SpiceJet CEO is Facing Contempt Charges Brought by Credit Suisse

Ajay Singh, CEO of SpiceJet, is facing contempt charges brought by Credit Suisse, prompting India’s Supreme Court to order his personal appearance next month. Credit Suisse initiated legal proceedings against Singh and SpiceJet in March, alleging deliberate disobedience of court orders and payment agreements. The bank claims that SpiceJet and Singh have failed to adhere to a 2022 preliminary commercial settlement intended to resolve a long-standing USD24 million dispute.

Credit Suisse filed a liquidation petition against the low-cost carrier due to unpaid maintenance and servicing invoices from the early 2010s. In 2011, SR Technics signed a decade-long servicing contract for SpiceJet’s aircraft, which soured as invoices remained unpaid. In 2012, SR Technics transferred invoice payment rights to Credit Suisse. Legal actions concerning the unpaid invoices have been ongoing since 2015.

In January 2022, the Madras High Court ruled in favor of Credit Suisse, ordering SpiceJet’s liquidation. However, SpiceJet appealed to the Supreme Court and eventually settled the disagreement. In March of the same year, Credit Suisse returned to the Supreme Court, accusing SpiceJet of not adhering to the agreed payment schedule (USD500,000 monthly) and accruing USD6.5 million in arrears.

This week, Shyam Divan, representing SpiceJet, informed the Supreme Court that the airline has met its monthly repayment obligations since April, reducing the outstanding balance to USD4.4 million. Earlier this month, SpiceJet additionally paid USD200,000 beyond the agreed amount. Despite the court’s previous leniency toward SpiceJet’s non-compliance with orders and settlements, it accepted Credit Suisse’s contempt petition this week. The court ordered Singh to personally respond within four weeks. Contempt charges could result in fines and/or six months of imprisonment.

SpiceJet stated that it deviated from the settlement plan due to pending Reserve Bank of India (RBI) approval at the time. A SpiceJet spokesperson stated, “The shortfall of USD4.4 million pertains to the period when RBI approval was still awaited. The company intends to pay this and the remaining balance amount per the applicable schedule.”

Credit Suisse marks the second creditor to target Singh. An ongoing dispute between Kalanithi Maran, SpiceJet’s former majority owner, and Singh led the Delhi High Court to order Singh’s personal appearance on August 24. This appearance aims to address SpiceJet’s disregard for court orders and non-payment in that particular matter.

Numerous creditors have insolvency petitions against SpiceJet, mainly in India’s bankruptcy court, the National Company Law Tribunal, and in other jurisdictions like the United Kingdom. Entities pursuing claims against SpiceJet include Willis Lease Finance, Celestial Aviation Services Limited (UK), Wilmington Trust SP Services (Dublin), and Aircastle.