Tuesday, March 5, 2024

SC allows SpiceJet to make payments to Credit Suisse in instalments

New Delhi: In a relief to SpiceJet, the Supreme Court on Friday allowed the low-cost carrier to pay Credit Suisse $1 million per month for six months, and $500,000 per month thereafter, to clear its dues.

The apex court noted that SpiceJet is behind on monthly payment by $3 million.

Earlier this month, SpiceJet had made a payment of $1.5 million to Credit Suisse, following orders from the Supreme Court.

Credit Suisse informed the court that it has received the said payment.

“The Hon’ble Supreme Court has noted our compliance with its previous orders and agreed with our proposal to pay the $3 million arrears over the next 6 months. This is a positive outcome for the company and our stakeholders, and we are grateful to the Court for its understanding. We are committed to paying our dues in full and on time. We remain fully committed to upholding the highest standards of compliance and look forward to continuing our positive engagement with all stakeholders” SpiceJet said in a statement.

Switzerland-based Credit Suisse had filed a plea in March to initiate contempt proceedings against SpiceJet and its chairman and managing director Ajay Singh, citing alleged deliberate and intentional non-compliance with court orders and failure to settle a $3.9 million debt as stipulated in a prior settlement agreement between the parties.

Back in November 2011, SpiceJet, then owned by Kalanithi Maran, had signed a 10-year aircraft servicing and maintenance agreement with SR Technics, a Swiss maintenance, repair and overhauling (MRO) service provider.

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.

On 6 December 2021, a single-judge bench of the Madras High Court allowed the winding-up of SpiceJet under Section 433 (e) of the Companies Act 1956, and directed the official liquidator to take over the assets of the airline. The airline had challenged the order before a division bench. The division bench upheld the single judge’s order. The airline had then challenged the ruling in the Supreme Court, which stayed the high court order, and gave the company three weeks to settle the matter.

The Gurugram-based airline is involved in several legal disputes with respect to payment of dues across the lessor community and with former promoter Kalanithi Maran.

On 14 September, SpiceJet said it has completed the payment of 100 crore to Sun Group chairman Kalanithi Maran, as per the Delhi High Court’s order regarding the execution of an arbitral award. SpiceJet owed 397 crore to Maran, and the court is scheduled to hear the rest of the case next on 3 October.

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Updated: 22 Sep 2023, 01:47 PM IST

#SpiceJet #payments #Credit #Suisse #instalments

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