Supreme Court Disposes Of SpiceJet-Credit Suisse Dispute
The Supreme Court has formally brought an end to a dispute between SpiceJet and Credit Suisse AG.
The Supreme Court of India has formally brought an end to a dispute between SpiceJet Ltd. and Credit Suisse AG, which at one point led to an order to wind up the airline.
In December last year, the Madras High Court had ordered winding up of SpiceJet on grounds that it failed to clear debt owed to Credit Suisse. This order was subsequently stayed by the top court within weeks.
On Aug. 18, the Supreme Court after the filing of the terms of settlement formally disposed of the matter and allowed SpiceJet to approach the Madras High Court seeking to withdraw the $5 million deposited during the course of the proceedings.
The dispute stemmed from an aircraft maintenance agreement that SpiceJet entered with Switzerland-based SR Technics in 2011. SR Technics later entered into a financing agreement with Credit Suisse granting them the right to receive payments for the invoices raised against SpiceJet for maintenance and repair purposes.
In total, SR Technics raised seven invoices in 2013 but claimed it didn’t receive the payment from the carrier.
The Section 433 of the Companies Act allows for winding up of a company if it’s found that the firm has been unable to pay its debts. The section explains when a company could be considered to have been unable to pay its debts. Requirements under this section include:
An outstanding amount of more than Rs 500.
A neglect on the part of the company to pay the money within three weeks of the written notice being delivered at the registered office of the company.
The airline then appealed against the order before the division bench of the Madras High Court, which dismissed its plea.
This led to the matter landing up in the top court where both sides finally agreed to settle the dispute.