Aircastle to withdraw insolvency plea in NCLT against SpiceJet after settlement

Aircastle, a lessor to budget airline SpiceJet on October 18 told the National Company Law Tribunal (NCLT) that they have reached a settlement with the airline and wish to withdraw the insolvency plea they had filed against the airline in early 2023. .Advocates Ajay Kumar and Sanjay Gupta appeared for Aircastle and SpiceJet respectively, and made a joint statement before the NCLT while urging the tribunal to allow the withdrawal. A coram of judicial member Mahendran Khandelwal and technical member Dr. Sanjeev Ranjan indicated that the withdrawal will be allowed only after a formal application is filed. "File an application for withdrawal. The sooner you file it, the sooner we will allow the withdrawal," the tribunal told the counsel. The lawyers replied by suggesting that the withdrawal could be permitted right away, since both sides were making a joint statement. The NCLT, however, made it clear that it would not permit withdrawal without an application to this effect. The matter is listed next on November 28..Earlier this week, SpiceJet announced that it had settled a $23.3million dispute with Aircastle (Ireland) Designated Activity Company and Wilmington Trust SP Services (Dublin) Limited for a total of $5 million. It was also announced that an agreement had been reached between the parties on the treatment of certain aircraft engines..Aircastle was one of the first lessors to move an insolvency plea against SpiceJet in early 2023. The airline is currently facing nearly 10 similar pleas from various vendors and lessors. The NCLT had in May 2023 issued notice to SpiceJet on Aircastle's insolvency plea. .On October 14, Aviator ML 29641 Limited, another aircraft lessor moved an insolvency plea under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the airline over an alleged default of ₹58.64 crore.Last month, the Delhi High Court upheld an order directing SpiceJet to ground three of its engines for defaulting on payment to French engine lessors. A Division Bench of Justices Rajiv Shakdher and Amit Bansal refused to interfere with single-judge's order directing SpiceJet to ground the engines.The single-judge had passed an order on August 14, directing SpiceJet to ground three engines leased from two French lessors after the airline defaulted on rental lease payments.