NCLT dismisses Jet Airways' liquidator plea seeking Rs 500 crore from Boeing

The National Company Law Tribunal NCLT has dismissed the plea of grounded air carrier Jet Airways liquidator seeking a refund of Rs 500 crore from global aerospace manufacturer Boeing observing that the matter involves a contractual disputeA twomember Mumbai bench of NCLT said there was a contractual dispute over the predeliveryadvance payments requiring detailed adjudication and evidence and therefore could not be decided by the tribunal under the Insolvency and Bankruptcy Code IBCThe disputed questions of fact and law are required to be tested and determined by a fullfledged trial and the Tribunals jurisdiction under Section 605 of the IBC is circumscribed and restricted to issues arising out of the insolvency process it saidThe fact remains that Boeing Company has not supplied any of the Aircrafts under the AgreementsTherefore 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 said NCLTThese questions require evaluation of agreements between the parties leading of evidence by the Parties and a fullfledged Trial observed a bench comprising Prabhat Kumar and Sushil Mahadeorao KocheyJet Airways which is under the liquidation process from November 26 2024 had entered into agreements with Boeing in 2013 for purchase of two aircraft 7378 and 7879 aircraft and paid USD 9213 million as advancepredelivery paymentsHowever Boeing suspended the agreements in May 2019 over payment delays months before Jet went into the Corporate Insolvency Resolution Process CIRP in June 2019After the Corporate Insolvency Resolution Process CIRP was initiated against Jet Airways Boeing lodged a claim before the Resolution Professional for dues under the aircraft purchase agreementBoeings claim after adjusting predelivery paymentsadvance amounts of about USD 9213 million already received from Jet Airways was admitted at Rs 72119 crore which later increased to Rs 87378 crore on account of currency fluctuations during the liquidation processBoeing subsequently issued a notice in December 2020 terminating the purchase agreementsLater after Jet Airways failed to secure a revival and the successful resolution applicant Jalan Kalrock Consortium could not implement the approved resolution plan the Supreme Court on November 7 2024 ordered the airlines liquidationThe NCLT commenced liquidation on November 26 2024 following which the liquidator sought recovery of about USD 9213 million in advance payments made to Boeing for aircraft that were never deliveredThe liquidator sought a refund of the advance payments contending that the amount formed part of the liquidation estate under Section 36 of the Insolvency and Bankruptcy Code IBCBoeing opposed the plea arguing that the advance payments had already been adjusted against its larger admitted claim and stood extinguished through setoff under Regulation 29 of the IBBI Liquidation Process Regulations 2016On this NCLT said questions of whether Boeing was justified in suspending and terminating the contracts forfeiting the advance and claiming setoff were disputed issues requiring evaluation of the underlying agreements which neither party placed on record citing confidentialityThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever