SC allows SpiceJet to settle dispute with Credit Suisse over $24-m dues

The SC had earlier asked SpiceJet to resolve its dispute with Credit Suisse AG and had stayed the HC’s order that allowed a winding up of the low-cost airline.

SC allows SpiceJet to settle dispute with Credit Suisse over $24-m dues
The apex court also asked SpiceJet to move the HC for release of its $5-million bank guarantee, given as a collateral, as per the consent terms.

The Supreme Court on Thursday allowed SpiceJet to withdraw its appeal against the winding up order passed by the Madras High Court as the carrier told the court that it has reached a settlement with Switzerland-based investment banking company Credit Suisse AG over a $24-million dispute.

The apex court also asked SpiceJet to move the HC for release of its $5-million bank guarantee, given as a collateral, as per the consent terms.

“There is a settlement which has taken place on May 23, 2022, as per the consent terms. In view of it, both parties are satisfied with the settlement and want to withdraw the special leave petition filed by the petitioner (SpiceJet). Accordingly, the application is allowed,” the bench headed by the Chief Justice NV Ramana said in its order and directed the parties to abide by the consent terms.

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The SC had earlier asked SpiceJet to resolve its dispute with Credit Suisse AG and had stayed the HC’s order that allowed a winding up of the low-cost airline.

SpiceJet had challenged the HC order of January 11, allowing the winding-up petition filed by Credit Suisse against the company for default of about $24 million. The HC had also directed the official liquidator to take over the assets of SpiceJet.

The Swiss company had filed a winding-up case against the airline for failing to honour some invoices raised for over $24 million towards payment of maintenance, repairing, and overhauling of the aircraft engines and components in 2013. However, the apex court, on SpiceJet’s appeal, had put the HC order on hold and asked the airline to settle the case with Credit Suisse.

The airline had in November 2011 entered into a 10-year contract for servicing of aircraft with Swiss engine maintenance services firm SRT Technics, which, in turn, sold its right to receive payments based on the contract to Credit Suisse in September 2012.

Credit Suisse was assigned the rights to receive payments due to SRT in 2012 via a financial agreement, which allowed the third party to receive payments from SpiceJet under the seven invoices raised by SRT. Pursuant to SpiceJet failing to honour some invoices raised in 2013, Credit Suisse had moved the HC.

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