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SpiceJet taken to court in UK for over Rs 200 crore of unpaid dues

The companies have both said that they sent several notices and follow-ups to SpiceJet seeking payments before approaching the court. The airline had sought more time to file a reply

twitter-logoBusinessToday.In | October 10, 2020 | Updated 12:16 IST
SpiceJet taken to court in UK for over Rs 200 crore of unpaid dues
SpiceJet sued in UK

SpiceJet is facing a lawsuit in London over Rs 200 crore of unpaid charges. Ireland-based BOC Aviation and Wilmington Trust Services have filed the lawsuit with the Business and Property Courts at the High Court in London. The firms have claimed that SpiceJet failed to pay rents and other charges as per the lease agreements signed with the airline.

The companies have both said that they sent several notices and follow-ups to SpiceJet seeking payments before approaching the court. According to a report in Mumbai Mirror, SpiceJet also sought an extension of a month to file a reply, which the court trashed. It instead set a deadline of October 19 for Spicejet to serve its defence, said the news site.

SpiceJet had leased three Boeing 737-800 aircraft from BOC Aviation in May 2019 and three Boeing 737-MAX 8  from Wilmington in 2018-end.

The airline had to pay $220,000 per month or Rs 1.6 crore for each of the three 737-800 aircraft. BOC Aviation claims SpiceJet has been late in paying them since August 2019. As of September 3, the airline needed to pay $3,960,000 or Rs 29 crore. Supplemental rent payable to BOC to the tune of $2,587,751.88 or Rs 19 crore is also pending. The total amount payable to BOC is $6,650,978.29 or Rs 48 crore.

Wilmington joined the suit as a trustee for BOC and from whom SpiceJet had leased three Boeing 737-MAX 8. The company has said that the airline has failed to pay monthly rent since April 2019 amounting to $19,485,334.29 or Rs 140 crore. Supplemental rent owed is $755,046.21 or Rs 5.6 crore. Wilmington has made a claim of $21,314,015.67 or Rs 156 crore.

Moreover, after the worldwide grounding of Boeing 737-Max 8 aircraft, SpiceJet is expecting compensation from Boeing. The airline is believed to be one of the biggest users of the jets. SpiceJet MD and Chairman Ajay Singh had said that the continued grounding and the delay of the MAX in its return to service has hit their growth plans adversely and resulted in inefficient operations and increased costs.

Also read: SpiceJet to begin non-stop flights from Delhi, Mumbai to London

Also read: SpiceJet posts Rs 600.5 crore net loss in Q1 amid COVID-19 lockdown, finances deteriorate

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