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You've money to buy Go First but not to pay Credit Suisse: SC to Ajay Singh

New Delhi, Feb 19, 2024 

Credit Suisse and SpiceJet have been entangled in a legal conflict since 2015 over outstanding debts of approximately $24 million 

"You have money to buy Go First but not Credit Suisse," the Supreme Court on Monday asked low-cost carrier SpiceJet Chairman and Managing Director (CMD) Ajay Singh while directing him to pay their outstanding dues to Swiss firm Credit Suisse by March 15.

"Why don’t we take judicial notice of the newspaper reports that you’re planning to take GoAir (now Go First)? You have that much of a cushion and you won’t repay?” the court said while directing Singh to be present on the next date of the hearing, which is March 22.

When the airline's counsel said that they had made payments that were delayed, the court said there is no scope for belated payment. "The very fact that the respondent (Singh) is in default is apparent from the dateline given," the court said.

Credit Suisse and SpiceJet have been entangled in a legal conflict since 2015 over outstanding debts of approximately $24 million.

Credit Suisse told the apex court that they were to receive $15 million by February 15, however, only $13.75 million was paid.

In September last year, the Supreme Court permitted SpiceJet to pay the Swiss firm $1 million per month for six months to settle its $3 million arrears.

At that time, the low-cost carrier informed the court that it was already making monthly payments of $500,000 to the Swiss firm and sought approval to increase the monthly instalment by an additional $500,000 for six months.

The Supreme Court had observed that SpiceJet is behind on monthly payments by $3 million and directed the airline to regularise its payments from the seventh month ($500,000).

The apex court on Monday told the airline to pay $1.25 million by March 15 in addition to its monthly payments.

In August 2022, both parties informed the Supreme Court of reaching an agreement. However, in March 2023, Credit Suisse initiated a contempt case against Singh and the airline, asserting that SpiceJet had not honoured its payment obligations outlined in the settlement terms.

In 2011, the airline entered into a 10-year contract with Swiss maintenance firm SRT Technics for aircraft servicing. In 2012, SRT transferred its right to recover the payment for maintenance to Credit Suisse.

SpiceJet promoter Ajay Singh and Busy Bee Airways Private Ltd (BBAPL) have jointly submitted a bid for insolvent airline Go First, which ceased to fly in May last year. Moreover, Sharjah-based aviation services company Sky One announced submitting a bid for the airline.

BBAPL, an East Delhi-based company, has Paul Gomes and Pran Sathiadasan as 50-50 shareholders, according to the latest documents filed with the Ministry of Corporate Affairs in November 2023, which have been reviewed by Business Standard.

Ajay Singh, chairman and managing director of SpiceJet, said in a statement he believed Go First held immense potential and could be revitalised to work in close synergy with SpiceJet, benefiting both carriers.

While SpiceJet has recently raised certain funds, the airline has been facing a cash crunch for several quarters. It is also dealing with multiple court cases regarding money owed to former owner Kalanithi Maran, financial services firm Credit Suisse, aircraft lessors, and engine lessors. Earlier this month, SpiceJet said it was laying off a certain percentage of employees to save up to Rs 100 crore per year.

[The Business Standard]

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