Last-minute Aviator ML settlement delays rulings on seven remaining aircraft lessor petitions
India’s National Company Law Tribunal (NCLT) has ordered fresh hearings in seven insolvency petitions filed by aircraft lessors against SpiceJet after a last-minute settlement with one creditor forced the tribunal to set aside a judgment that had already been prepared, extending one of the country’s longest-running airline-lessor disputes.
The tribunal had reserved orders covering eight insolvency petitions, but the withdrawal of Aviator ML 29641 Ltd’s petition following a settlement meant the judgment could no longer be delivered in its existing form. With one member of the special bench retiring, the tribunal said there was insufficient time to rewrite the ruling, resulting in all remaining matters being transferred for fresh consideration before the regular bench.
Court criticises last-minute settlement
While allowing Aviator ML to withdraw its insolvency petition, the tribunal expressed strong dissatisfaction with the timing of the settlement, saying substantial judicial time had already been spent hearing arguments and preparing orders. The NCLT imposed costs of ₹15 lakh, directing both SpiceJet and Aviator ML to contribute ₹7.5 lakh each to the Prime Minister’s National Relief Fund within seven days.
The tribunal also declined to formally record the settlement agreement, observing that insolvency proceedings are intended to determine bankruptcy matters rather than serve as a forum for late-stage settlements. Judges questioned why similar resolutions had not been pursued with the remaining lessors before the matters reached the judgment stage.
Relief for SpiceJet, delay for lessors
The ruling provides temporary relief for SpiceJet by allowing its existing management to remain in control while the cases are reheard, but it represents another delay for aircraft lessors seeking recovery of outstanding lease-related dues through India’s Insolvency and Bankruptcy Code (IBC).
The airline said it viewed the order as a positive step and remained committed to working with its partners to reach mutually acceptable solutions.
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Broader implications for the leasing sector
The latest development underscores the continuing complexity of aircraft asset recovery in India, where lease enforcement has become a closely watched issue among global lessors. Since 2023, SpiceJet has faced multiple insolvency petitions from aircraft leasing companies, although several disputes have ultimately been resolved through negotiated settlements.
For the global MRO and leasing ecosystem, the case highlights how prolonged financial disputes can influence aircraft asset management, lease recoveries and fleet planning. Until the remaining petitions are resolved, lessors will continue balancing legal enforcement with commercial negotiations as they seek to protect leased assets and recover outstanding payments in one of the world’s fastest-growing aviation markets.
