Alterna Capital Partners Moves to Declare SpiceJet Insolvent Over Unpaid Debts

Alterna Capital Partners, through its special purpose vehicle (SPV) Alterna Aircraft V B Limited, has initiated legal proceedings to have Indian airline SpiceJet declared insolvent. This action follows a judgement by the UK High Court in March 2023, which awarded Alterna more than USD 11 million in a dispute involving two Boeing 737-800 aircraft.

The case, filed on December 23, was brought before the Delhi bench of the National Company Law Tribunal (NCLT) on January 4. The lessor is seeking to recover USD 11.1 million and GBP 265,000 (USD 337,850) from SpiceJet, an amount awarded by Justice Bright at the Commercial Court of the High Court of England and Wales. The dispute centers around two aircraft, VT-SXD and VT-SXE, with the former already stored at Hyderabad International Airport and the latter still in operation by SpiceJet.

Representing Alterna, Kevic Setalvad argued before the NCLT that since SpiceJet had neither appealed nor paid the dues, the judgement had reached finality under India’s Insolvency and Bankruptcy Code (IBC). Setalvad proposed declaring SpiceJet insolvent as a means for Alterna to recover the owed funds.

In response, SpiceJet’s counsel, Krishnendu Datta, contended that the IBC should not be used as a mechanism for fund recovery and claimed that Alterna’s petition was not maintainable.

This development adds to the growing list of lessors, including Aircastle, Celestial Aviation Services, and Wilmington Trust SP Services (Dublin), seeking insolvency petitions against SpiceJet at the NCLT. While SpiceJet has either settled or contested previous claims, including a notable victory against engine lessor Willis Lease Finance, the airline now faces escalating legal pressures.

Alterna joins four other lessors currently involved in lawsuits against SpiceJet in Delhi’s High Court, seeking either to enforce orders or recover assets. According to ch-aviation fleets advanced data, approximately half of SpiceJet’s fleet of 65 aircraft are leased, involving a total of 13 lessors, including Alterna Capital Partners.

The case of Alterna Aircraft V B Limited v. SpiceJet Limited is scheduled for a subsequent hearing at the NCLT on February 8, marking a critical juncture for both the airline and its lessors.