Wednesday, December 15, 2021

SpiceJet enters settlement with De Havilland Aircraft of Canada, all legal proceedings stayed

Domestic carrier SpiceJet has entered into a settlement deal with De Havilland Aircraft of Canada (DHC) and all legal proceedings have been stayed for compliance.

DHC manufacturers the DHC-8-400 aircraft. It moved the Delhi Court against the Indian airline, seeking payments for the order of a Q400 aircraft that was not paid. The manufacturer has now stopped production of the aircraft.

“The parties have agreed to settle all their disputes under and related to the aircraft purchase agreement and component solution agreement, subject to compliance with the terms of settlement,” according to a statement from SpiceJet issued on December 15.

“All related proceedings before the UK Court and execution proceedings before the Delhi High Court have been stayed and will be withdrawn upon compliance with the settlement terms,” it said.

The case between SpiceJet and De Havilland involves the delivery of 14 Dash 8-400 turboprops that SpiceJet had ordered. As part of the settlement SpiceJet is expected to have inducted a few of the aircrafts from the aforementioned deal in order to maintain a long-term relationship with the aircraft manufacturer.

In 2017, SpiceJet signed a purchase agreement for 25 Q-400 aircraft. It took delivery of five aircraft, but failed to make pre-delivery payments for 15 aircraft in the order. It also did not take delivery of three of those planes. Later, the Canadian aircraft manufacturer suspended the contract

The matter came to light when SpiceJet did not cough up pre-delivery dues for 14 of the said aircraft. In February 2020, De Havilland sued the low cost carrier for the same in a UK High Court.

In August, De Havilland dragged low-cost-carrier to Delhi HC to implement the $42.9 million claim decree granted by a UK court.

The new settlement is another victory for SpiceJet after the company had just a month reached an agreement with Boeing under which the airplane maker agreed to provide “certain accommodations and settle the outstanding claims related to the grounding of MAX 737 aircraft and its return to service.”

15/12/21 Moneycontrol

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