India's National Company Law Appellate Tribunal (NCLAT) has reserved its order on a payment dispute between the Jet Airways (JAI, Mumbai International) committee of creditors (CoC) and the Jalan Kalrock consortium (JKC), the prospective new owners of the insolvent LCC.
In the matter of State Bank of India & Ors vs. The Consortium of Murari Lal Jalan and Florian Fritsch & Anr, part heard on February 22, 2024, Justices Ashok Bhushan and Barun Mitra declined to rule on the appeal by the CoC, led by the State Bank of India, who argued that JKC had failed to meet its payment obligations per the terms of the 2021 resolution agreement, which paved the way for the consortium to buy Jet Airways.
"Heard learned counsel for the parties as well as intervenor, learned counsel for the parties are at liberty to submit their short notes of submissions not more than ten pages within a week," last week's NCLAT order read. However, the order set no date for the next hearing.
Jet Airways collapsed in April 2019. The administrators later admitted creditor claims of INR78 billion rupees (USD941.3 million). The State Bank of India was the LCC's biggest lender. In 2021, in return for allowing JKC to buy what remained of Jet Airways, the consortium agreed to pay INR3.5 billion (USD42.2 million) to settle all creditor claims. As of January 31, 2024, INR1.5 billion (USD18.1 million) remained outstanding. JKC wanted the CoC to use a previously provided bank guarantee to cover the amount. However, the lenders declined to accept this. The lenders have also questioned the provenance of at least one of the first two payments of INR1 billion (USD12 million), suggesting the funds came from a source not authorised in the resolution plan.
For their part, the consortium has argued it has met the terms of the resolution plan and any delays resulted from interference from the CoC and related legal disputes. In January 2024, India's Supreme Court ordered the consortium to pay the outstanding INR1.5 billion into a State Bank of India-controlled escrow account by January 31 or risk forfeiting their right to acquire the airline.
