Alterna Aircraft withdraws insolvency plea against SpiceJet in NCLT

Alterna Aircraft withdraws insolvency plea against SpiceJet in NCLT

Alterna Aircraft BV Limited, an Ireland-based aircraft lessor on March 18 withdrew its insolvency plea against low-cost airline SpiceJet at the National Company Law Tribunal (NCLT). The lessor plans to fight the same at an appropriate forum.

The NCLT thus permitted it to withdraw the plea and gave it the liberty to move the plea at the forum it thinks fit. Sources close to the development told Moneycontrol that Alterna is likely to approach the Delhi High Court soon.

Alterna had filed the plea to recover $11.1 million and GBP265,000 awarded to it by English courts against SpiceJet. However, the NCLT questioned how it could move an insolvency plea when it had to recover an amount awarded by another court.

According to Alterna’s plea, which Moneycontrol was able to access, the High Court of England and Wales awarded these amounts in its favour in March 2023. Since SpiceJet has not appealed against the High Court’s order for close to a year now, the lessor claims that the order has attained finality.

On January 4 and 5, the court exhaustively heard the arguments by the lessor on how the amount could be classified as a financial debt and how SpiceJet could be admitted to the corporate insolvency proceedings to recover the same. However, SpiceJet contended that the plea is not maintainable as IBC is not meant for recovery.

SpiceJet in NCLT

Three aircraft lessors filed four insolvency pleas against SpiceJet in 2023 for the non-payment of dues. Other than the aircraft lessors, a tech services provider has also moved an insolvency plea against SpiceJet.

While the NCLT has issued notice only in Aircastle’s first plea, it has been urging the airline to settle with the lessors. In August, SpiceJet allotted over 48 million shares to nine aircraft lessors to clear outstanding dues worth 2.31 billion rupees (nearly $28 million), as the troubled airline looks to return to full operation.

Aircastle Ireland Ltd, Wilmington and Celestial filed petitions, asking NCLT to admit SpiceJet to the insolvency process to enable them to recover their dues. Of these pleas, NCLT dismissed pleas filed by aircraft lessors Willis and Wilmington. SpiceJet has also entered into a settlement with an aircraft lessor called Celestial Aviation Services.