SpiceJet Resolves USD 29.9 Million Lease Dispute with Celestial Amidst NCLT Proceedings

In a significant development, SpiceJet has reached an agreement to settle a USD 29.9 million lease dispute with Celestial Aviation Leasing. The resolution was reached on the sidelines of a National Company Law Tribunal (NCLT) hearing in Delhi on October 10, where the matter of Celestial Aviation Services Ltd v. SpiceJet Limited was being discussed.

The dispute, initially listed in early June 2023, revolved around unpaid leases for nine aircraft. The October 10 hearing, which was initially set to consider arguments from Celestial’s counsel favoring a declaration of SpiceJet’s insolvency, took an unexpected turn when both parties expressed their intention to settle. Justices Mahendra Khandelwal and Sanjeev Ranjam adjourned the case until November 7 to allow for the resolution process.

SpiceJet and Celestial have not provided comments on the matter. Celestial Aviation Services Limited, formerly known as GE Capital Aviation Services Limited, was acquired by AerCap in 2021. This resolution marks the second significant lease dispute settlement for SpiceJet, following the conversion of debts with Carlyle Aviation Partners SPVs into equity. However, challenges persist, as Aircastle reportedly rejected a debt-for-equity swap offer from SpiceJet, and insolvency bids from various lessors remain ongoing.

In a parallel legal development, the Delhi High Court has adjourned a hearing until October 13 regarding a bid by SpiceJet’s former majority owner, Kalanithi Maran, to extract payment from a separate judgment against SpiceJet and its current majority owner, Ajay Singh. Following a long-running dispute dating back to a 2015 majority shareholding transfer, the court previously awarded Maran INR 3.97 billion (USD 47.4 million), with SpiceJet making a partial payment of INR 1 billion (USD 12 million) in September. Maran now seeks the remaining amount, raising concerns that claiming SpiceJet’s recently declared INR 2.04 billion (USD 24.5 million) quarterly net profit could potentially lead the airline into insolvency, as argued by SpiceJet’s legal counsel.