SpiceJet Confronts Insolvency Claims by DAE Capital’s SPVs in India

SpiceJet is currently embroiled in a legal battle for insolvency, initiated by three special purpose vehicles (SPVs) owned by DAE Capital, at India’s National Company Law Tribunal (NCLT). The proceedings began last month when AWAS 36698 Ireland Limited, AWAS 36695 Ireland Limited, and AWAS 36694 Ireland Limited, filed insolvency petitions against the airline.

The insolvency motions, dated March 9, 2024, were briefly discussed in court this week and have been postponed until May 30. SpiceJet has been directed by the court to submit its initial response within the next two weeks. These SPVs previously won a legal judgment against SpiceJet in the UK High Court over unpaid leases and associated costs, amounting to approximately USD 9.2 million in November 2023.

The aircraft involved, all Boeing 737-800s, were leased to SpiceJet between 2019 and 2022, registered under the Indian numbers VT-SYY (msn 36698), VT-SYX (msn 36695), and VT-SYW (msn 26694). Following the UK court ruling, the SPVs are pursuing dual legal avenues to recover the debts: enforcing the UK judgment in the Delhi High Court and seeking the airline’s insolvency through the NCLT due to non-payment.

SpiceJet’s legal team has contested the insolvency petition’s validity, citing multiple flaws and maintaining that it should not be upheld. The airline has previously succeeded in fending off similar insolvency petitions in the NCLT, including one by Willis Lease Finance, which the court deemed not maintainable as Willis was not an operational creditor nor an assignee of the debt. Another petition by Wilmington Trust SP Services (Dublin) was dismissed on similar grounds, though an active insolvency petition by Aircastle is still pending a decision.

The ongoing legal challenges highlight the continued financial strains and operational hurdles facing SpiceJet as it navigates complex litigation and efforts by creditors to recover substantial unpaid debts.