The National Company Law Appellate Tribunal on Monday upheld the court order admitting Go First’s voluntary insolvency and asked the lessors, who had challenged the moratorium on repossession of aircraft, to approach the adjudicating court.
“The Appellant(s) as well as IRP [Interim Resolution Professional] are at liberty to make appropriate Application before the Adjudicating Authority for declaration with regard to applicability of the moratorium on the aircrafts with regard to which leases in favour of the Corporate Applicant [Go First] were terminated(sic),” the NCLAT order said.
The lessors, SMBC Aviation Capital Ltd., GY Aviation and SFV Aircraft Holdings, moved the NCLAT after the NCLT at Delhi admitted Go First’s plea for voluntary insolvency in an order dated May 10, 2023 and granted it protection under a moratorium from its planes being seized as well as actions by other creditors over unpaid dues.
The lessors who have appealed against the order had leased out 21 aircraft to Go First.
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Various lessors have together terminated leases of at least 45 of 54 Go First’s aircraft, but the NCLT granted the airline protection under a moratorium from its planes being seized by them over unpaid dues.
The lessors maintain that the moratorium order was given after termination of leases and requests to the DGCA for de-registration of aircraft and isn’t applicable retrospectively, and that once there was a default on payments, they have the right to suspend leases under the Cape Town Convention. However, Go First has asserted that there are payments owed to lessors only due to defective engines supplied by Pratt and Whitney resulting in groundings.
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The airline has until Tuesday to respond to the DGCA’s showcause notice, on the basis of which the regulator has said it will decide whether to revoke Go First’s permit to operate commercial flights. It has not yet shared its plan for resumption of flights with the DGCA, which has barred it from selling tickets. Travel agents have also threatened to not take new bookings for Go First if the airline demands cash instead of allowing them to reuse credit shells. Close to 500 out of 650 pilots are learnt to have joined rival airlines.
