In a recent development, the National Company Law Appellate Tribunal (NCLAT) has upheld the insolvency resolution proceedings against Go First, a crisis-hit airline owned by the Wadia group. This decision has dealt a blow to aircraft lessors who were attempting to repossess their planes from the struggling airline.
A two-member bench at NCLAT has directed both the aircraft lessors and the Interim Resolution Professional (IRP) of Go First to approach the National Company Law Tribunal (NCLT) to address their respective claims regarding possession and other matters concerning the aircraft. These aircraft leases had been terminated by the lessors after Go First initiated the insolvency process.
The NCLAT bench, headed by Chairperson Justice Ashok Bhushan, confirmed the validity of the order dated May 10, 2023, which admitted the Section 10 Application. This application pertained to Go First’s request for insolvency proceedings to be initiated.
The decision to uphold the insolvency proceedings has implications for both Go First and the aircraft lessors involved. Go First, previously known as GoAir, has been facing severe financial difficulties, which ultimately led to the initiation of insolvency proceedings. This move allows the company to undertake measures to address its financial woes and potentially revive its operations.
On the other hand, the decision poses challenges for the aircraft lessors seeking to reclaim their planes from Go First. The termination of leases by the lessors was a consequence of the airline’s insolvency filing. However, the NCLAT’s ruling implies that the lessors will need to pursue their claims through the NCLT, the appropriate legal forum for resolving disputes related to insolvency proceedings.
The NCLAT’s decision underscores the complex nature of insolvency cases and the need for a specialized tribunal to handle such matters. By directing the parties to approach the NCLT, the appellate tribunal ensures that the claims of both Go First and the aircraft lessors can be examined comprehensively, allowing for a fair and transparent resolution.
This ruling also reflects the broader challenges faced by the aviation industry, particularly amid the COVID-19 pandemic. Many airlines across the globe have been grappling with financial difficulties due to reduced travel demand and operational restrictions. Insolvency proceedings have become a common recourse for airlines seeking to restructure their operations and manage their debts.
For Go First, the NCLAT’s decision marks a pivotal moment in its ongoing struggle to overcome financial hardships. The airline will now have to navigate the insolvency resolution process, which may involve restructuring its debts, renegotiating contracts, and potentially attracting new investors. The outcome of this process will determine the future viability of the airline and its ability to continue operations.
As for the aircraft lessors, the NCLAT’s decision presents a setback in their efforts to retrieve their planes and mitigate their financial losses. They will need to pursue their claims through the NCLT, where their arguments regarding the termination of leases and the return of the aircraft will be evaluated.
The NCLAT’s decision to uphold the insolvency resolution proceedings against Go First has significant implications for the airline and the aircraft lessors involved. It emphasizes the need for a specialized tribunal to handle complex insolvency cases and provides an avenue for a comprehensive examination of the claims and interests of all parties involved. The future of Go First and the fate of the aircraft lessors now rest in the hands of the NCLT, which will play a crucial role in determining the outcome of this high-stakes insolvency battle.