The National Company Law Tribunal (NCLT) has dismissed the plea of Jet Airways' liquidator seeking a refund of $92.129 million (approximately ₹500 crore) from global aerospace manufacturer Boeing, according to reports from LiveLawBiz and The Economic Times. A two-member Mumbai bench of NCLT observed that the matter involves a contractual dispute over pre-delivery/advance payments, requiring detailed adjudication and evidence. The tribunal stated that disputed questions of fact and law are required to be tested and determined by a full-fledged trial, with jurisdiction under Section 60(5) of the IBC being circumscribed and restricted to issues arising out of the insolvency process. As reported by The Economic Times, the court ruled that the matter falls outside the tribunal's insolvency jurisdiction, emphasizing that these questions require evaluation of agreements between the parties, leading of evidence by the Parties and a full-fledged Trial.
According to the NCLT ruling, Jet Airways, which is under liquidation process from November 26, 2024, had entered into agreements with Boeing in 2013 for purchase of two aircraft 737-8 and 787-9 aircraft and paid $92.13 million as advance/pre-delivery payments. However, Boeing suspended the agreements in May 2019 over payment delays, months before Jet went into the Corporate Insolvency Resolution Process (CIRP) in June 2019. After the CIRP was initiated, Boeing lodged a claim before the Resolution Professional for dues under the aircraft purchase agreement, with the claim later increasing to Rs 873.78 crore after adjusting pre-delivery payments and accounting for currency fluctuations during the liquidation process. As reported by Rediff Moneynews, Boeing's claim, after adjusting pre-delivery payments/advance amounts of about USD 92.13 million already received from Jet Airways, was admitted at Rs 721.19 crore, which later increased to Rs 873.78 crore on account of currency fluctuations during the liquidation process. The fact remains that Boeing Company has not supplied any of the Aircrafts under the Agreements, as noted by the NCLT.
As reported by NDTV and Rediff Moneynews, the Supreme Court on November 7, 2024 ordered the airline's liquidation after Jet Airways failed to secure a revival and the successful resolution applicant, Jalan Kalrock Consortium, could not implement the approved resolution plan. The NCLT commenced liquidation on November 26, 2024, following which the liquidator sought recovery of about $92.13 million in advance payments made to Boeing for aircraft that were never delivered. The liquidator contended that the amount formed part of the liquidation estate under Section 36 of the Insolvency and Bankruptcy Code (IBC). The NCLT observed that 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, as reported by The Economic Times.
According to the NCLT ruling, Boeing opposed the plea, arguing that the advance payments had already been adjusted against its larger admitted claim and stood extinguished through set-off under Regulation 29 of the IBBI (Liquidation Process) Regulations, 2016. The tribunal noted that Boeing subsequently issued a notice in December 2020 terminating the purchase agreements, and questions of whether Boeing was justified in suspending and terminating the contracts, forfeiting the advance, and claiming set-off were disputed issues requiring evaluation of the underlying agreements, which neither party placed on record citing confidentiality. As reported by Rediff Moneynews, the NCLT observed that questions of whether Boeing was justified in suspending and terminating the contracts, forfeiting the advance, and claiming set-off, were disputed issues requiring evaluation of the underlying agreements -- which neither party placed on record, citing confidentiality.
