Singapore International Arbitration Centre (SIAC) has issued a directive to Pratt & Whitney, instructing them to provide GoFirst with five engines on a monthly basis. The interim relief has been granted to both Pratt & Whitney and GoFirst.
On July 5, SIAC issued an interim order, as stated by Ramji Srinivasan, senior lawyer representing the Resolution Professional, Shailendra Ajmera, during the NCLT court hearing on Thursday. Srinivasan informed the bench that SIAC has directed Pratt & Whitney to deliver five engines per month to GoFirst.
According to the reviewed order copy obtained by businessline, the Tribunal specified that the interim relief was granted based on the Emergency Award, while the Supplemental Award has ceased to be in effect as of the date of the current order.
The Tribunal stated that Pratt & Whitney must take all necessary measures to dispatch five engines per month to GoFirst as they become available, starting no later than August 1, and continuing until December 31, 2023, subject to further orders from the Tribunal.
Relief to engine maker
Sources within Pratt & Whitney said this ruling provides relief for the engine manufacturer as well since the number of engines to be delivered has been reduced from 10 to five.
Further, the bench clarified that the specified number does not apply to any third-party engines currently undergoing maintenance, for which the engine lessors have communicated alternative instructions due to the termination of leases with GoFirst prior to the moratorium.
The Tribunal has instructed GoFirst to obtain cost estimates from the Resolution Professional within seven days of the current order. It requires an undertaking from GoFirst that any expenses incurred by Pratt & Whitney in complying with this order will be considered costs of the insolvency resolution process, giving Pratt & Whitney the highest priority for repayment in the event that GoFirst is forced into liquidation proceedings.
In addition to these provisions, the Tribunal has requested both parties to provide quarterly updates on the progress of the resolution proceedings, compliance with the current order, and any other relevant developments. The first update is scheduled for October 1, 2023.
The Tribunal is also expected to consider granting an interim order to prohibit GoFirst from operating the leased aircraft. The parties have been directed to submit the necessary pleadings for a detailed hearing before the Tribunal.
During Thursday’s hearing in NCLT, the lessors informed the Tribunal about an order from the Delhi High Court, which stated that GoFirst cannot use the aircraft when the lease is terminated. The lessors urged the Tribunal to issue a similar order, claiming that the Resolution Professional has not maintained the aircraft as per their previous undertaking.
Srinivasan further revealed during the hearing that the DGCA (Directorate General of Civil Aviation) conducted an audit, and the revival plan received unanimous approval from all members of the Committee of Creditors.
The NCLT has now postponed the hearing of applications from aircraft and engine lessors to August 4.
Pratt & Whitney spokesperson states, “Pratt & Whitney respects the Interim Arbitration ruling and will comply with the order until it is otherwise modified. We look forward to vigorously defending ourselves during the merits proceedings where the business and legal issues will be determined and resolved.”