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Delhi HC grants permission to lessor for inspection of leased engine to SpiceJet

In a significant legal development, the Delhi High Court has given approval for Engine Lease Finance BV to conduct inspections on an engine it leased to SpiceJet. The court ruling permits the lessor to inspect the engine both during its grounded state and once at the time of re-delivery. Additionally, SpiceJet has been instructed by the court to maintain the current status of the engines, with the exception of essential refurbishment activities.

The legal dispute arose when Engine Lease Finance BV claimed that SpiceJet was “cannibalizing” parts of the engine, contradicting the airline’s statement on January 15 that the engine had been grounded. SpiceJet contested these allegations.

SpiceJet and Engine Lease Finance BV had previously informed the court in October of the previous year that they had reached an interim settlement. According to the terms of the settlement, SpiceJet is obligated to pay over USD 2 million to the engine lessor by January. The lessor emphasized its commitment to not terminate the settlement but warned that it would approach the court again if SpiceJet fails to comply with the agreed-upon terms.

In October 2023, a SpiceJet spokesperson stated that both parties had mutually decided to resolve their dispute amicably outside the courtroom. The court proceedings were adjourned to February 8, 2024.

Earlier, the court had set a deadline of October 16 for SpiceJet to settle with Engine Lease Finance BV, cautioning that failure to do so would result in an order restricting the use of leased engines. Despite returning eight of the nine engines, SpiceJet continued to use one. The lessor sought court directions to restrain SpiceJet from utilizing the remaining engine.

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