SpiceJet Successfully Defeats Willis Lease Finance’s Insolvency Bid

SpiceJet, the Indian low-cost carrier, has successfully thwarted an insolvency bid initiated by Willis Lease Finance after the National Company Law Tribunal (NCLT) in New Delhi dismissed the petition. The legal counsel for SpiceJet argued against the maintainability of the case, leading to the tribunal’s decision to reject Willis Lease Finance’s bid to have SpiceJet declared insolvent.

Willis Lease Finance, a Florida-based lessor, had filed multiple insolvency petitions against SpiceJet through special purpose vehicles (SPVs), claiming approximately USD 11 million. The lessor alleged that SpiceJet had failed to make lease payments on 11 engines placed with the airline by various SPVs controlled by Willis.

The legal battle between SpiceJet and Willis Lease Finance has been ongoing, with Willis withdrawing its initial insolvency petition in March and later refiling an amended petition in April. SpiceJet’s counsel argued that the second petition was invalid as it essentially represented the same course of action as the first. Additionally, SpiceJet contended that Willis, as the lessor’s designated SPVs, should not be the party pursuing the airline, as they were the operational creditors.

Willis Lease Finance’s counsel attempted to refute these arguments, stating that the second petition was a mere refiling without new claims. The counsel asserted that Willis had the right to pursue SpiceJet and questioned the appropriateness of having individual insolvency petitions for each SPV.

During the legal proceedings, the NCLT raised concerns about the validity of the second petition and the lack of notice to SpiceJet, as mandated by the provisions of the Insolvency and Bankruptcy Code, 2016. The tribunal questioned the initiation of a fresh plea for the same cause of action without obtaining necessary court permission.

SpiceJet has faced multiple insolvency petitions from various entities, with four separate entities maintaining insolvency actions against the airline. Aircastle has three separate actions, Wilmington Trust SP Services (Dublin) has two, and Celestial Aviation Services Limited has one. The airline has challenged the multiple petitions lodged by lessors, questioning their status as operational creditors.

While the NCLT’s judgment and reasons for the decision are yet to be posted on its website, SpiceJet has welcomed the dismissal of Willis Lease Finance’s insolvency bid. Willis Lease Finance CEO Austin Willis stated that the company would continue to pursue its rights in recovering the approximately USD 11 million owed by SpiceJet under multiple lease agreements.