India's highest court has dismissed an appeal by the Jalan Kalrock Consortium (JKC) that attempted to block the sale of three B777-300ERs belonging to Jet Airways (Mumbai International) to Malta's Ace Aviation.

The Supreme Court of India handed down its decision on March 7, 2024, regarding the Consortium of Murari Lal and Florian Fritsch v Ace Aviation VII Ltd and Ors (case no. 3626/2024), saying it would not interfere with earlier rulings by the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) to allow the sale of the three aircraft.

Lal and Fritsch are behind JKC, which acquired the rights to buy Jet Airways following its collapse in 2019. However, they have yet to conclude the deal for various reasons, including disputes with creditors.

In 2022, various ACE Aviation Group entities, Ace Aviation VIII Limited, Ace Aviation IX Limited, and Ace Aviation X Limited, signed a deal with the monitoring committee overseeing the sale of Jet Airways to buy three parked B777s. The Ace entities paid the agreed deposit of USD5.6 million and signed the letters of intent. However, in November 2022, the monitoring committee paused the sale process because not all members would agree to it. Ace Aviation Group is owned by the Challenge Group, which operates Challenge Airlines BE, Challenge Airlines IL, and Challenge Airlines MT.

After acquiring the rights to buy Jet Airways in 2020, Lal and Fritsch indicated they were happy to have the B777s disposed of, saying they intended to relaunch with a fleet of fresh aircraft. Since then, as the acquisition process has become bogged down, they have changed their tune and challenged legal applications by the Ace entities to enforce the 2022 letters of intent. JKC's bids to halt the sale in the NCLT and later the NCLAT failed, with the appeals tribunal finding in favour of the Ace entities in October 2023.

The three aircraft were initially expected to fetch around INR4 billion rupees (USD48.3 million). USD1 million of the USD5.6 million deposit paid by Ace was a good faith payment for the future acquisition of another two B777-300ERs. Ace Aviation Group has argued in the courts that the longer the planes stay on the ground at Delhi International, the more they will deteriorate and depreciate.

"The fact that the aircraft are grounded since 2018, substantial investment and major restoration efforts will have to be put in by the applicants to make the aircraft airworthy," an earlier legal filing on behalf of the Ace entities reads. The same filing said it would take between eight and ten months to return each plane to an airworthy condition.

Last October, the NCLAT said their decision to enforce the letters of intent would advantage the consortium as well as Ace, saying the proceeds would be placed into an escrow account and used per the 2021 resolution plan hammered out between JKC and the creditors.

ch-aviation has approached Ace Aviation Group and JKC for comment.