Flight caterer sues India’s SpiceJet over alleged debt

SpiceJet (SG, Delhi Int’l) is facing yet another court case over alleged unpaid debts, this time as SkyGourmet, one of India’s biggest flight caterers, sues the cash-stretched low-cost carrier at the country’s corporate adjudicator, the National Company Law Tribunal (NCLT), to recover more than INR10.3 million rupees (USD140,000), two sources told the newspaper Business Line.

SkyGourmet and SpiceJet have exchanged multiple correspondences on the matter over the last year, but when the caterer felt it was failing to achieve a resolution, it decided to take the airline to the tribunal’s New Delhi bench.

It filed an application under Section 9 of the Insolvency and Bankruptcy Code, through which an operational service provider can demand to get paid if it does not receive payment from a corporate client.

However, SpiceJet told the newspaper: “We are having a running relationship with them, and the matter is being settled out of court.”

While SpiceJet has been battling a major cash crunch over the last 18 months and has been receiving notices from entities such as the Airports Authority of India and the Goods and Services Tax Council, among others, SkyGourmet has been suffering too.

Jet Airways’ abrupt cessation of flight operations in April 2019 dealt it a heavy blow, as the restarting carrier continued to owe it INR370.69 million (USD5 million) as of October 2020. SkyGourmet recently shut down its operations at Delhi Int’l and Mumbai Int’l airports, according to Business Line.

For almost ten years, SkyGourmet had been a fully-owned subsidiary of Swiss company gategroup, but the group’s most recent annual report, for 2020, said it had “disposed of its 100% shareholdings in Gate Gourmet India Private Ltd, SkyGourmet Catering Private Ltd, and New India Glass Works (Calcutta) Pvt Ltd” and that “the transaction included a payment of CHF2.5 million [USD2.74 million] to the purchaser, whereas the net assets disposed of were CHF8.9 million [USD9.77 million].”

SpiceJet and SkyGourmet did not immediately respond to ch-aviation’s request for comment.