Wilmington Trust Appeals SpiceJet Insolvency Case to NCLAT

21 Mar 2024 , 02:43 PM

Wilmington Trust SP Services has filed an appeal in the National Company Law Appellate Tribunal (NCLAT) against a ruling by the National Company Law Tribunal (NCLT) rejecting an insolvency plea filed against low-cost airline SpiceJet.

The plea is anticipated to be heard on March 21. On January 29, the NCLT dismissed the plea.

Wilmington filed an insolvency petition against SpiceJet in June 2023 for unpaid dues. In May 2023, the Directorate General of Civil Aviation (DGCA) responded to requests from lessors, including Wilmington Trust SP Services, Sabarmati Aviation Leasing, and Falgu Aviation Leasing, by deregistering three SpiceJet planes, one of which was owned by Wilmington.

The lessors sought deregistration of three Boeing 737-800s due to outstanding payment issues. The DGCA deregistered the planes with the call letters VT-MXJ, MXF, and SZJ.

SpiceJet contended to the NCLT that Wilmington was part of Aircastle, which had already filed two insolvency petitions.

Wilmington said that because it was a trustee of Aircastle, its insolvency petition is valid and warrants a hearing before the tribunal. Wilmington’s counsel contended that a trust can be designated as an operating creditor under the Insolvency and Bankruptcy Code, 2016.

Wilmington’s is the second insolvency petition against SpiceJet rejected by the NCLT in the past two months. In December 2023, the NCLT dismissed an insolvency petition brought by aircraft lessor Willis Lease Finance against the airline for outstanding dues.

SpiceJet questioned Willis’ petition’s maintainability because they submitted a similar case earlier this year but opted to drop it due to technological issues.

In 2023, three lessors filed four bankruptcy petitions for unpaid dues. However, the NCLT only gave notice in response to Aircastle’s request.

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