NCLT Dismisses Plea For Jet Airways' Liquidator Seeking Rs 500 Crore Refund From Boeing

The National Company Law Tribunal (NCLT) has dismissed the plea of grounded air carrier Jet Airways' liquidator seeking a refund of Rs 500 crore from global aerospace manufacturer Boeing, observing that the matter involves a contractual dispute.

A two-member Mumbai bench of NCLT said there was a contractual dispute over the pre-delivery/advance payments, requiring detailed adjudication and evidence, and therefore could not be decided by the tribunal under the Insolvency and Bankruptcy Code (IBC).

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"The disputed questions of fact and law are required to be tested and determined by a full-fledged trial, and the Tribunal's jurisdiction under Section 60(5) of the IBC is circumscribed and restricted to issues arising out of the insolvency process,” it said.

The fact remains that Boeing Company has not supplied any of the Aircrafts under the Agreements.

"Therefore, whether the Respondent Boeing Company was justified in suspending the Agreement, forfeiting the Advance Payments and setting of or adjusting it or filing of its claim before the Resolution Professional are the questions which are required to be adjudicated by the Competent Court of jurisdiction," said NCLT.

These questions require "evaluation of agreements between the parties, leading of evidence by the Parties and a full-fledged Trial." observed a bench comprising Prabhat Kumar and Sushil Mahadeorao Kochey.

Jet Airways, which is under the liquidation process from November 26, 2024, had entered into agreements with Boeing in 2013 for purchase of two aircraft 737-8 and 787-9 aircraft and paid $92.13 million as advance/pre-delivery payments.

However, Boeing suspended the agreements in May 2019 over payment delays, months before Jet went into the Corporate Insolvency Resolution Process (CIRP) in June 2019.

After the Corporate Insolvency Resolution Process (CIRP) was initiated against Jet Airways, Boeing lodged a claim before the Resolution Professional for dues under the aircraft purchase agreement.

Boeing's claim, after adjusting pre-delivery payments/advance amounts of about $92.13 million already received from Jet Airways, was admitted at Rs 721.19 crore, which later increased to Rs 873.78 crore on account of currency fluctuations during the liquidation process.

Boeing subsequently issued a notice in December 2020 terminating the purchase agreements.

Later, after Jet Airways failed to secure a revival and the successful resolution applicant, Jalan Kalrock Consortium, could not implement the approved resolution plan, the Supreme Court on November 7, 2024 ordered the airline's liquidation.

The NCLT commenced liquidation on November 26, 2024, following which the liquidator sought recovery of about $92.13 million in advance payments made to Boeing for aircraft that were never delivered.

The liquidator sought a refund of the advance payments, contending that the amount formed part of the liquidation estate under Section 36 of the Insolvency and Bankruptcy Code (IBC).

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Boeing opposed the plea, arguing that the advance payments had already been adjusted against its larger admitted claim and stood extinguished through set-off under Regulation 29 of the IBBI (Liquidation Process) Regulations, 2016.

On this NCLT said questions of whether Boeing was justified in suspending and terminating the contracts, forfeiting the advance, and claiming set-off, were disputed issues requiring evaluation of the underlying agreements -- which neither party placed on record, citing confidentiality.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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