SpiceJet-Credit Suisse Dispute: Supreme Court Issues Contempt Notice To CMD Ajay Singh
The court says the confidence of the creditor must be restored.
The Supreme Court issued a notice to SpiceJet Ltd. on Monday in a contempt petition by Credit Suisse Group AG against the beleaguered airline for failing to pay its dues in accordance with a court-approved settlement agreement.
Appearing for SpiceJet, Senior Advocate Shyam Divan said an additional $2,00,000 had been deposited this month. This was over and above the $5,00,000 it has undertaken to deposit every month.
Divan requested the top court not to issue a notice in the matter because the airline had been depositing its dues every month since April.
Arguing for Credit Suisse, Senior Advocate Siddhartha Dave said the airline owed $6.5 million to the Swiss investment bank. However, it has only deposited a little over $2 million so far.
The apex court had been granting breathers to the airline since April, based on SpiceJet's assurances to deposit $5,00,000 every month. However, it was not inclined to grant one this time.
The court said the confidence of the creditor must be restored. The case will now come up for a hearing after four weeks.
In May last year, SpiceJet and Credit Suisse entered into a settlement agreement, which was subsequently approved by the top court.
The dispute emanates from an aircraft maintenance agreement that SpiceJet entered into with Switzerland-based SR Technics in 2011. Later, SR Technics signed a financing agreement with Credit Suisse. This gave Credit Suisse the right to get paid for invoices raised against SpiceJet for maintenance and repair of the aircraft.
In December 2021, the Madras High Court ordered the winding up of SpiceJet on the grounds that it failed to clear debt owed to Credit Suisse. This led to the matter landing in the top court, where both sides finally agreed to settle the dispute.
In a media statement, SpiceJet's spokesperson said that the payment of the settlement amount was subject to the RBI's approval and that the airline could not start the payment as per the applicable schedule under the consent terms for a few months till the approval was granted.
"The shortfall of $4.4 million pertains to the period when RBI approval was still awaited. The Company intends to pay this ($4.4 million) and the remaining balance amount as per the applicable schedule," the statement said.
