Singapore Arbitral Tribunal Directs Pratt & Whitney to Deliver Engines to Go First

Singapore Arbitral Tribunal Directs Pratt & Whitney to Deliver Engines to Go First

The Singapore Arbitral Tribunal has instructed engine maker, Pratt & Whitney (PW), to deliver five engines per month to Go Airlines from August to December 2023. The Wadia group airline is currently undergoing bankruptcy proceedings in India.

Go Airlines, known as Go First, ceased operations and filed for insolvency in the National Company Law Tribunal (NCLT) on May 3 due to financial difficulties and the grounding of more than half of its 54 aircraft caused by engine supply issues from PW.

Furthermore, the airline is also engaged in a separate legal battle with its aircraft lessors, who are seeking to repossess their assets due to default on payments.

On 13 March 2023, Go First lodged a complaint with the Singapore International Arbitration Centre (SIAC) against PW concerning engine delays.

In an interim ruling on 31 March, the SIAC ordered PW to promptly deliver a minimum of 10 operable leased spare engines by 27 April, followed by an additional 10 engines per month until December.

The latest Tribunal order supersedes the previous one. PW expressed its compliance with the interim arbitration ruling and affirmed its intention to defend its position in the upcoming proceedings where business and legal matters will be addressed.

The SIAC’s order does not apply to engines undergoing maintenance, repair, and overhaul (MRO) processes if the engine lessors have issued contrary instructions due to the termination of leases with Go First before the insolvency moratorium.

Moreover, the Tribunal stated that any costs incurred by PW in fulfilling the order would be considered part of the insolvency resolution process. Additionally, in the event of Go First being forced into liquidation proceedings, PW would be given the highest priority for repayment.

In its petition to the National Company Law Tribunal (NCLT), Go First claimed that faulty engines from PW forced the grounding of over half of its planes in April 2023. The airline also stated that the unavailability of engines and engine failures resulted in a loss of over Rs 10,800 crore for the company.

The Singapore Tribunal issued a seven-point order to the US-based engine.

“The respondent must take all reasonable steps to release and dispatch to the Claimant, without delay as they become available, five Engines per month immediately after any Engine becomes available and commencing, at the latest, on 1 August 2023 and continuing through 31 December 2023, subject to further orders of this Tribunal,” read the order.

Additionally, the Tribunal has asked the parties involved to provide it with quarterly updates on the resolution proceedings and compliance with their order.