Supreme Court to Rule on Jet Airways Ownership Dispute

India’s Supreme Court has reserved its judgment regarding a plea from the State Bank of India and other creditors of Jet Airways (JAI) to overturn a decision by the National Company Law Appellate Tribunal (NCLAT) that upheld the airline’s resolution plan and the ownership transfer to the Jalan Kalrock consortium (JKC).

The creditors are urging the Supreme Court to utilize its powers under Article 142 of the Indian Constitution to order the liquidation of Jet Airways, claiming that the resolution plan has failed to deliver on its promises. Jet Airways ceased operations in 2019, and in 2021, the National Company Law Tribunal approved the consortium’s acquisition of the airline after both parties agreed on a resolution plan ratified by the court to guide the sale process.

This resolution plan was contingent upon JKC meeting specific conditions, which the creditors argue it has failed to fulfill. As a result, the ownership transfer has become entangled in litigation and remains unfinalized.

During a hearing on October 16, a three-judge panel opted not to make a decision and instead deferred the matter to a future date. Other parties appealing the NCLAT’s decision include Punjab National Bank and JC Flowers Asset Reconstruction Private Limited.

Counsel representing the lenders argued this week that JKC has defaulted on the required payments, asserting that the resolution plan has “failed miserably.” Conversely, JKC’s counsel contended that the banks are now aiming for liquidation rather than facilitating a sale, claiming they are intentionally obstructing the process.

The Supreme Court’s ruling could either affirm that JKC has adhered to the resolution plan’s terms and is entitled to assume ownership of Jet Airways, or it could determine that the consortium has not complied, potentially voiding the resolution plan and paving the way for either a new resolution or the airline’s liquidation.

The case, titled State Bank of India v. the Consortium of Mr. Murari Lal Jalan and Mr. Florian Fritsch (case no: 005023 – 005024/2024), is anticipated to return to court within the next week.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com