Delhivery, Go First Settlement Talks turn Fruitless, Legal Battle to continue at NCLT

New Delhi(India), 18/08/23: The National Company Law Tribunal (NCLT) was informed on August 17 that settlement talks between the grounded airline Go First and logistics provider Delhivery had failed.

Delhivery and Go First have both opted to continue their legal fight in the NCLT. As a result, the tribunal has requested a response from Go First’s Resolution Professional (RP) to Delhivery’s petition. The matter will now most likely be heard on September 15.

During the August 17 hearing, the NCLT also issued notice of an application to be exempted from the moratorium by aircraft lessor DAE (SY 22) 13 Ireland Designated Activity Company. Go First’s RP has agreed to respond to this application as well.

On July 24, Go First’s RP informed the NCLT that it is in the process of negotiating a settlement with Delhivery. As a result, the tribunal postponed the case until the third week of August.

According to the application filed by Delhivery before the NCLT, the airline received approximately ₹1.58 crore from the logistics company for offering domestic cargo consignment services but never followed through. The money was paid in accordance with the provisions of a contract signed by the companies in 2020 and renewed in August 2022.

According to the petition, which Moneycontrol examined and stated says, Go First received ₹57 lakh on May 2, the day it filed for insolvency, despite knowing that it may not be able to provide services in the future because it does not have an operating fleet, as it admits.

The plea adds, “the sole intent of Go First in preferring the insolvency petition is to hijack the process in detriment of Delhivery’s bonafide, the plea is an abuse of process of law.”

On May 10, the NCLT’s chief bench in Delhi accepted Go First’s voluntary petition to commence an insolvency resolution procedure.

The tribunal appointed an IRP while suspending the board and putting the airline’s financial obligations on hold.

Go First, formerly GoAir, filed for bankruptcy on May 2, blaming US engine maker Pratt & Whitney for grounding half its fleet owing to malfunctioning engines.

The ultra-low-cost airline has over ₹11,000 crore in liabilities.