NCLAT to pass crucial orders in Go First insolvency case on Monday

Posted on by

The National Corporations Law Appeal Tribunal (NCLAT) has been appointed to pass orders on petition by four lessors of Go First v National Corporations Law Tribunal (NCLT), Delhi order conceding the airline’s insolvency suit.

Monday’s order will decide whether lessors are allowed to take over the plane or if the planes remain under the control of the airline.

Civil Aviation Minister Jyotiraditya Scindia said on May 18 that the issue of an airline’s insolvency was “not a great thing for aviation” and the ministry was committed to helping the cash-strapped airline.

Appearing at the airline, senior advocate Maninder Singh told NCLAT there was an impression there was something wrong and malicious about voluntary insolvency.

NCLT’s Delhi board had earlier accepted Go First’s insolvency appeal, which resulted in the airline being put under embargo according to the IBC.

NCLAT is set to hear the appeal of SMBC Aviation Capital, SFV Aircraft Holdings, GY Aviation Lease and Engine Leasing Finance against the NCLT’s motion.

SMBC Aviation Capital told the court that Go Air’s insolvency application was “malicious” and “a smokescreen”. They also said that the planes in Go First’s possession were their assets, and they had no access to them.

Meanwhile, SFV Aircraft Holdings said, “They may tamper with our aircraft, and they may use parts of my aircraft to service other aircraft.”

Go First’s professional decision had told the appeals court that if the airline was allowed to operate, about 80 Pratt & Whitney engines would “change the fortunes of the company.”

The airline told NCLT it won an arbitration award in Singapore v. Pratt & Whitney (P&W), directing P&W to supply 10 serviceable engines by April 27 of this year and 10 serviceable engines each month through December 2023.

SMBC Aviation Capital told the court in a May 11 filing that the Indian aviation sector is seen as a risky jurisdiction in light of the fate of Kingfisher and Jet Airways. “Given these difficulties, international lessors and aircraft owners see India as a risky jurisdiction for leasing aircraft. Therefore, Indian operators have to pay a premium for leasing aircraft. Thus, the acceptance of the petition (from Go First) has shaken the confidence of the international aviation industry,” he said. SMBC to the Court of Appeal.

The office of Chief Justice Ashok Bhushan and (technical) member Barun Mitra will pass an order on Monday morning.