NCLAT issues notice to Boeing as Jet Airways seeks refund of ₹872 crore for undelivered aircraft

The liquidator of bankrupt airline Jet Airways has moved the National Company Law Appellate Tribunal (NCLAT) seeking the return of USD 92.13 million (about ₹872 trillion at current exchange rates) from US aircraft manufacturer Boeing as part of advance payments made under aircraft purchase contracts signed in 2013.

The suit, filed by Jet Airways liquidator Satish Kumar Gupta, was heard by the Delhi Appellate Tribunal on Tuesday. The tribunal issued notice to Boeing and gave it two weeks to file a reply, followed by one week for the liquidator to file a rejoinder. The matter was brought up for hearing in the first week of December.

According to the counsel for the liquidator appearing before the NCLAT, Jet Airways paid Boeing about $92 million in advances for planes that were never delivered. The total value of aircraft orders was approx ₹3,005 crore, out of which Jet Airways paid approx ₹872 crore in advance. “The advance that Jet Airways paid to Boeing was about $92 million, which equates to approx ₹872 crore,” said the liquidator’s counsel to NCLAT.

The liquidator had approached the NCLAT after the Mumbai bench of the National Company Law Tribunal (NCLT) on September 11 rejected his suit for refund of advance payments.

The NCLT held that the dispute involved contractual issues between Jet Airways and Boeing which required detailed examination and could not be decided through insolvency proceedings. He said that the matter will have to be decided by the competent court.

Emails to the liquidator of Boeing and Jet Airways seeking comment remained unanswered at the time of publication.

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The origin of the dispute

The dispute dates back to 2013, when Jet Airways entered into two aircraft purchase agreements with Boeing for the 737-8 and 787-9 Dreamliners. The airline paid for the aircraft in advance and before delivery, but they were never delivered.

Jet Airways subsequently faced financial difficulties and failed to make some payments as agreed. On May 22, 2019, Boeing issued a notice suspending its obligations under the contracts. Jet Airways entered insolvency proceedings in June 2019.

During the bankruptcy proceedings, Boeing filed a $275.33 million claim with Jet Airways’ resolution specialist for unpaid aircraft installments as well as certain software and services.

Boeing argued that the $91.62 million in advance payments it had already received from Jet Airways should be adjusted against the amounts owed to the airline, rather than refunded. After accounting for this adjustment, the problem solver recognized Boeing’s claim for ₹721.19 million crowns. This increased to ₹873.79 crore during liquidation due to currency fluctuations.

Boeing argued that it did not owe Jet Airways any money because the advance payments had already been adjusted against the amounts owed to the airline.

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After Jet Airways failed to secure revival, the Supreme Court ordered its liquidation on 7 November 2024. The NCLT initiated the winding-up proceedings on 26 November 2024.

However, the liquidator of Jet Airways questioned Boeing’s position and filed an application with the NCLT seeking refund of the advance payments. The liquidator argued that Boeing should return the money because the contracted planes were never delivered. After the NCLT rejected the application, the liquidator moved NCLAT challenges the order and seeks relief.

Jet Airways, once one of India’s leading private airlines, suspended operations in April 2019 after mounting debt, financial losses and a financial crisis left it unable to fund day-to-day operations.

The airline was admitted into insolvency proceedings before the NCLT in June 2019 on the objection of a consortium of creditors led by SBI. At the time, she owed money to banks in the area ₹8,700 million crowns, in addition to significant liabilities to vendors, employees and other creditors.

In 2021, the NCLT approved the rehabilitation plan submitted by the Jalan-Kalrock consortium, raising hopes of its return. However, the plan remained unimplemented due to disputes over payment and compliance with its terms. In November 2024, the Supreme Court quashed the recovery process and ordered the liquidation of Jet Airways, ending efforts to revive the airline.

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