India’s SpiceJet to appeal De Havilland $43mn lawsuit win

SpiceJet (SG, Delhi Int’l) has said it will appeal against a ruling at the High Court of Justice in London, which ordered that De Havilland Aircraft of Canada (DHC, Toronto Downsview) be entitled to recover USD42.9 million in damages from the airline and terminate a DHC-8-Q400 purchase agreement. The Canadian manufacturer sued the Indian low-cost carrier in a conflict stemming from a purchase agreement signed in September 2017 for 25 of the Bombardier Aerospace turboprops. The airline subsequently paid for and took delivery of five of them but halted pre-delivery payments for most of the remainder, according to De Havilland. The claim alleged that only USD7 million in down payments were made on these remaining orders. SpiceJet argued in court that its payment obligations had been suspended by a change order the two companies signed in April 2019. This agreement’s suspension of scheduled delivery dates also meant suspended payment liability, it claimed. De Havilland argued that this was not the case. In his February 23 ruling, the judge said he was “persuaded by the arguments of the claimant.” “I am satisfied that although there was an agreement for variation of the scheduled delivery months, there was no agreement to excuse payment of the invoices in respect of those pre-delivery payments which had already accrued due,” he said. SpiceJet said it would appeal against the ruling, India’s Business Standard reported, quoting an airline spokesperson as saying on March 7: “The same court allowed appeal against the order, and we shall be doing the same within the timeframe provided by the court.” The ch-aviation fleets advanced shows that De Havilland currently has outstanding orders for nineteen Dash 8-400s, including to Air Tanzania (one), Biman Bangladesh Airlines (one), Ethiopian Airlines (three), and TAAG Angola Airlines (three), while the rest cover three remaining aircraft each ordered by ACIA Aero, Conair Aviation and Elin Group. DHC also has two aircraft previously built for SpiceJet that remain unassigned. As of January 31, 2020, SpiceJet was the biggest outstanding customer with firm orders for 19 of the type on top of 32 it already operated. It continues to operate those 32 aircraft. SpiceJet had not responded to ch-aviation’s request for comment at the time of going to press. De Havilland Canada responded that it “confirms it has received judgement against SpiceJet from the High Court of Justice of England and Wales in the amount of USD42.95 million. De Havilland Canada is pleased with the judgement. The decision confirms De Havilland Canada’s position that SpiceJet did not abide by the terms of the contract in failing to accept delivery of aircraft and to make the required pre-delivery payments.”