NCLAT sends notice to Boeing as Jet Airways seeks ₹872-crore refund for undelivered aircraft

NCLAT, or the National Company Law Appellate Tribunal, reviews decisions made by the National Company Law Tribunal. It matters here because Jet Airways' liquidator is challenging an NCLT order that blocked recovery of aircraft advance payments from Boeing.

The Mumbai NCLT rejected the liquidator's application on 11 September. It held that the dispute involved contractual questions requiring detailed examination, rather than a decision through insolvency proceedings. The liquidator then moved NCLAT, seeking relief against that order.

The Delhi bench of NCLAT has now issued notice to Boeing. Boeing has two weeks to respond, and the liquidator has one week after that to file a rejoinder. The case is listed for the first week of December. NCLAT could uphold the NCLT's view, overturn it, or give directions on how the dispute should proceed.

The dispute involves a substantial upfront payment made for aircraft that Jet Airways never received. The liquidator is seeking recovery of $92.13 million, described as about ₹872 crore at current exchange rates. The article also refers to the advance as approximately $92 million and Boeing's recorded figure as $91.62 million.

Jet Airways signed agreements with Boeing in 2013 for 737-8 aircraft and 787-9 Dreamliners. The total value of those aircraft orders was about ₹3,005 crore. Jet Airways paid approximately ₹872 crore upfront through advance and pre-delivery payments.

The difference between the order value and the advance matters because the liquidator is not claiming the full contract price. The claim concerns money paid before delivery. Boeing disputes the refund request, saying the advances were adjusted against Jet Airways' unpaid obligations. NCLAT will consider the challenge after the NCLT refused to decide the repayment issue within insolvency proceedings.

Jet Airways says Boeing should refund the advances because the airline paid for aircraft that were never delivered. The payments covered aircraft ordered under two 2013 agreements. The liquidator's position is that Boeing should not retain money for contracted aircraft that did not arrive.

Jet Airways had agreed to buy Boeing 737-8 aircraft and 787-9 Dreamliners. It paid advance and pre-delivery amounts totaling roughly $92 million, or about ₹872 crore. Boeing later suspended its contractual obligations on 22 May 2019 after Jet Airways failed to make certain payments.

The liquidator is pursuing the refund during the liquidation process. The Mumbai NCLT rejected the application, saying the issue involved contractual questions requiring detailed examination by a competent court. The liquidator has appealed to NCLAT. The tribunal must now consider whether the claim can be addressed through the insolvency process or requires separate contractual adjudication.

Boeing's position is that the advance payments cannot be treated separately from Jet Airways' wider contractual debts. It says the money already received should be adjusted against unpaid aircraft instalments, software charges and services. On that basis, Boeing says it does not owe Jet Airways a refund.

Boeing filed a $275.33 million claim before Jet Airways' resolution professional during insolvency. This covered unpaid aircraft instalments, software and services. Boeing argued that the $91.62 million in advances should reduce that outstanding claim rather than be returned to Jet Airways.

After the adjustment, the resolution professional admitted Boeing's claim at ₹721.19 crore. During liquidation, that amount rose to ₹873.79 crore because of currency fluctuations. Boeing maintains that the adjustment settled the significance of the advances. The liquidator disagrees and says the undelivered aircraft require repayment, leaving NCLAT to examine the competing positions.

NCLAT has begun the appeal process by notifying Boeing. This gives Boeing two weeks to file its response to the liquidator's challenge. The liquidator will then have one week to submit a rejoinder, which is a formal reply to Boeing's response.

The matter is listed before the Delhi bench for the first week of December. NCLAT is reviewing the Mumbai NCLT's 11 September order. That order refused to decide the refund application through insolvency proceedings, saying the contractual dispute required detailed examination by a competent court.

NCLAT could leave the NCLT order in place, overturn it, or issue directions about the proper legal route. The article does not state which outcome is likely. The tribunal's decision could determine whether the liquidator can pursue Boeing's alleged repayment obligation within the liquidation process or must seek a separate contractual remedy.

Jet Airways' failed revival changed the setting for the Boeing dispute. In 2021, the NCLT approved a plan from the Jalan-Kalrock consortium, but the plan was never implemented. The Supreme Court overturned the revival process on 7 November 2024 and ordered Jet Airways' liquidation.

Before that, Boeing had filed a claim for unpaid aircraft instalments, software and services. It argued that the advances should be adjusted against those dues. After liquidation began on 26 November 2024, the liquidator instead sought recovery of the advances, arguing that Boeing had not delivered the aircraft.

The liquidation order means Jet Airways is no longer pursuing a revival under the approved plan. Its remaining claims and liabilities must now be addressed in liquidation. That makes the treatment of Boeing's claim and the alleged refund important for the company's remaining assets and creditors. NCLAT is examining the liquidator's challenge after the NCLT rejected the refund application.

Corporate insolvency begins when a company cannot meet its debts. A resolution professional first manages the insolvency process and examines creditor claims. If revival fails, liquidation follows, and a liquidator handles the company's remaining assets and outstanding claims. Jet Airways entered insolvency in June 2019 and moved into liquidation after the Supreme Court ended its revival.

Jet Airways owed banks about ₹8,700 crore, besides amounts owed to vendors, employees and other creditors. Boeing submitted a claim for unpaid aircraft instalments, software and services. The resolution professional admitted Boeing's claim at ₹721.19 crore after accounting for the advance adjustment; it later rose to ₹873.79 crore during liquidation because of currency changes.

Creditors compete because the company's assets are limited and cannot satisfy every demand fully. A refund from Boeing could add value to Jet Airways' estate, while recognition of Boeing's claim could reduce what remains for others. The liquidator must therefore establish which claims and offsets are legally valid.