SpiceJet, Credit Suisse end dispute over unpaid dues

SpiceJet said it had already provided a bank guarantee of $5 million on the direction Madras High Court

The apex court had given both parties time to settle the matter out of court.

The case has its origins in November 2011 when the Ajay Singh-led airline signed a 10-year aircraft servicing and maintenance agreement with SR Technics, a Swiss maintenance, repair and overhauling (MRO) service provider. The Swiss company had issued invoices, and the airline had issued seven bills of exchange to cover the money owed on the invoices. In September 2012, SR Technics entered into a finance agreement with Credit Suisse, assigning the lender all of its current and future rights to receive payments under the agreement.

However, after the airline failed to make payments of over $24 million, Credit Suisse filed a winding-up petition against SpiceJet in the Madras High Court last year.

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 challenged the order before a division bench.

The division bench upheld the single judge’s order. The airline then challenged the ruling in the Supreme Court, which stayed the high court order to wind up the airline, and granted the company three weeks to settle the matter. However, the final settlement took longer.

In its statement on Wednesday, SpiceJet said it had already provided a bank guarantee of $5 million on the direction of the Madras High Court, and there is no adverse financial liability on the company. The settlement involves payment of certain amount upfront and the balance over a mutually agreed timeline, the company said, without sharing more details.

“The settlement with Credit Suisse follows SpiceJet’s successful settlements and performances therein with De Havilland Aircraft of Canada Ltd (DHC), Boeing, CDB Aviation, BOC Aviation and Avolon, and provides an impetus to normalization, growth and expansion of the airline,” the company said.