Canadian aircraft maker wins $43 million lawsuit against SpiceJet

PBC News: A UK high court has ruled in favor of Canadian aircraft manufacturer De Havilland in a contract with SpiceJet, saying it is entitled to $42.9 million in damages from the airline.

De Haviland passed the verdict after suing SpiceJet for failing to pre-deliver 14 Q-400s to SpiceJet on the basis of the order.

The aircraft manufacturers had given notice to terminate the purchase agreement and claimed liquid loss of 42.9 million liters.

In a recent ruling, the UK High Court upheld the aircraft manufacturer’s claim that it had not complied with the terms of the SpiceJet agreement. The court also said De Havilland could claim liquid 42.9 million in liquid compensation from the airline.

Under Indian law, a separate application must be made to a court to enforce a judgment in a civil or commercial case.

SpiceJet said it was appealing against the order. “The same court has allowed appeals against the order and we will do the same within the time frame given by the court,” an airline spokesman said today.

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SpiceJet Canada Limited has signed an agreement to purchase 25 Q-400 aircraft in 2017 by operating the passenger and cargo versions of the Q-400 aircraft manufactured by De Havilland Aircraft. It delivered five aircraft but failed to make pre-delivery payment (PDP) of fifteen aircraft in succession. It did not deliver three of those aircraft (6-8 numbers) due to commercial disputes.

Disputes between both parties relate to changes in the terms of the bone purchase. The scheduled dates for 9-25 flights were postponed under the revised conditions. De Haviland said only the delivery date has been postponed and there was no agreement to postpone the pre-delivery date for those aircraft. SpiceJet states that the payment obligation has been automatically suspended after the delivery date has been postponed.

The airline argued, “If the distributor stopped deliveries, it would not be understandable for businesses to be forced to pay PDPs.” SpiceJet also counter-claimed damages against the aircraft manufacturer, saying it had failed to arrange funding for the aircraft.

De Haviland’s violation resulted in the PDP of three aircraft not being paid. However, the court did not uphold the airline’s application.