Saudi Arabian Airlines Corporation v International Airfinance Corporation & Ors
[2024] EWHC 242 (Comm)
TWC Aviation Capital Limited v SpiceJet Limited
22 March 2024
[2024] EWHC 721 (Comm)
High Court
An airline (SpiceJet) fell behind on payments for leased planes and engines. The leasing company (TWC) went to court and won an order to get its stuff back. SpiceJet tried to argue it needed to keep using the engines, but the judge said no, because SpiceJet couldn't pay and was likely damaging the equipment. The engines and planes have to be returned, but SpiceJet has eight weeks to try and overturn the decision.
Key Facts
- •TWC Aviation Capital Limited (TWC) leased aircraft and engines to SpiceJet Limited (SpiceJet).
- •SpiceJet faced a significant financial crisis and defaulted on lease payments.
- •TWC terminated the leases and sought redelivery of the aircraft and engines.
- •TWC obtained an interim injunction preventing SpiceJet from using the engines on other aircraft.
- •SpiceJet argued that the balance of convenience favored allowing continued engine use.
- •SpiceJet proposed undertakings to prevent further cannibalization of aircraft parts.
Legal Principles
Balance of convenience in granting interim injunctions.
Inherent jurisdiction of the High Court
Interpretation of lease agreements and termination clauses.
Contract law
Enforcement of court orders.
Contempt of court
Outcomes
The interim injunction was continued.
The court found that the balance of convenience favored TWC. SpiceJet's financial difficulties and the risk of further damage to the aircraft and engines outweighed the impact on SpiceJet's operations. The undertakings offered by SpiceJet were deemed inadequate.
SpiceJet was ordered to deliver the leased engines and aircraft to TWC.
There was no meaningful difference between preventing engine use and ordering delivery. This decision was made in light of SpiceJet's defaults and the unlikeliness of a successful challenge to the lease terminations.
Export of the engines and aircraft from India was prohibited for eight weeks.
This provided a limited window for SpiceJet to potentially challenge the decision, although the court recognized the low probability of success given SpiceJet's circumstances.
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