The Supreme Court of India has directed Ajay Singh, the Managing Director of SpiceJet, to provide a response to a contempt case initiated by Credit Suisse. This development follows a legal battle that began in 2015 between Credit Suisse and SpiceJet over unpaid dues amounting to around $24 million. The conflict escalated to the point where the Madras High Court ordered the winding-up of the airline in 2021 due to the outstanding debt.
SpiceJet issued a statement emphasizing that the debt in question is an “old one and predates the current promoter taking over the company.” The airline expressed its intention to fulfill its financial obligations by paying the outstanding amount. In response to the winding-up order, SpiceJet appealed to the Supreme Court, leading to a suspension of the winding-up proceedings and allowing both parties to explore the possibility of settling the dispute amicably.
By August 2022, both Credit Suisse and SpiceJet had informed the top court of their agreement to resolve the dispute. However, in a surprising turn of events, Credit Suisse filed a contempt case in March, alleging non-payment of dues as agreed upon.
Meanwhile, the shares of SpiceJet experienced a significant surge of nearly 7% following the announcement of the company’s net profit of ₹205 crore for the June quarter. The airline attributed this positive financial result to strong demand for air travel in India, despite facing multiple challenges. The net profit marks a substantial improvement from the net loss of ₹789 crore recorded in the same period of the previous year.
Despite ongoing challenges, including the legal dispute and other headwinds, SpiceJet’s Chairman and Managing Director, Ajay Singh, expressed satisfaction that the airline achieved profitability in the first quarter of the current financial year.
The case exemplifies the complexities of legal disputes in the aviation industry and highlights the significance of adhering to settlement agreements and financial commitments. It also underscores the potential impact of legal challenges on the reputation and financial stability of companies within the sector.