Delhi High Court allows engine inspection amid SpiceJet-lessor dispute
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New Delhi (Uttam Hindu News): The Delhi High Court on Tuesday allowed Engine Lease Finance BV, the leasing company of SpiceJet, to inspect the engines leased to the airline.
Low cost airlines have been directed to maintain status quo with respect to engines, with exceptions allowed only for purposes such as renewal. The directive comes in response to allegations by the lessor that SpiceJet was involved in malfunctioning parts of the leased engines. It informed the court that despite SpiceJet’s commitment to shut down the engine on January 15, the airline continued to use it.
SpiceJet’s counsel assured the court that the airline would immediately shut down the engines and submit a comprehensive response to address all the allegations raised by the lessor. Earlier, the court was informed that Engine Lease Finance Corporation Aviation Services Ltd and cash-strapped SpiceJet airline have reached an interim agreement. During the hearing, legal representatives from both sides informed the court that the terms of the settlement had been agreed upon and as a result, both legal teams requested an adjournment.
The court had granted adjournment, fixing the hearing of the case on February 8. Under the agreement, SpiceJet will have to pay more than $2 million to Engine Lease Finance BV by January. Additionally, SpiceJet has committed to return the disputed engine by January 25. However, if SpiceJet fails to meet these obligations, Engine Lease Finance BV reserves the right to pursue termination and take legal action.
Engine Lease BV had taken the matter to the Delhi High Court on September 27, demanding the return of the only remaining engine. The lessor initially leased nine engines to the carrier and as per the terms of the lease agreement, eight engines were returned upon termination of the agreement. During the last hearing, senior advocate Rajasekhar Rao and advocate Anand Venkataramani, representing the engine lease, had requested the court to bar SpiceJet from using the engine. The agreement clearly states that the airline is not authorized to continue using the engine after the lease ends.
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