In a big relief for aircraft lessors, the government has notified that the protection offered to a corporate debtor from recovery of dues under the Insolvency and Bankruptcy Code 2016 will not cover aircraft, helicopters and engines.
If implemented retrospectively, the move may impact Go First’s insolvency resolution proceedings under which the National Company Law Tribunal had granted it a blanket moratorium in May to shield it from lessors and creditors and also restrained the DGCA from accepting any applications for de-registration of aircraft from any lessors.
“The provisions of sub-section (1) of section 14 of the Insolvency and Bankruptcy Code, 2016 shall not apply to transactions, arrangements or agreements, under the [Cape Town] Convention and Protocol, relating to aircraft, aircraft engines, airframes and helicopters,” reads the notification issued by the Ministry of Corporate Affairs on October 3.
