicing agreement when SpiceJet, under the ownership of Kalanithi Maran, entered into a 10-year agreement with Swiss company SR Technics. SpiceJet failed to make payments, leading to over USD 24 million in dues and a winding-up petition filed by Credit Suisse in 2021.
SpiceJet's Recent Bid Amid Financial Challenges
Despite facing financial challenges and outstanding payments, SpiceJet recently made headlines with Singh's joint bid with Busy Bee Aviation to acquire Go First. Singh reportedly sees potential in Go First's land assets and expects compensation from Pratt & Whitney for faulty engines.
Court's Previous Orders and Ongoing Resolution Process
The dispute dates back to an unpaid engine maintenance and repair agreement inked in 2011, during the tenure of former promoter Kalanithi Maran at SpiceJet. The finalized agreement with SR Technics on November 24, 2011, covered services over a 10-year period with agreed-upon payment terms. An additional agreement on August 24, 2012, modified certain terms of the original contract.
According to the Swiss firm, SpiceJet availed SR Technics' services for the maintenance, repair, and overhaul of essential aircraft components. In 2013, Credit Suisse filed a case in the Madras High Court, alleging SpiceJet's failure to settle bills exceeding USD 24 million for aircraft engine and component maintenance, repair, and overhaul.
Supreme Court Intervenes, Stays Winding-Up Order, and Awaited Resolution
The Supreme Court intervened, staying the Madras high court's winding-up order, providing SpiceJet with an opportunity to resolve its dispute with Credit Suisse AG. As of now, the resolution process is yet to reach a conclusion.
