The High Court in London has awarded summary judgment of nearly $8m against low-cost India-based carrier, SpiceJet, in a dispute with engine lessor Sunbird France, after the carrier failed to participate in proceedings over unpaid lease obligations.
The Commercial Court ruled in favour of Sunbird on claims relating to three CFM56 engines leased to the airline between 2019 and early 2023, covering unpaid rent and maintenance accruals dating back to 2022. The total award amounted to $7,959,235, excluding interest and costs.
In granting summary judgment, the court found that SpiceJet had “no real prospect” of successfully defending the claims. The judge noted that the airline had been fully informed of the proceedings but had chosen not to engage, despite correspondence from its legal representatives.
The ruling emphasised the strict contractual nature of aircraft leasing agreements, with payment obligations deemed “absolute and unconditional”, regardless of any potential disputes. The court also accepted that the lessor’s calculation of amounts due was binding in the absence of fraud or manifest error.
The claim centred on three engines, with unpaid rent and maintenance accruals accumulating over several years. Maintenance accruals, fees designed to cover future overhaul costs and life-limited parts, formed a significant portion of the total sum awarded.
Sunbird, a special purpose vehicle ultimately linked to Paris-based interests, was represented by boutique firm Alius Law, which instructed Thomas Munby KC and Cleon Catsambis.
Bree Taylor, founder of Alius Law, said: “We are pleased to succeed in our application for summary judgment and to achieve an excellent result for Sunbird within such a short time of the claim being filed. It will be comforting to leasing companies with defaulting lessees that the English courts are well equipped, fast and efficient when dealing with claims for unpaid rent and other debts.”
The use of summary judgment, rather than a default judgment, was seen as significant, as a ruling on the merits is more readily enforceable in India under local civil procedure rules, potentially improving the lessor’s ability to recover against SpiceJet’s assets.
The decision adds to mounting legal and financial pressure on the airline. In December 2024, the Delhi High Court summoned senior executives at SpiceJet after the carrier failed to pay more than $6m owed to engine lessors including Sunbird and Team France. The court had previously ordered the airline to make instalment payments and return leased engines, but those obligations were not met.
According to India-based newspaper, The Economic Times, the airline is desperately seeking a lifeline while cutting jobs with salaries being delayed by up to two months or longer with other dues also piling up.