SpiceJet Ordered to Pay ₹317mn in Hajj Dispute
India’s Delhi High Court has ruled that SpiceJet must pay INR317 million (USD3.77 million), along with interest, to Aerocare Aviation Services Pvt. Ltd. and related plaintiffs. The judgment, issued by Justice Neena Bansal Krishna, concludes an eight-year legal battle over a terminated agreement for Hajj operations. The court found that SpiceJet had “fraudulently and illegally” canceled the plaintiffs’ services, despite prior commitments.
Lawsuit Origins: Hajj Operations Agreement
The legal dispute traces back to 2016, when SpiceJet entered into a contract with Aerocare Aviation Services to manage its Hajj flight operations. As part of this agreement, Aerocare was responsible for logistics and planning, mobilizing resources across India, Saudi Arabia, and the UAE to prepare for SpiceJet’s Hajj services. Despite the plaintiffs’ significant investments in time and resources, SpiceJet canceled the agreement in July 2016, citing operational restrictions imposed by the Hajj Committee of India (HCoI).
Plaintiff’s Efforts and Legal Challenge
Under the terms of their arrangement, Aerocare was to handle multiple facets of SpiceJet’s Hajj operations, including coordinating with Saudi-based agents, sourcing aircraft and crews, and negotiating ground handling agreements. The plaintiffs argued that they had communicated every step to SpiceJet, who consistently acknowledged the progress.
When SpiceJet canceled the contract, Aerocare pursued legal action, seeking compensation for its investments and damages. Bhuvan Mishra, Aerocare’s counsel, noted that the court’s decision “reaffirms the need for fairness and accountability in corporate partnerships.”
SpiceJet’s Grounds for Cancellation
SpiceJet’s defense centered on two primary arguments. First, they claimed that HCoI viewed Aerocare as a “subcontractor,” and Hajj operational rules prohibit subcontracting. However, during court proceedings, Aerocare clarified its designation as a “service provider,” a distinction accepted by HCoI. The second argument revolved around HCoI’s alleged concerns over Aerocare’s involvement with Dynamic Airways, a US-based carrier with a questionable operational history. Aerocare immediately refuted these allegations, and HCoI accepted their clarification. Despite this, SpiceJet proceeded with the termination, attributing its decision to regulatory advice.
High Court’s Ruling in Favor of Aerocare
Justice Krishna concluded that SpiceJet’s claims of subcontracting restrictions and Aerocare’s unfitness were mere pretexts to avoid honoring the contract. The court found sufficient evidence showing that the contract was binding and that SpiceJet had benefited significantly from Aerocare’s expertise and network. Justice Krishna also observed that SpiceJet had leveraged Aerocare’s resources to navigate the complex Hajj charter operations, benefiting from their connections and experience without fulfilling financial commitments.
“The acts and language in the letter of intent confirm that a legally binding contract was indeed established between the parties,” the judge ruled. She dismissed SpiceJet’s claims as attempts to evade payment, describing them as “a ploy to avoid payment for services rendered.”
Compensation and Interest
In addition to awarding INR317 million in damages, the court imposed an 8% per annum interest rate from the claim’s filing date in August 2016 until payment is fulfilled. This judgment holds SpiceJet accountable for its contractual obligations and sets a precedent for corporate accountability in partnership agreements.
Context: SpiceJet’s Hajj Market Aspirations
The case is emblematic of SpiceJet’s broader efforts to gain a foothold in the Hajj operations market. Initially rejected in 2012 due to lack of experience, SpiceJet sought Aerocare’s support to secure Hajj flight rights in 2016. While they succeeded in obtaining the necessary permissions, the fallout from the contract cancellation has culminated in this substantial court-ordered payout, underscoring the importance of transparent and fair business practices.
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com