SpiceJet faces $33mn court order plus BOC lease claim

SpiceJet (SG, Delhi Int’l) has had to confront several legal issues on top of problems such as ongoing financial losses, its auditor casting doubt over its status as a going concern in its most recent annual report, and the effects of the coronavirus pandemic. Singapore-based lessor BOC Aviation and Delaware-based Wilmington Trust Corporation, a subsidiary of M&T Bank, filed a joint claim on September 3 against the low-cost carrier at the High Court of Justice in London arguing that it had fallen behind on lease payments. Wilmington Trust SP Services (Dublin), an affiliate of Wilmington Trust Corporation, and BOC Aviation (Ireland) Limited filed a Part 7 claim against the Indian airline. Under the UK’s Civil Procedure Rules, Part 7 proceedings typically occur where there is a substantial dispute of fact. They are initiated when a claimant asks the court to issue a claim form. BOC Aviation currently leases six aircraft to SpiceJet, three B737-800s and three B737-8 MAX aircraft, according to the ch-aviation fleets advanced module. Separately, on September 7, the High Court of Delhi gave SpiceJet six weeks to deposit INR2.43 billion rupees (USD33 million) in interest for warrants and non-convertible cumulative preference shares that were allegedly agreed and paid for but not issued to Indian media baron Kalanithi Maran, the Economic Times reported. A spokesperson for the airline told the newspaper that it was “reviewing the order”. Maran held a controlling stake in SpiceJet through his company KAL Airways between June 2010 and January 2015. The dispute relates to the transfer of ownership of the airline in 2015 to current owner Ajay Singh, in which shares and warrants were supposed to be allotted in two tranches. In 2016, the High Court of Delhi ordered SpiceJet to deposit INR5.79 billion (USD89.4 million) into a court-registered escrow account. To date, the carrier has paid Maran INR3.08 billion (USD42 million) and agreed a bank guarantee worth INR2.7 billion (USD36.8 million). However, in a petition in 2019, Maran argued that SpiceJet should also deposit interest on the sum.