SpiceJet-Credit Suisse financial dispute settled, SC told
Aug 18, 2022
New Delhi [India], August 18 : Private airliner SpiceJet Limited and Swiss company Credit Suisse on Thursday told the Supreme Court that they have reached a settlement of their financial dispute.
A bench of Chief Justice NV Ramana and Justices Hima Kohli and CT Ravikumar allowed SpiceJet to withdraw its appeal challenging the winding order passed by the Madras High Court.
"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 SLP (special leave petition) filed by the petitioner (SpiceJet). Accordingly, the application is allowed," the bench said in the order and directed the parties to abide by the consent terms.
At the outset, SpiceJet told the apex court that both the parties have settled their dispute and said there was a bank guarantee given to the Madras High Court Registrar according to the high court order.
Now, according to the terms of the settlement, the bank guarantee has to be released and returned to the bank, the counsel appearing for the airline told the bench.
Noting the submissions, the bench said the parties concerned were at liberty to move the high court for release of the bank guarantee.
In January, the Supreme Court had stayed for three weeks the order of the High Court directing winding up proceedings against SpiceJet after the airline claimed that it is looking to settle the dispute over its outstanding dues with the Swiss company Credit Suisse.
It had stayed the winding up order of SpiceJet to await the measures taken by the airline's management to resolve the dispute.
The airline had said that it will attempt to resolve the issues with Credit Suisse.
SpiceJet Limited had earlier approached the apex court against the Madras High Court order of the winding up of the company.
As per Switzerland-based company Credit Suisse AG, SpiceJet had failed to honour its commitment to pay the bills for over USD 24 million raised by the Swiss company for maintenance, repairing and overhauling of the aircraft engines and components.
The division bench of the Madras High Court had upheld the December 6 verdict of a single judge ordering the winding up of SpiceJet Limited and directing the official liquidator attached to the High Court to take over the assets of the company.
The single judge had suspended the operation of his order for a limited period with a direction to the company to remit USD 5 million, as a condition precedent to avail of the interim relief.
The division bench by its order on January 11, however, extended the operation of the interim stay granted by the single judge, till January 28 to enable the airliner to prefer an appeal before the Supreme Court. SpiceJet had moved the division bench against single judge order.
The winding up petition before High Court's single judge was moved by Credit Suisse AG claiming that SpiceJet was indebted to it for more than USD 24 million and alleged that the private carrier is unable to pay the debts owed to the firm.
According to the Credit Suisse AG, a stock corporation registered under the laws of Switzerland, SpiceJet had availed services of SR Technics, Switzerland, for maintenance, repair and overhauling of aircraft engines, modules, components, assemblies and parts which are mandatory for its operations.
On November 24, 2011, the 10-year contract was signed between SR Technica and SpiceJet. Meanwhile, SR Technics entered into a financing agreement with Credit Suisse AG on September 26, 2012, and assigned all its present and future rights to receive payments to Credit Swiss.
Credit Swiss said it made repeated requests to SpiceJet to make payments under the various invoices and since SpiceJet did not honour its commitment, the Swiss company issued a statutory notice under the Companies Act.
As the notice did not evoke any response, Credit Swiss said it moved the plea for liquidation and winding up of SpiceJet.
The company had prayed before the single judge for winding up SpiceJet under the provisions of the Companies Act, 1956 and appointed the Official Liquidator of the High Court as the Liquidator of SpiceJet with all powers under Section 448 of the Companies Act to take charge of its assets, properties, stock in trade and books of accounts.
