SpiceJet settles $1.5 million debt to Credit Suisse following Supreme Court directive

© Reuters.

Indian budget airline SpiceJet Ltd has transferred $1.5 million to Swiss investment bank Credit Suisse AG, in compliance with a directive from the Supreme Court of India, the company announced on Friday. The payment, which was executed on Thursday, followed a stern warning from the court to SpiceJet's Chairman and Managing Director (CMD), Ajay Singh, about his failure to meet financial obligations towards Credit Suisse.

The court had earlier this week cautioned Singh that non-compliance with its directive could result in him facing imprisonment. It had instructed the CMD to remit $500,000 as part of an installment to Credit Suisse, along with an additional defaulted amount of $1 million.

SpiceJet's announcement of compliance resulted in its shares jumping over 4% on Friday. By the end of the day, shares of the Gurugram-based airline closed over Rs 38 per share, up 0.42% from the previous closing.

In a statement issued earlier this week, SpiceJet acknowledged the legal process and pledged commitment to complying with all court directives and obligations in the case against Credit Suisse. The airline stated that it has already paid a total of $8 million to Credit Suisse and remains committed to maintaining transparency and legal compliance.

The dispute between SpiceJet and Credit Suisse originates from the airline's failure to make payments to SR Technics, a Switzerland-based aircraft maintenance service provider. The unpaid dues totaled $20 million, leading to the Madras High Court ordering the winding up of SpiceJet.

However, in May 2022, the Supreme Court intervened and suspended the Madras High Court's order, urging both parties to reach a settlement. Despite this intervention, SpiceJet's non-compliance with the terms of the settlement order led to Credit Suisse initiating contempt of court proceedings against the airline in April 2023.

The Supreme Court issued a contempt notice to Singh on August 14, based on a petition filed by Credit Suisse, accusing the financially strained airline of failing to abide by the court-approved settlement plan for the payment of outstanding dues. Singh was noted as being in clear contempt of court during the proceedings.

Amid these legal issues, SpiceJet announced on September 12 that it had paid Rs 100 crore to Kalanithi Maran, the Sun Group chairman and former promoter of the airline, in accordance with the Delhi High Court's direction related to an arbitral award.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.