Centre amends insolvency rules in the wake of jet leasing dispute

The moratorium provisions under the Insolvency Bankruptcy Code (IBC) would now not be applicable to aircraft, aircraft engines, and helicopters. As notified by the Ministry of Corporate Affairs, these were exempted from select provisions of the IBC 2016, under which, a moratorium could be placed by the adjudicating authority on a legal claim seeking back possession or disposing of assets, when a corporate debtor is under the IBC process. This long-awaited modification to India’s insolvency law is anticipated to support the financing of the country’s rapidly expanding airline industry by rectifying inconsistencies between global and local regulations. With this move, aircraft and engine lessors would find it easier to reclaim assets when a client airline faces bankruptcy. These exemptions come following the insolvency and bankruptcy process of Go First where the National Company Law Tribunal did not allow for the aircraft and engine lessors to take back their assets.