Delhi High Court allows lessor to inspect engine leased to Spicejet

Company tells court the low-cost carrier was 'cannibalising' parts of the engine

The Delhi High Court on Tuesday allowed a company to inspect an engine it had leased to SpiceJet, the low-cost carrier under insolvency process.

Engine Lease Finance BV will make the inspection when the engine is grounded and once at the time of its re-delivery. The court also asked SpiceJet to maintain status quo with respect to engines, except for refurbishing.

The lessor told the court that SpiceJet was "cannibalising" parts for use after saying on January 15 that it had grounded the engine. SpiceJet contested this claim.

Spicejet and Engine Lease Finance BV had told the court in October last year that they had reached an interim settlement. SpiceJet is supposed to pay more than $2 million to the engine lessor by January, according to the settlement terms.

The lessor said it will not terminate the settlement and will approach the court again if the airline does not comply with its undertaking.

"SpiceJet and Engine Lease Finance Corporation Aviation Services Ltd have mutually decided to resolve their dispute through amicable means, outside of the courtroom. During today’s proceedings before the Delhi High Court, both parties’ legal representatives informed the court that settlement terms have been agreed and consequently, both legal teams requested an adjournment, and the Court graciously granted the adjournment, scheduling the matter to be revisited on 8 February 2024," said a SpiceJet spokesperson in October 2023.

The court had given SpiceJet time till October 16 to settle with Engine Lease Finance BV, warning that if the parties failed it would pass an order restraining the use of leased engines.

The airline returned eight of the nine engines and continued to use one. The lessor sought directions to restrain SpiceJet from using the remaining engine.