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Air India ordered by a UK court to pay £ 13 million to an aircraft leasing company for failing to pay the rent of five leased aircraft | India News


LONDON: Air India was ordered on Friday to pay £ 13 million (Rs 130 crore) to an aircraft leasing company in Dublin for non-payment of the rental and related charges for five Airbus A320-200 aircraft it had leased.
India’s national flag carrier has until January 11, 2021 to make full payment to Aircraft Limited or it could face enforcement action.
Simon Salzedo QC, as a superior court judge, issued a summary judgment against the airline for the total debt that Aircraft Limited in Dublin claims: $ 17.6 million (£ 13.4 million). Salzedo criticized Air India for its “unsatisfactory and rude conduct” in not responding to the request for summary judgment until after the time when the schematic arguments were to be presented.
Air India did not contest the request for summary judgment.
Arshad Ghaffar, representing the plaintiff, said: “Air India is a government-owned entity and the idea that it does not have enough money to deal with this is simply fanciful. The government of India can always have enough money to finance Air India. ”
The commercial court heard that Air India had been “making some payments” on the debt, but these were current accrued amounts owed, as opposed to historical amounts, and that the airline was “juggling various creditors.”
Giles Robertson, representative of Air India, said: “We hope we can pay what we can. There is great uncertainty about the projection of the airline industry today. Some of the effects of enforcing the lawsuit on an operating airline pose particular problems that may fall under special circumstances. “He requested until January 29, 2021 to settle the debt, but Salzedo set the date for 9 a.m. on January 11. of 2021, and this was contingent on Air India making an interim payment of $ 4 million (Rs 29 crore) before midnight on December 31, 2020.
Air India’s Manoj Kumar said in a statement that the airline does not “dispute that the plaintiff, in principle, is entitled to receive sums under his lease agreements with Air India. Air India does not seek to present a substantial defense to claim. ”
Kumar blamed his non-compliance on the Covid-19 pandemic and the nationwide lockdown in India as of March 24, and the restrictions that followed, such as suspension of domestic travel until May, and now quarantine restrictions at airports. and international air travel is limited. to evacuation and bubble countries. He said the airline was operating at 40% of its operational capacity on domestic flights.
“The aircraft was on the ground during the blockade period and traffic is expected to be low for some time. As a result, we face difficulties in making payments. We can agree to rent reductions with most of our landlords, but we cannot agree to this, ”said Kumar.
On June 21, 2014, Air India, as the lessee, entered into five separate, but identical, leases in respect of five Airbus A320-200 aircraft. The court heard that Air India had defaulted on its rent, maintenance reserves and default interest “on various dates between September 2018 and August 31, 2020.”
The terms of the lease provided that legal notices related to the agreement should be sent to the airline’s registered address in the UK at Middlesex.

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