MUMBAI : The Supreme Court on Friday stayed a Madras high court order directing the winding-up of SpiceJet Ltd, granting the airline the three weeks it requested to resolve its dispute with Credit Suisse AG.
The high court had directed the winding-up following a petition from the Swiss financial services company to recover dues of ₹180 crore. On Tuesday, SpiceJet moved the Supreme Court against the order.
SpiceJet’s counsel Harish Salve told the apex court that the airline was trying to resolve the matter with Credit Suisse and sought three weeks. Chief Justice N.V. Ramana asked SpiceJet to submit details about the company’s financial statements. “This is not the way you can run the airline... You cannot say that you are a busy airline and not pay the dues; what is your contribution?" he asked.
“It is a serious matter. If you do not want to run the airline, we can declare you insolvent and refer the airline to liquidation," the chief justice said.
In the second week of January, the high court turned down an appeal by SpiceJet against a December order by a single-judge bench to wind up its operations after the airline failed to make payment of over $24 million to Swiss maintenance, repair and overhauling (MRO) service provider SR Technics. Credit Suisse is mandated to receive the pending dues on behalf of SR Technics.
However, a division bench of the high court comprising judges Sathi Kumar Sukumara Kurup and Paresh Upadhyay extended a stay order on the judgement till 28 January, allowing SpiceJet to approach the apex court.
Sushmita Gandhi, partner, IndusLaw, said, “While the focus shifts from winding up to value maximization through resolution process in this reformed insolvency era, it will be interesting to see how the top court reacts to the high court order and if SpiceJet will meet a similar fate as so many other big airline carriers.
It will also be interesting to see how SpiceJet seeks interference from the apex court on their plea of unenforceability of commercial contracts for lack of stamping. This might be an uphill battle for SpiceJet, especially in light of recent rulings by the Supreme Court," Gandhi said. Nirav Shah, partner, DSK Legal, said, “Matters seem to have reached a critical juncture for SpiceJet, and if they are unable to repay Credit Suisse, they can face a real prospect of liquidation."
