NEW DELHI : The Supreme Court came down heavily on SpiceJet for failing to clear its outstanding dues to Credit Suisse and ordered the low-cost airline to settle all pending payments by 15 March.
The court on Monday directed SpiceJet to pay $1.25 million to Credit Suisse, along with monthly installments. Additionally, SpiceJet’s chairman and managing director, Ajay Singh, has been summoned to appear before the court on 22 March.
The apex court took note of reports indicating that SpiceJet, in collaboration with Busy Bee Aviation Pvt. Ltd, has submitted a bid to acquire bankrupt airline Go First. The court questioned Singh’s capacity to finance the acquisition while neglecting SpiceJet’s overdue payments, cautioning that further delays would not be tolerated.
This came after Credit Suisse informed the Supreme Court that it was to receive $15 million from SpiceJet by 15 February 15 but had received only $13.75 million.
In March last year, Credit Suisse filed a petition to initiate contempt proceedings against SpiceJet and its Singh, alleging intentional non-compliance with court directives and failure to settle outstanding dues.
The court issued a notice to SpiceJet in August in the case. But it allowed the airline until September to initiate payments of $1 million per month for six months to Credit Suisse to rectify the dues, followed by monthly payments of $500,000, noting that the airline was behind on monthly payments by $3 million.
The legal dispute with Credit Suisse traces back to November 2011 when SpiceJet, then under the ownership of Kalanithi Maran, entered into a 10-year aircraft servicing agreement with SR Technics, a Swiss company providing maintenance, repair and overhaul services for aircraft.
The Swiss firm had issued invoices, while SpiceJet issued seven bills of exchange to cover the debt. In September 2012, SR Technics formally handed over all rights to receive payments under the SpiceJet deal to Credit Suisse. However, the airline failed to make payments of over $24 million, prompting Credit Suisse to file a winding-up petition against SpiceJet in the Madras High Court in 2021.
Despite grappling with financial challenges and pending payments to various creditors, SpiceJet garnered attention recently due to Singh’s joint bid with Busy Bee Aviation to acquire Go First.
According to people familiar with his plans, Singh sees potential in the land assets of Go First, estimated to be worth around ₹10,000 crore, and an expected compensation from engine manufacturer Pratt & Whitney for engine grounding.
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Published: 19 Feb 2024, 07:48 PM IST