Delhi HC Rejects Urgent Request From SpiceJet On Grounding Of Aircraft Engines

SpiceJet

The Delhi High Court declined an urgent request from low-cost airline SpiceJet to expedite a hearing challenging an order that requires the airline to ground three aircraft engines by today and return them to the lessors within 15 days.

The request was made for an urgent hearing before a bench consisting of Acting Chief Justice Manmohan and Justice Manmeet PS Arora. The bench, however, stated that it would be impossible to schedule the hearing the same day and set the hearing for August 20 instead.

“It is very difficult to list it today. Several judges are on leave today. Let the learned judges read the papers (case documents). We will have it on Tuesday,” the bench commented.

SpiceJet is contesting a decision made by a single judge on August 14, which directed the airline to ground the three engines by Friday and return them to the lessors, Team France 01 SAS and Sunbird France 02 SAS, within 15 days. The judge also instructed the airline to allow the lessors’ representatives to inspect the engines at Delhi airport within seven days.

Senior advocate Amit Sibal, representing SpiceJet, urged the court to hear the matter post-lunch due to the urgency of the situation, arguing that grounding the engines would result in grounding 2 aircraft, which would cause significant inconvenience to passengers with already booked flights. He noted that the airline operates 21 aircraft.

In response, the bench stated it was impossible to review the case documents in such a short time and remarked, “Let the airline manage with 19 aircraft and we will have the matter on Tuesday.”

In the earlier order, the single judge ruled, “This court has no option but to direct the defendant (SpiceJet) to ground the three engines with effect from August 16, 2024. The defendant will take steps to ensure that the engines are redelivered to the plaintiff within 15 days from today (August 14).”

The court’s decision was based on pleas from the lessors who sought the return of the engines after terminating their lease agreements with SpiceJet. The lessors claimed that despite the termination, the airline failed to ground and return the engines or pay outstanding dues.

The court also emphasized that SpiceJet remains liable for outstanding payments of USD 4.8 million as per a previous order dated May 29, 2024. The return of the engines does not absolve the airline of this liability.

The judge found that the plaintiffs had a strong case for their interim requests, which included preventing SpiceJet from using the engines and ordering their return. The court agreed with the plaintiffs’ argument that they were suffering irreparable losses due to the continued use of the engines, which are depreciating assets.

The court further noted that SpiceJet is in default and has no legal or contractual right to continue using the engines. It warned that allowing the airline to use the engines without payment would only worsen the financial situation for the lessors, and thus, the balance of convenience favored the plaintiffs.

In response, SpiceJet’s counsel acknowledged the default but highlighted that the airline had made payments totaling USD 7.18 million between December 2023 and May 2024. The counsel also noted that, following a settlement in May, the airline paid USD 1.48 million, but there was still an admitted default of USD 2.67 million as of August 12. The airline requested an extension until September 30 to settle the dues.