Go First Insolvency Case: SMBC Aviation Files Appeal Against NCLT Order
SMBC says the NCLT shouldn't have passed the order without giving the lessors a chance to make objections to Go First's petition.
SMBC Aviation Capital, which is one of the lessors of Go First, has filed an appeal against the National Company Law Tribunal's order that was passed in favour of the airline on Wednesday.
The appeal is to be heard before the chairman's court of the National Company Law Appellate Tribunal on Thursday.
The NCLT has granted a full moratorium to Go First and appointed Abhilash Lal of Alvarez and Marsal Holdings LLC as the insolvency resolution professional. He has been directed to make sure that the staff of the airline is not laid off. A sum of Rs 5 crore has to be deposited by the suspended board of directors with the IRP to meet any immediate expenses.
In its appeal, SMBC said the NCLT should not have passed the order without giving the lessors a chance to make objections to the admission of the airline's petition, as per Section 65 of the Insolvency and Bankruptcy Code. Section 65 provides for a course of action to be taken against a company when insolvency proceedings are filed with malicious intent.
The lessor said such an order ought not to have been passed due to the pending dispute between Go First and Pratt & Whitney in Delaware, regarding the execution of an arbitration award in favour of the airline.
The arbitration commission had directed Pratt & Whitney to supply 10 engines every month till December 2023 to the airline.
SMBC said the international aviation industry is seeing the Indian aviation sector as risky business. This becomes especially important, considering the downfall of Kingfisher Airlines and Jet Airways (India) Ltd.
Hence, admitting Go First's petition will shake the confidence of the international aviation industry, according to SMBC.
SMBC has also filed an application seeking interim relief from being restrained from convening any meetings of the Committee of Creditors of the corporate debtor.
The submissions in the case were made before the NCLT by both the airline as well as the lessors on May 4. The airline had prayed for an interim moratorium. saying aircraft are a company's biggest asset in a case like this and the lessors could take them away without an interim moratorium.