Pay Credit Suisse $1 Million Monthly For 6 Months: Supreme Court To SpiceJet

The Supreme Court on Friday asked low cost airline SpiceJet to pay USD 1 million per month for six months to global investment bank and financial services firm Credit Suisse AG towards repayment of dues.

The airline is already paying USD 0.5 million as monthly instalment to the Swiss firm.

The court's direction followed a request by senior advocate Kapil Sibal to a bench of Justices Vikram Nath and Ahsanuddin Amanullah to allow the airline to pay USD 1 million per month in order to clear part of the arrears in six months. The court said the airline can resume paying USD 0.5 million to the Swiss firm from the seventh month.

The bench posted the matter for further hearing on October 20.

SpiceJet in its statement said, "The Supreme Court has noted our compliance with its previous orders and agreed with our proposal to pay the USD 3 million arrears over the next 6 months. This is a positive outcome for the company and our stakeholders, and we are grateful to the Court for its understanding. We are committed to paying our dues in full and on time. We remain fully committed to upholding the highest standards of compliance and look forward to continuing our positive engagement with all stakeholders."

The top court had on September 11 warned SpiceJet of consequences if it did not clear its dues and directed it to pay USD 1.5 million by September 15.

According to the Swiss firm, SpiceJet had availed the services of SR Technics, Switzerland, for maintenance, repair, and overhaul of aircraft engines, modules, components, assemblies, and parts which were mandatory for its operations.

An agreement for such services was entered into between SpiceJet and SR Technics on November 24, 2011 for 10 years. The terms of payments were also agreed upon.

SR Technics had given Credit Suisse the right to receive payments from SpiceJet for the services.

The court had on July 25 given additional time to SpiceJet to make the payment to Credit Suisse as per the consent terms agreed upon by the two parties.

The top court was hearing a plea by the Swiss firm seeking initiation of contempt proceedings against Singh and SpiceJet over "a wilful and intentional disobedience" of court orders and failure to pay dues as per a settlement between the two sides.

On August 14, the bench, while issuing contempt notices to SpiceJet Chairman Ajay Singh and SpiceJet, had noted the submission of the Swiss firm that the court had granted indulgence and withdrawn the airline from liquidation only in view of the consent terms dated May 23, 2022 by which USD 500,000 was to be paid every month by the low cost carrier to the company from July 15, 2020.

"It was submitted that, though as of now more than 6.5 million US dollars has to be deposited, but only a little over 2 million US dollars has been deposited," the bench had noted the submission of counsel appearing for Credit Suisse in its August 14 order.

SpiceJet and Credit Suisse had told the Supreme Court on August 18, 2022 about the resolution of their financial dispute which led to the withdrawal of an appeal by the low-cost airline against a Madras High Court order for its winding up due to alleged non-payment of dues to the Swiss firm.

"There is a settlement which has taken place on May 23, 2022, as per the consent terms. In view of it, both the parties are satisfied with the settlement and want to withdraw the SLP (special leave petition) filed by the petitioner.

"Accordingly, the application is allowed," the top court had said in its order.

On the appeal of SpiceJet, the top court had on January 28, 2022 stayed the publication of the winding up notice and the order directing the official liquidator attached to the Madras High Court to take over the assets of the airline.

It had also asked SpiceJet to resolve the financial dispute with the Swiss firm.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)