Delhi High Court Delivers Landmark Judgment Against SpiceJet In 8-Year Legal Battle Over Haj Contract

Delhi High Court Delivers Landmark Judgment Against SpiceJet in 8-Year Legal Battle Over Haj Contract

In a significant judgment delivered on 30 th September, 2024, the Delhi High Court ruled in favour of two aviation service providers. This decision concludes an eight-year legal battle following SpiceJet's abrupt and unjustified termination of the Plaintiffs’ engagement for the 2016 Haj Operations, a move the court found detrimental to the contractual process.

The Case stemmed from an agreement between the parties for the Plaintiffs to organize and manage SpiceJet’s Hajj flights in 2016. However, in July of that year, just before the Hajj season commenced, SpiceJet terminated the contract, despite the Plaintiffs’ extensive groundwork, including sourcing aircraft and preparing all necessary arrangements. Left with no choice, the Plaintiffs sought justice through the courts.

The Plaintiffs had invested months of work setting up the Haj operations for SpiceJet, completing all preparations and coordinating logistics with agents in India, Saudi Arabia, and the UAE. They were responsible for sourcing suitable aircraft and crews, coordinating ground handling arrangements, and handling technical and financial bids on behalf of SpiceJet.

Advocate Bhuvan Mishra, representing the Plaintiffs, remarked, “This judgment marks a significant reaffirmation of the need for fairness and accountability in corporate partnerships. For years, our clients, the Plaintiffs in this matter, faced undue hardships due to the blatant disregard shown by the Defendant for mutual agreements. But today’s judgment, I am sure, brings huge relief for them and vindicates their hard work in ensuring seamless Haj Charter Operations.”

The court case unfolded over nearly a decade, with the Delhi High Court ultimately ruling that SpiceJet’s termination of the contract was unjustified. Justice Neena Bansal Krishna examined several issues, including whether a binding contract existed, if the Haj Committee of India's advice affected the agreement, whether the Plaintiffs provided services to SpiceJet, and whether the Plaintiffs fulfilled the terms of the agreement.

In her judgment, Justice Krishna emphasized, “From the language of the letter of intent and the parties' actions, there is no doubt that they had entered into a binding contract.” She concluded that the letter of intent constituted a contract under which services were indeed provided, entitling the Plaintiffs to compensation. The judge dismissed SpiceJet’s claims regarding subcontracting and fitness as "a ploy to avoid payment to the Plaintiffs for the services rendered."

In addition to Rs. 31.7 crores in damages, the court ordered SpiceJet to pay 8% per annum interest from August 2016 until the final settlement date.

The ruling sets a precedent for fair treatment of service providers in the aviation industry and highlights SpiceJet’s financial challenges amid its mounting legal liabilities.