After contempt plea in SC from Credit Suisse, SpiceJet now faces bankruptcy case in NCLT

SpiceJet has become the latest airline in India, after GoFirst, to face bankruptcy proceedings. Ireland based aircraft lessor Aircastle Ltd has moved the Principal Bench of NCLT to launch bankruptcy process against the airline.

NCLT has agreed to hear the plea by the lessor. NCLT has also issued a notice to the airline seeking its reply. NCLT has scheduled the next hearing of the plea on May 17, allowing SpiceJet a little over a week to respond.

The lessor is seeking initiation of corporate insolvency proceedings against the airline, claiming default in payment of dues.

We reached out the airline. Spicejet sought to assure that talks for settlement are underway.

The airline in a statement said, “In the Aircastle issue, notice was issued in normal course. There was no adverse ruling against SpiceJet. The court has recognised the fact that parties are under settlement discussions and they can continue to pursue the same.”

In a statement last week, the airline had clarified that the SpiceJet fleet did not consist of any aircraft from the lessor. It had further maintained that all the aircraft had been returned to the lessor.

The bankruptcy case against SpiceJet comes at a time, when it is already facing a plea by Credit Suisse in SC, alleging contempt of court. In Aug 2022, the SpiceJet and Credit Suisse had agreed to settle a payment dispute of USD 24 million. But in April of 2023, Credit Suisse moved SC alleging that the airline had failed to pay USD 4.9 million, as per the terms of settlement.

In the proceedings before SC, the airline’s counsel assured that Supreme Court that it will release one tranche of payment in April and the subsequent tranche in May.

On May 17, the SC will hear Credit Suisse contempt plea to verify the payment status. The NCLT will also hear the insolvency plea filed by lessor against SpiceJet on May 17.

In a clarification to the Credit Suisse contempt plea, SpiceJet said, "SpiceJet Limited and Credit Suisse AG had reached a settlement agreement last year. The settlement involves payment of certain amount upfront and balance amount over a mutually agreed timeline. The tenure of the payment schedule is till August 2025."