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Canadian aircraft-maker drags SpiceJet to Delhi HC

Forum Gandhi Mumbai | Updated on July 07, 2021

De Havilland Aircraft wants to enforce $43 million in damages awarded by a UK court

Aircraft manufacturer De Havilland Aircraft of Canada Ltd has moved the Delhi High Court for the enforcement of $42.9 million in damages awarded against SpiceJet by a UK court.

Earlier this year, the Canadian aircraft manufacturer had dragged the low-cost carrier to a UK court over a conflict over non-payment for the delivery of nearly 14 out of 25 Dash 8-400 turboprops.

Contract suspended

In 2017, SpiceJet had signed a purchase agreement for 25 Q-400 aircraft. It took delivery of five aircraft, but failed to make pre-delivery payments for 15 aircraft. It also did not take delivery of three of those planes. Later, the Canadian aircraft manufacturer suspended the contract.

The matter came to light when SpiceJet did not pay up pre-delivery dues for 14 of the said aircraft. In February 2020, De Havilland sued the low-cost carrier for the same in a UK High Court.

Earlier this year, the UK court upheld De Havilland’s claims and said that it was entitled to recover $42.9 million in damages from the airline. According to sources, while De Havilland has filed the application in the Delhi High Court to get the decree implemented, SpiceJet has objected to the claims.

Both De Havilland and SpiceJet have hired top lawyers from K Ashar & Co and Senior advocate Harish Salve, respectively. SpiceJet and De Havilland did not comment on the development.

Severe cash crunch

This comes at a time when the low-cost carrier is dealing with acute cash crunch and losses for at least five consecutive quarters. The airline recently announced that it plans to raise ₹2,500 crore to stay afloat.

Last year, it had also approached its lenders for working capital of ₹500 crore and one-time debt restructuring. However, that too seems to have been put on the back burner by the banks.

Published on July 06, 2021

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