SpiceJet Escapes Aircraft Lessor’s Insolvency Plea as NCLT Adjourns the Case
New Delhi, June 19, 2023 – In a recent development, the National Company Law Tribunal (NCLT) has adjourned the insolvency plea filed by aircraft lessor Wilmington SP Trust Services against SpiceJet, one of India’s leading budget airlines. The case has been listed for further hearing on July 17, providing temporary relief to SpiceJet.
The senior counsel representing SpiceJet put forth an argument stating that Aircastle (Ireland) and Wilmington SP Trust Services were essentially the same entity, thereby implying that Aircastle (Ireland) had filed the third petition in this case. Aircastle (Ireland) had previously filed two separate petitions seeking to initiate a corporate insolvency resolution process against the airline. The lawyer claimed that the invoices raised by Wilmington for aircraft leases were in the name of Aircastle (Ireland), further supporting their argument.
However, the counsel representing Wilmington countered this claim by asserting that the Directorate General of Civil Aviation had registered Wilmington as a separate entity from Aircastle (Ireland). Therefore, according to their argument, the two entities cannot be treated as the same.
The NCLT had previously raised questions about the maintainability of the second insolvency plea filed by Aircastle (Ireland) on June 13. The tribunal questioned whether it was appropriate for the same operational creditor to file two separate petitions against the same corporate debtor. It requested the petitioner to satisfy the court on this matter.
NCLT Scheduled a hearing for petitions
Currently, the NCLT has scheduled the hearing for the two insolvency petitions filed by Aircastle (Ireland) and the one filed by Wilmington SP Trust Services on July 17. Additionally, Engine leasing company Willis Lease Finance Corp has lodged an insolvency plea against SpiceJet, adding to the mounting legal challenges faced by the airline. The hearing of the case scheduled on July 4.
These series of insolvency pleas against SpiceJet have caused concern within the aviation industry and among the airline’s stakeholders. SpiceJet, a prominent player in the Indian aviation market, has been grappling with financial challenges exacerbated by the COVID-19 pandemic. Like many other airlines worldwide, SpiceJet faced a significant downturn in passenger traffic and revenue during the pandemic, leading to financial strain.
Industry experts and stakeholders will closely watch the outcome of the insolvency proceedings. The adjournment of the case provides a brief respite for SpiceJet, allowing the airline additional time to explore potential resolutions and address the concerns raised by the aircraft lessors and engine leasing company.
SpiceJet has not issued an official statement regarding the adjournment of the case or the multiple insolvency pleas. The stability and future growth of SpiceJet will depend on how the airline navigates these legal challenges and addresses the insolvency pleas filed against it by aircraft lessors and engine leasing companies. It remains how SpiceJet will overcome these obstacles and ensure its stability and future growth.
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