The Supreme Court rejected SpiceJet's appeal against a Delhi High Court ruling requiring the cash-strapped airline to ground three engines leased from Team France 01 SAS and Sunbird France 02 SAS due to unpaid dues.
A three-judge panel led by Chief Justice DY Chandrachud affirmed the high court's decisions, concluding that SpiceJet breached a consent arrangement with the lessors. The court stated the high court decision was right and that it was hesitant to intervene.
The Supreme Court refused SpiceJet's senior lawyer Amit Sibal's appeal for further time to comply with the grounding order. Sibal stated that the airline had already paid the lessors more than $8 million and that negotiations for a settlement were ongoing in Singapore. He asked for respite until an agreement was made, but the court declined to interfere.
Sibal also informed the court that, while two of the three engines had previously been grounded, SpiceJet needed specialist stands to fully ground the engines before releasing them to the lessors, and he asked for further time. In response, the Supreme Court urged SpiceJet to contact the Delhi High Court to clarify its situation.
Senior lawyer Abhishek Manu Singhvi, representing the lessors, said that SpiceJet continuously breached the consent order, despite making 18 court appearances and facing two high court rulings while continuing to use the engines. According to Singhvi, the consent decree required SpiceJet to return the engines within 15 days if payments were not made.
What will happen now?
The airline must now ground the engines, having exhausted all legal options to avoid this. The recent move places an additional load on the airline's already limited funds. SpiceJet stated in court that it has a fleet of 21 aircraft and that stopping the engines would result in the grounding of two planes, interrupting operations.
However, the airline added in a statement, "SpiceJet is now in talks with the aircraft lessor to negotiate an acceptable arrangement. It is crucial to highlight that two of the three engines in concern have already been grounded, and our operations continue entirely regular and uninterrupted. We remain dedicated to guaranteeing smooth operations."
SpiceJet's shares fell 3.50% to ₹65.99 at 2.15 pm on Friday, after the ruling.
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