SpiceJet Crisis: Supreme Court Upholds Delhi High Court’s Decision To Ground Leased Engines

The Supreme Court on Friday refused to interfere with the order of the Delhi High Court that directed the low-cost airline to ground three engines leased to it by French lessors.

The dispute stems from the non-payment of dues owed to the lessors, Team France 01 SAS and Sunbird France 02 SAS, who had leased the engines to SpiceJet. As per court filings, the French companies claim that SpiceJet has outstanding unpaid dues exceeding $20 million, accumulated over more than two years.

The lessors filed the case against the airline in December last year, demanding payment and repossession of the leased engines.

Earlier this month, a division bench of the Delhi High Court declined to quash a single judge's order that grounded three engines leased to the airline by the two France-based lessors. Although the court refused to interfere with the single judge's order, it suggested that SpiceJet consider settling the matter with the lessors.

When the single judge delivered its judgment in August this year, it categorically stated that the inability of SpiceJet to pay the admitted outstanding dues is writ large on the face of the record, and permitting the airline to continue the use of engines without payment would only cause financial distress to the lessors. As per the high court's order, the airline has 15 days to return possession of the leased engines.

During the hearing before the top court today, SpiceJet said that it is in talks with the lessors and is ready to make payments. "Parties have met in Singapore, they are in talks, they (lessors) invited us to Singapore for the settlement talks," SpiceJet said.

The airline also informed the court that two out of the three leased engines are already grounded and not being used to fly. However, a specialised stand is required to hand them back to the lessors, and it will take at least a month to arrange for the said stand, SpiceJet said.

The top court stated that the parties can continue discussions over the weekend and return with updates on their talks.