Engine Lease Finance Files Insolvency Plea Against SpiceJet
Engine Lease Finance BV (ELF), an aircraft engine lessor to SpiceJet, has filed an insolvency petition against the debt-ridden airline before the National Company Law Tribunal (NCLT). This action stems from SpiceJet's non-payment of over USD 12 million (approximately Rs 100 crore).
ELF has leased eight engines to SpiceJet. Including interest and rental charges, ELF claims a total outstanding amount of around USD 16 million. The matter was heard by a Delhi bench of the NCLT on Wednesday. SpiceJet's counsel requested time to respond to the petition, which was granted by the NCLT bench.
Headquartered in Shannon, Ireland, ELF is a leading independent engine financing and leasing company. It entered into an agreement with SpiceJet in 2017 to lease engines. According to ELF, SpiceJet has defaulted on payments since April 2021.
SpiceJet's counsel argued that there is a pre-existing dispute between the two parties. This is not the first legal action taken by ELF against SpiceJet. In 2023, ELF approached the Delhi High Court after terminating the lease for two engines and seeking their possession. The parties reached a settlement, and ELF decided not to pursue the matter further. However, ELF returned to the High Court after alleging that SpiceJet had failed to pay in accordance with the terms of the settlement. This matter remains pending before the Delhi High Court.
SpiceJet has faced insolvency petitions from several creditors, including Willis Lease, Aircastle Ireland Ltd, Wilmington Trust, and Celestial Aviation. The NCLT rejected the pleas of Willis Lease Finance and Wilmington Trust. SpiceJet settled the case with Celestial Aviation. The petitions filed by Aircastle and Alterna Aircraft are pending before the NCLT.
Both Wilmington Trust and Willis Lease Finance have challenged the NCLT's dismissal of their insolvency pleas by appealing to the National Company Law Appellate Tribunal (NCLAT).