NCLT Dismisses Jet Airways Liquidator's $92M Refund Claim Against Boeing Over Aircraft Deal

The Mumbai Bench of the National Company Law Tribunal (NCLT) has dismissed a plea filed by the Liquidator of Jet Airways (India) Limited seeking a refund of approximately $92.129 million in advance payments made to The Boeing Company for aircraft that were never delivered. The tribunal, comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar, held that the dispute centered on contractual agreements and could not be adjudicated in its summary jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code (IBC).

A $92 Million Question

The dispute traces back to 2013, when Jet Airways entered into two purchase agreements with Boeing for Boeing 737-8 and Boeing 787-9 aircraft. As part of these agreements, Jet Airways made advance and pre-delivery payments totaling $92,129,387. The agreements were not placed before the tribunal due to concerns over Boeing's confidential proprietary information.

Jet Airways subsequently failed to make certain payments due under the agreements, leading Boeing to issue a notice of suspension on May 22, 2019. The corporate insolvency resolution process (CIRP) against Jet Airways commenced in June 2019, and the airline was ultimately ordered into liquidation by the Supreme Court. Boeing terminated the purchase agreements in December 2020 without having delivered any aircraft.

Battle of Jurisdiction

The Liquidator filed Interlocutory Application No. 2737 of 2026 seeking directions for Boeing to refund the advance payments, arguing that these amounts formed part of the liquidation estate under Section 36 of the IBC. The Liquidator contended that Boeing had participated in the insolvency process by filing its claim and had therefore submitted to the NCLT's jurisdiction.

Boeing countered by filing IA No. 3221 of 2026, challenging the maintainability of the Liquidator's application. Boeing argued that the advance payments had already been netted off from its outstanding claim against Jet Airways, which was admitted by the Resolution Professional during CIRP and later by the Liquidator to the tune of ₹873.79 crores. Boeing asserted that the dispute involved contractual interpretation governed by Washington State law and required a full trial, not summary proceedings.

The Contractual Conundrum

The tribunal carefully examined the scope of its powers under Section 60(5) of the IBC. Relying on the Supreme Court's decision in Gujarat Urja Vikas Nigam Limited vs. Amit Gupta (2021), the NCLT noted that its residuary jurisdiction is limited to questions of law or fact arising out of or in relation to insolvency proceedings. The court emphasized that it cannot adjudicate disputes that are independent of the insolvency process and require examination of contractual terms, evidence, and foreign law.

The tribunal observed that both parties had raised counterclaims regarding the treatment of advance payments upon termination of the agreements. Whether Boeing was entitled to retain, forfeit, or set off the advance payments depended on the specific terms of the purchase agreements—documents that were not produced before the tribunal.

"These questions require evaluation of Agreements between the Parties, leading of evidence by the Parties and a full-fledged Trial ," the tribunal noted.

The Liquidator's reliance on Regulation 29 of the IBBI (Liquidation Process) Regulations, 2016, concerning set-off in mutual dealings, was also rejected. The NCLT held that the applicability of set-off could not be determined without first interpreting the contracts.

Key Observations from the Bench

The tribunal made several pivotal observations in its 39-page order:

"The dispute between the Parties in the present case certainly revolves around the Purchase Agreements between the Parties unless those Agreements are tested and the claims are crystallised upon the adjudication of dispute between the Parties under the Contract, the proceedings cannot be said to be emerging out of the Insolvency Process."

"The Liquidator has attempted to enforce the Contract without producing that Contract or terms of the Contract and get the refund of the advance paid by filing this Application, which this Tribunal would not be competent to exercise power under Section 60(5) of the IBC."

Regarding the set-off argument, the tribunal held: "The question of set off of the claims between the Parties is required to be evaluated from the testing of the Purchase Agreements between the Parties and therefore, in the summary jurisdiction …this Tribunal cannot go into the question of legality or otherwise of the contract between the Parties."

Final Verdict

The NCLT dismissed IA No. 2737 of 2026 filed by the Liquidator, holding that it lacked merit. Consequently, IA No. 3221 of 2026 filed by Boeing was also disposed of. No order was made as to costs.

The decision underscores the limitations of the NCLT's summary jurisdiction under the IBC. Liquidators seeking recovery of disputed contractual amounts must approach civil courts or other appropriate forums for adjudication of claims that involve complex questions of fact and law requiring full trial. The ruling serves as a reminder that the IBC's framework is designed to facilitate insolvency resolution and liquidation, not to serve as a substitute for contractual dispute resolution mechanisms.