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Monday, September 26, 2022

Indian Court temporarily suspends SpiceJet wind up order

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The litigation between SpiceJet, a low-cost airline, and SR Technics, a Zurich-based MRO service provider, is still ongoing over $24 million in engine maintenance payments.

A lower court ruling directing the carrier to cease operations and settle the dispute has been temporarily postponed by the Supreme Court of India.

The Supreme Court postponed the Madras High Court ruling against SpiceJet on January 28, 2022, to allow the airline and Credit Suisse, a Swiss financial services business operating on behalf of SR Technics, to reach an agreement.

The ban, however, is just temporary, since the Indian carrier has been given three more weeks to remedy the issue.

SpiceJet and SR Technics are embroiled in a dispute after the low-cost carrier allegedly failed to adhere to the terms of a contract inked in November 2011 and pay $24 million for engine repair services on its Boeing 737 aircraft fleet.

The MRO company joined forces with Credit Suisse, which filed a lawsuit against SpiceJet, requesting that the airline’s assets be liquidated to cover claimed unpaid debts.

The airline fought the complaint, claiming that the Swiss company lacked clearance from the Indian Civil Aviation Authority (DGCA) to provide certain engine maintenance services. This would indicate that SR Technics had broken the contract’s conditions.

The Madras High Court ruled in favor of Credit Suisse in December 2021. The order provided the go-ahead for SpiceJet assets to be liquidated in order to make good on the outstanding payment. In response, the Indian airline filed an appeal, but the High Court dismissed it on January 11, 2022.

In late January 2022, the airline filed an appeal with the Supreme Court.

 

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