Friday, August 18, 2023

NCLAT Clears Path For Engine Lease Finance To Inspect Go First Airlines' Engines

The National Company Law Appellate Tribunal (NCLAT) has authorised Engine Lease Finance BV to conduct an inspection of its four jet engines currently held by Go First Airlines. The tribunal ruling modifies the earlier judgement by the National Company Law Tribunal (NCLT) on July 26.

Engine Lease Finance (ELF), a key player in engine financing and leasing, had contested NCLT's decision in a bid to regain control of the engines. However, the Delhi bench had rejected ELF's plea, asserting that maintenance fell under the responsibility of Go First's resolution professional during the corporate insolvency resolution process.

The NCLAT's recent verdict now requires Go First's resolution professional to facilitate ELF's engine inspection within the next 10 days. The directive came from the NCLAT bench, presided over by Chairperson Justice Ashok Bhushan and Barun Mitra.

While NCLT had previously denied other lessors' requests to reclaim leased planes from Go First, NCLAT differed in its stance. It deemed the NCLT's refusal of inspection unnecessary. Furthermore, NCLAT prompted NCLT to promptly address similar pleas from other Go First lessors.

The NCLT's earlier ruling had underscored the critical role of aircraft and engines in Go First's business operations. The NCLT emphasised that their removal could lead to the airline's "corporate death," considering the assets were under Go First's physical control.


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