9 hrs ago
NCLT Rejects Jet Airways’ Rs 500 Crore Boeing Refund Plea
Jet Airways had paid Boeing money in advance for two airplanes.
The airplanes were never delivered.
Boeing later stopped and ended the agreements after Jet Airways delayed payments.
Boeing counted the advance money against the money it said Jet Airways owed.
After Jet Airways went into liquidation, its liquidator asked Boeing to return the advance payments.
Boeing opposed the request, saying the money had already been adjusted against its claim.
The NCLT said deciding who was right would require examining contracts and evidence in a full trial.
It therefore said the issue could not be decided through its limited insolvency jurisdiction.
The NCLT rejected Jet Airways’ liquidator’s plea to recover about Rs 500 crore from Boeing.
The tribunal said the dispute involves complex contractual and factual questions requiring a full-fledged trial.
Jet Airways paid Boeing $92.13 million in advance for two aircraft that were never delivered.
Boeing suspended the agreements in May 2019 and later terminated them, adjusting the advance payments against its claim.
Jet Airways entered liquidation on November 26, 2024, after the Supreme Court ordered liquidation on November 7, 2024.
- Who
- Jet Airways’ liquidator and Boeing are the parties to the dispute; the NCLT decided the plea.
- What
- The NCLT dismissed a request for the return of about Rs 500 crore in advance aircraft payments.
- Where
- The matter was heard by a two-member Mumbai bench of the National Company Law Tribunal.
- When
- The agreements were made in 2013; Boeing suspended them in May 2019, terminated them in December 2020, and Jet Airways entered liquidation on November 26, 2024.
- Why
- The NCLT said the dispute involved complex contractual questions and evidence that required a full-fledged trial outside its insolvency jurisdiction.
Jet Airways’ Liquidator
Boeing
Treatment of advance payments
Jet Airways’ Liquidator
The liquidator argued that the $92.13 million in advance payments belonged to Jet Airways’ liquidation estate and should be refunded because Boeing never delivered the aircraft.
Boeing
Boeing argued that the advance payments had already been adjusted against its larger admitted claim and were extinguished through set-off under the liquidation regulations.
Validity of Boeing’s actions
Jet Airways’ Liquidator
The liquidator challenged Boeing’s suspension, termination, forfeiture of the advance payments and adjustment of those payments.
Boeing
Boeing relied on its contractual position and its claim for dues under the aircraft purchase agreements.
Appropriate forum
Jet Airways’ Liquidator
The liquidator brought the recovery request before the NCLT during the liquidation process.
Boeing
The NCLT held that the contractual dispute required a competent court, detailed evidence and a full-fledged trial rather than adjudication under its restricted insolvency jurisdiction.
Key facts
- Refund sought
- About Rs 500 crore, representing $92.13 million in advance payments
- Aircraft involved
- Two Boeing aircraft: 737-8 and 787-9
- Agreements signed
- 2013
- Boeing suspension
- May 2019, citing payment delays
- Boeing termination notice
- December 2020
- Boeing admitted claim
- Rs 721.19 crore initially, later rising to Rs 873.78 crore because of currency fluctuations
- Liquidation date
- November 26, 2024
Quotes
National Company Law Tribunal
Two-member Mumbai bench hearing the Jet Airways liquidation matter
“Therefore, whether the Respondent Boeing Company was justified in suspending the Agreement, forfeiting the Advance Payments and setting of or adjusting it or filing of its claim before the Resolution Professional are the questions which are required to be adjudicated by the Competent Court of jurisdiction.”
rediff.com
“The disputed questions of fact and law are required to be tested and determined by a full-fledged trial, and the Tribunal's jurisdiction under Section 60(5) of the IBC is circumscribed and restricted to issues arising out of the insolvency process.”
rediff.com
Sources
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