Alterna Capital Partners Moves to Declare SpiceJet Insolvent Over Unpaid Debts

Alterna Capital Partners has taken a significant legal step against SpiceJet (SG, Delhi International), seeking to have the airline declared insolvent at India’s National Company Law Tribunal (NCLT). This move comes as an attempt by Alterna, through its special purpose vehicle (SPV) Alterna Aircraft V B Limited, to enforce a March 2023 UK High Court judgement that awarded the lessor more than USD 11 million.

The case, filed on December 23, was brought before the Delhi bench of the NCLT on January 4. Alterna is pursuing SpiceJet for a sum of USD 11.1 million and GBP 265,000 (USD 337,850), as ordered by Justice Bright at the Commercial Court of the High Court of England and Wales. The dispute centers on two B737-800 aircraft, previously registered as VT-SXD (msn 34801) and VT-SXE (msn 34802).

Kevic Setalvad, representing Alterna in Delhi, argued that since SpiceJet neither appealed the UK court order nor paid the due amount, the judgement had reached finality. Therefore, according to Setalvad, the debt falls under the definition of a financial debt as per India’s Insolvency and Bankruptcy Code (IBC). He advocated for declaring SpiceJet insolvent to enable the recovery of the owed sum.

On the other hand, SpiceJet’s counsel, Krishnendu Datta, countered that Alterna’s petition should be dismissed, asserting that the IBC is not a tool for debt recovery and that Alterna’s claim is not maintainable under it.

Alterna joins other lessors like Aircastle, Celestial Aviation Services, and Wilmington Trust SP Services (Dublin), all of whom have filed insolvency petitions against SpiceJet. SpiceJet has previously managed to settle claims or contest them successfully, including a notable victory against Willis Lease Finance.

Additionally, there are ongoing lawsuits against SpiceJet in Delhi’s High Court, with lessors seeking to enforce orders or recover assets. According to ch-aviation fleets advanced data, around half of SpiceJet’s 65 aircraft are leased from a total of 13 lessors, including Alterna Capital Partners.

The case of Alterna Aircraft V B Limited v. SpiceJet Limited is scheduled for a hearing at the NCLT on February 8, marking a critical juncture in this legal battle that could have significant implications for SpiceJet’s future operations and financial stability.