CIT Group Finance (Ireland) Unlimited Company v Spicejet Limited [2026] EWHC 1277 (Comm)

[2026] EWHC 1277 (Comm)Case No CL-2024-000639
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 3 rd June 2026
Before
SIMON COLTON KCSITTING AS A JUDGE OF THE HIGH COURT
Between
CIT GROUP FINANCE (IRELAND) UNLIMITED COMPANYClaimantSPICEJET LIMITEDDefendant
Rupert Allen KC and Samuel Burns (instructed by Clifford Chance LLP) for Claimant / ApplicantTom Sprange KC and Kabir Bhalla (of King & Spalding International LLP) for Defendant / RespondentHearing Hearing date: 19 th May 2026
JUDGMENT

SIMON COLTON KC:

[1]This is an application for summary judgment. The claimant and applicant (‘CIT’) carries on business as a lessor of aircraft. The defendant and respondent (‘SpiceJet’) carries on business as a commercial airline.

The factual background

[2]Pursuant to two operating lease agreements (the ‘Lease Agreements’) entered into in 2018, two Boeing 737-8MAX aircraft (the ‘Aircraft’) were leased to SpiceJet by Avolon Aerospace Leasing Ltd (‘Avolon’). In late 2018, and 2019, CIT replaced Avolon as lessor under the Lease Agreements. These Lease Agreements were amended and restated on 30 December 2021. The Lease Agreements required that the Aircraft be redelivered by SpiceJet to CIT in the ‘Redelivery Condition’ (the ‘Lease Redelivery Condition’).[3]From February to September 2023, SpiceJet failed to make various payments of rent and supplemental rent as and when they fell due under the Lease Agreements. SpiceJet says this was because of reduced cashflow arising out of the worldwide grounding of 737-8MAX aircraft, and the Covid-19 pandemic.[4]On 8 May 2023 and 26 September 2023, CIT sent notices of Events of Default to SpiceJet, demanding payment of overdue rent and supplemental rent and associated default interest, while reserving all rights under the Lease, including to claim damages for breach of the Lease. It is common ground that SpiceJet failed to remedy these Events of Default and, save for some partial payments made between July and November 2023 and two further partial payments on 29 December 2023, failed to pay further sums to CIT as they fell due.[5]On 2 January 2024, CIT and SpiceJet entered into written agreements for the early termination of the Lease Agreements (the ‘ETAs’). The ETAs provided that, from the ‘Early Termination Date’, the leasing of the Aircraft under the Lease Agreements would terminate, and SpiceJet was required to redeliver the Aircraft to CIT in accordance with certain specified redelivery conditions (the ‘ETA Redelivery Condition’). The ETA Redelivery Condition was less onerous than the Lease Redelivery Condition. In consideration of CIT agreeing to the early termination of the leasing of the Aircraft under the Lease Agreements, SpiceJet agreed to pay CIT all the accumulated outstanding rent and supplemental rent and associated default interest up to an including the Early Termination Date. By clause 13.14 of the ETAs (‘clause 13.14’), CIT and SpiceJet agreed:
“Any failure to comply with the terms of this Agreement shall at the Lessor’s discretion render this Agreement null and void and the Lessor may revert to the terms of the Lease in place prior to date of this Agreement, in particular in respect of the Redelivery Condition and payments due thereunder and proceed in accordance with the relevant terms of the Lease. The Lessor also reserves its rights to claim for the full amount of Basic Rent to be paid under each Lease and to apply the Security Deposit to outstanding sums as it sees fit.”
[6]On 9 February 2024, pursuant to the ETAs, SpiceJet returned the Aircraft to CIT at Hyderabad International Airport. CIT issued ‘Redelivery Acceptance Certificates’ (the ‘ETA Redelivery Certificates’), confirming compliance with the ETA Redelivery Condition.[7]In June and July 2024, the Aircraft were re-leased, by another company in the Avolon group, to new lessees.[8]On 11 November 2024, CIT sent demand notices to SpiceJet for rent and supplemental rent which CIT said remained due and owing under the ETAs. On 14 November 2024, CIT sent two further notices to SpiceJet, purporting to exercise its right under clause 13.14 to treat the ETAs as null and void and to revert to the terms of the Lease Agreements.[9]On 22 November 2024, CIT issued the present proceedings. CIT alleges that it validly exercised its rights under clause 13.14. CIT alleges that SpiceJet has failed to pay rent and supplemental rent due under the Lease Agreements, and that the Aircraft did not satisfy the Lease Redelivery Condition when they were repossessed by CIT on 9 February 2024. CIT claims payment of unpaid rent and supplemental rent; the costs associated with recovering possession of the Aircraft; the cost of restoring the Aircraft to the Lease Redelivery Condition; and the cost of leasing replacement engines and of reconfiguring each of the Aircraft for the purpose of entering into replacement lease agreements for the Aircraft, together with additional insurance costs and legal fees.[10]SpiceJet defends these claims on the basis, in particular, that, by issuing the ETA Redelivery Certificates, CIT waived any rights to require redelivery under the Lease Agreements, or is estopped from arguing that the Aircraft had been redelivered under the Lease Agreements and not under the ETAs; and that the contractual discretion in clause 13.14 was required to be exercised rationally, in good faith, and in accordance with its commercial purpose, which in the circumstances of the case it was not. SpiceJet admits, however that certain sums (the ‘Undisputed Sums’) are due and owing to CIT. SpiceJet say the Undisputed Sums are due under the ETAs; CIT says these sums are due under the Lease Agreements.

The contractual framework and construction of clause 13.14

[11]Clause 20 of the Lease Agreements, headed ‘Remedies’, provides a range of remedies which might be available to CIT, as Lessor, following an Event of Default.[12]Clause 20.1 permits the Lessor, at its option, to take any of a number of steps including proceeding by court action; accepting the Event of Default as a repudiation of the agreement and terminating the leasing of the Aircraft; directing SpiceJet as Lessee to ground the Aircraft at a location required by CIT; requiring redelivery of the Aircraft to CIT; or repossessing the Aircraft.[13]Clause 20.3 is headed ‘Payments’. It provides, so far as presently material:
“If an Event of Default occurs or the Lessor terminates the leasing of the Aircraft under this Agreement pursuant to Clause 21 (Illegality), the Lessee will indemnify the Lessor and pay to the Lessor from time to time on written demand against any Loss which the Lessor may sustain or incur directly or indirectly as a result of such Event of Default, including: (a) all the Rent the Lessee already owes (if any) and any other amounts the Lessee owes under the Transaction Documents; … (c) all costs and expenses incurred by the Lessor in recovering possession of the Aircraft and in carrying out any works or modifications required to put the Aircraft into the Redelivery Condition and in storing and insuring the Aircraft following such repossession; (d) all legal fees and out-of-pocket expenses, stamp, documentary, registration or other like duties, taxes or charges incurred by the Lessor and/or the Lessor’s professional advisers, in connection with enforcing, protecting, or preserving (or attempting to enforce, perfect, protect or preserve) any of the Lessor’s rights, or in suing for or recovering any sum, under the Transaction Documents…”
[14]‘Loss’ is defined as:
“any cost, expense (including the fees of professional advisers and out-of-pocket expense), financial liability, damage or monetary loss of any kind.”
[15]It is not in dispute that, in early January 2024, immediately prior to the conclusion of the ETAs, Events of Default had occurred. As a result, under the Lease Agreements, CIT was entitled to pursue any or all of these remedies. However, in practice, it could have been costly and time-consuming for CIT to vindicate its rights. The Aircraft were in India, where court proceedings could prove cumbersome, and SpiceJet was struggling to pay sums it owed.[16]The ETAs provided an alternative route to what might have been a costly, difficult and potentially disruptive repossession action by CIT. By clause 2, the parties agreed, “subject to the provisions and/or fulfilment of the requirements set forth in this Agreement” that the leasing of the Aircraft under the Lease would terminate as of and with effect from the Early Termination Date, and that, following the redelivery of the Aircraft, each would be released from obligations under the Lease Agreements. However:
“For the avoidance of doubt, the Lessee and the Lessor agree, save as expressly agreed in this Agreement, that the Lessor and the Lessee shall each continue to have the same rights and remedies against each other as each would have had under the Lease in respect of (i) any losses, liabilities or claims suffered or incurred by or brought against each other, whether or not such losses, liabilities or claims arose prior to or after the Effective Time (provided that the event, occurrence or circumstance which gave rise to such losses, liabilities or claims occurred prior to the Effective Time), and (ii) any payment due to each other in each case, in respect of or attributable to the period prior to the Effective Time. The parties further agree that the Lessee shall not be held liable for any losses or claims suffered by the Lessor as a result of the early termination of the leasing other than as expressly agreed hereunder.”
[17]By clause3.1 of the ETAs, it was agreed that SpiceJet would pay CIT certain agreed sums in respect of Rent and Supplemental Rent, due and owing under the Lease Agreements, for the period prior to the return of the Aircraft. Clause3.2 provided:
“If following the execution of this Agreement, the Lessee fails to comply with its payment obligations in clause 3.1, the Lessor and the Lessee agree that, without prejudice and in addition to any other rights of the Lessor under the Lease, the Lessee's obligation to pay the Lessor any Rent, Maintenance Payment and other amounts due and/or payable under the Lease, including any Loss or damage suffered by the Lessor as a result, shall remain in full force and effect, as if clause 3.1 of this Agreement were never in force and effect.”
[18]Clause 4 of the ETAs provided for the Aircraft, on redelivery, to meet the ETA Redelivery Condition standard.[19]Clause 13.14 is cited at paragraph 5 above. Putting to one side, for now, SpiceJet’s pleaded defences, on behalf of CIT, Mr Allen KC submitted that the meaning and effect of this clause, in the undisputed factual context of this case, is clear. I accept that submission. As Mr Allen KC submitted, where SpiceJet was in breach of terms of the ETAs, clause 13.14 gives CIT the power to terminate the ETAs, and to revert to the remedies available to CIT under the Lease Agreements. So, here, where it is undisputed that substantial sums which should have been paid under clause 3.1 of the ETAs had not been paid, CIT was entitled (subject to the pleaded defences) to terminate the ETAs, and revert to its claims under the Lease Agreements. Those claims include claims for all Loss resulting from the Events of Default which had taken place in 2023. Those Losses included, as a matter of fact, that (at least on CIT’s case) when CIT had regained possession of the Aircraft on 9 February 2024, the Aircraft did not meet the Lease Redelivery Condition.[20]Mr Sprange KC on behalf of SpiceJet argued that the effect of clause 13.14, properly interpreted, was more limited. On his feet, he submitted: “It’s true that it preserves the right to go back to the Lease, but only to go back to the Lease where there are clear and obvious remedies, and one of those would certainly be a preserved right to bring claims under 20.3”.[21]Mr Sprange KC submitted that, once the Aircraft had been redelivered under the ETAs, on its proper construction clause 13.14 permitted CIT to claim for unpaid rent (pleaded as Head of Loss 1) and the costs of recovering possession of the Aircraft (pleaded as Head of Loss 2), but not the costs of restoring the Aircraft to the Lease Redelivery Condition (pleaded as Head of Loss 3). I was unable to follow the chain of reasoning here. I cannot see on what basis Mr Sprange KC conceded the recoverability of costs of recovering possession (which costs were not recoverable under the ETAs, but recoverable under clause 20.3(c) of the Lease Agreements), but disputed the recoverability of costs of restoring the Aircraft to the Lease Redelivery Condition following such repossession (which costs were also recoverable only under clause 20.3(c) of the Lease Agreements). Nor could I understand the distinction between “clear and obvious remedies” and other remedies.[22]I was troubled at the notion that what CIT was claiming could be regarded as retrospective, in that it imposed on SpiceJet the obligation to have delivered on 9 February 2024 the Aircraft meeting the Lease Redelivery Condition, when, on the basis of the contractual arrangements then in place under the ETAs, the Aircraft only had to satisfy the (less onerous) obligations of the ETA Reelivery Condition. However, I am satisfied that that is not what CIT is claiming. CIT’s claim is not that there was a breach of the Lease Agreements when the Aircraft were redelivered under the ETAs on 9 February 2024. Rather, CIT’s claim is simply to resurrect the remedy, to which it was already entitled under the Lease Agreements before the ETAs were concluded, to be indemnified against all Losses flowing from the Events of Default which occurred in 2023.[23]Commercially, the parties could have agreed something different, as I understood Mr Sprange KC to submit. The parties could have agreed that if the Aircraft were returned, under the ETAs, in a state of repair matching the ETA Redelivery Condition, then any claims for the costs of restoring the Aircraft to the (higher) standard of the Lease Redelivery Condition would be given up by CIT, even if SpiceJet continued to default on outstanding payments and even if CIT exercised its rights under clause 13.14. However, I can see nothing in the language of the ETAs generally, nor in the particular language of clause 13.14, to support such an interpretation. On the contrary, the language of clause 13.14, in my judgment, made clear that any failure by SpiceJet to comply with the terms of the ETAs would entitle CIT to “revert to the terms of the Lease in place prior to the date of this Agreement, in particular in respect of the Redelivery Condition and any payments due thereunder”, which included all payments due under clause 20.3 of the Lease Agreements including (but not limited to) payments to restore the Aircraft to the Lease Redelivery Condition. This entitlement was not curtailed when the Aircraft were in fact redelivered at a time when the ETAs were in force.

The issues arising in the present application

[24]The issues arising on the present application are: i) Whether CIT is entitled to summary judgment on its claim for the Undisputed Sums, in circumstances where there is a dispute as to whether those sums are due under the ETAs or under the Lease Agreements; ii) Whether CIT is entitled to summary judgment on liability on the balance of its claim, or whether, as SpiceJet alleges: a) There is an implied obligation in clause 13.14 that the contractual discretion will be exercised rationally, in good faith, and for good commercial purpose (conveniently referred to as the ‘Braganzaduty’), and SpiceJet has a real prospect of the judge at trial finding that CIT did not exercise the contractual discretion in that way; and/or b) The ETA Redelivery Certificates gave rise to a contractual or promissory estoppel or waiver which precludes CIT from asserting any rights under the Lease Agreements, even where CIT had exercised its right under clause 13.14 to set aside the ETAs.

Summary judgment applications: the law

[25]The principles applicable to an application for summary judgment are well-known. The summary of those principles set out by Lewison J in Easyair v Opal Telecom [2009] EWHC 339 (Ch) at [15] has been repeatedly followed and has been approved by the Court of Appeal. In particular, as Lewison J held at [15(vii)]:
“On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.”
[26]More recently, in Resource Recovery Solutions (Derbyshire) Ltd v Derbyshire County Council [2023] EWHC 708 (TCC) (‘Resources Recovery Solutions’), at [30] Constable J distilled a number of principles from the authorities as follows (with references omitted): “(1) Just because a point of construction is difficult or complex does not mean of itself it cannot be considered as a ‘short’ one for the purposes of a summary judgment application …. (2) no difficulty generally arises where the Court is persuaded that the construction a party contends for has no reasonable prospect of success. Where the point of construction is ‘clear’, summary judgment will generally follow …; (3) a more difficult assessment of the appropriate course to take arises where both parties’ contentions would – without more – be described as having real prospects of success. In these circumstances, a broader view of the appropriateness of finally determining the issue summarily will usually be relevant; (4) in these circumstances, the Court should bear in mind whether the declaration would serve a useful purpose …. In particular:(a) will deciding the issue(s) to be determinative of the whole or a substantial part of the dispute? … If it will, this will militate towards grasping the nettle. If not, the Court may be more circumspect about doing so. This is because parties should not generally be encouraged to add potentially costly steps into the route to trial which (even if right) add to, rather than reduce, the costs of conducting litigation for little practical benefit;(b) by analogy, is the issue the sort of matter the Court would encourage parties to hear by way of a preliminary issue because, even if not determinative of the whole or a substantial part of the dispute, its resolution will provide considerable case management benefits? If it is, summary determination will be more appropriate; if, however, the Court would not have considered it appropriate to have dealt with the matter by way of preliminary issue because of a lack of practical case management benefit, the Court may again be slow to allow summary judgment on a point of construction unless the answer is clear;(c) it follows from this, an important, although not determinative, question will often be whether there will need to be a full trial on liability involving evidence and cross examination in any event, or where summary disposal of the single issue may well delay, because of appeals, the ultimate trial of the action …; (5) whilst the question whether there is evidence relevant to interpretation which is both likely to exist and can be expected to be available at trial is an important one, it is not determinative where the answer to the point of construction is not clear: even if the court may consider that it is capable of grasping the nettle, there may nevertheless be good reasons to conclude that it are best left to trial …” (a) will deciding the issue(s) to be determinative of the whole or a substantial part of the dispute? … If it will, this will militate towards grasping the nettle. If not, the Court may be more circumspect about doing so. This is because parties should not generally be encouraged to add potentially costly steps into the route to trial which (even if right) add to, rather than reduce, the costs of conducting litigation for little practical benefit; (b) by analogy, is the issue the sort of matter the Court would encourage parties to hear by way of a preliminary issue because, even if not determinative of the whole or a substantial part of the dispute, its resolution will provide considerable case management benefits? If it is, summary determination will be more appropriate; if, however, the Court would not have considered it appropriate to have dealt with the matter by way of preliminary issue because of a lack of practical case management benefit, the Court may again be slow to allow summary judgment on a point of construction unless the answer is clear; (c) it follows from this, an important, although not determinative, question will often be whether there will need to be a full trial on liability involving evidence and cross examination in any event, or where summary disposal of the single issue may well delay, because of appeals, the ultimate trial of the action …;

Issue (i): Summary judgment on the Undisputed Sums?

[27]SpiceJet accepts that it is liable to pay the Undisputed Sums, but says those sums are due not under the Lease Agreements, but under the ETAs. SpiceJet initially contended that since the contractual basis on which CIT seeks summary judgment is contested, it is inappropriate to decide this matter summarily, and the matter should be left to be determined at trial.[28]CIT cites Sagicor Bank Jamaica v Taylor-Wright [2018] UKPC 12 at [16]-[21] as authority for the proposition that summary judgment can (and, indeed, should) be given on a claim which is contested where, even if the pleaded defence were true, the claimant would still be entitled to the sum claimed. In my judgment, as I understand SpiceJet ultimately to have conceded, that is the position here: it makes no difference to CIT’s entitlement to be paid the Undisputed Sums whether the liability arises under the ETAs or under the Lease Agreements. Accordingly, I conclude that summary judgment can and should be given in CIT’s favour on the Undisputed Sums.[29]Moreover, I do not consider that there can be any doubt that the Undisputed Sums are due under the Lease Agreements. Clause 3.2 (set out at paragraph 17 above) is clear in this regard. The sums were due under the Lease Agreements; clause3.1 of the ETAs contained a further and additional requirement that they be paid under the ETA; but clause3.2 makes clear that if SpiceJet failed to pay (as it did), then the obligation to pay under the Lease Agreements would remain.

Issue (ii)(a): the Braganza duty

(a) : the Braganza duty

[30]The next issue concerns SpiceJet’s contention that, on the facts of the case, CIT was not entitled to invoke clause 13.14.[31]In Braganza v BP Shipping Ltd [2015] UKSC 17, [2015] 1 WLR 1661 (‘Braganza’), the Supreme Court recognised that where a contract confers a discretion on one party, the law can imply a duty that that discretion must be exercised rationally and in good faith (the Braganza duty).[32]There is a line of recent authorities which hold that where a contract confers a right to terminate, that right is not subject to a Braganza duty and the party entitled to terminate a contract may do so for any reason, or none. See: Monde Petroleum SA v Westernzagros Ltd [2016] EWHC 1472 (Comm), [2017] 1 All ER (Comm) 1009 at [261]; TAQA Bratani Ltd v Rockrose UKCS8 LLC [2020] EWHC 58 (Comm), [2020] 2 Lloyd’s Rep 64 at [44]-[53]; Lombard North plc v European Skyjets [2022] EWHC 728 (QB) at [152]. By contrast, Lord Leggatt (concurring) in USDAW v Tesco [2024] UKSC 8, [2025] 2 All ER 565 (‘USDAW’) at [114]-[120] doubted whether there is any special rule for termination clauses, albeit recognising the argument that the underlying rationale for the Braganza duty – “contracting parties may reasonably expect each other to act in good faith and in a spirit of cooperation in carrying out the contract” – may not apply where the relevant power will bring to an end the relationship entirely. In the present case, however, clause 13.14 does not operate as a straightforward termination provision. Although the exercise of clause 13.14 renders the ETAs “null and void”, it does not bring the contractual relationship between CIT and SpiceJet to an end. Rather, the exercise of clause 13.14 causes the parties to revert to their pre-existing contractual relationship under the Lease Agreements. So, there can be no short-cut to the answer. Rather, the determination whether a Braganza duty is implied in the contractual structure must be “the result of a process of construction which takes account of the characteristics of the parties, the terms of the contract as a whole and the contractual context”: per Males LJ in Equitas Insurance Ltd v Municipal Mutual Insurance Ltd [2019] EWCA Civ 718, [2020] QB 418 (‘Equitas’) at [113]. As Males LJ explained:
“It is only possible to say whether a term conferring a contractual choice on one party represents an absolute contractual right after that process of construction has been undertaken. To say that a term provides for an absolute contractual right and therefore no term can be implied puts the matter the wrong way round.”
[33]As with any implied term, it is necessary for the court to consider, where a Braganza duty is alleged, whether such a duty is necessary to give business efficacy to the arrangement: see, for example, per Leggatt LJ in Equitas at [150]; and Horlick v Cavaco [2022] EWHC 2935 (KB) (‘Horlick’) at [168]. That requires a consideration of the contractual purpose to be achieved by the proposed implied term: see British Telecommunications plc v Telefónica O2 UK Ltd [2014] UKSC 42 at [37], per Lady Hale in Braganza at [30]; and per Lord Leggatt in USDAW at [106]. As Freedman J held in Horlick at [171], the notion of the contractual purpose behind a discretion was the basis for HHJ Waksman QC’s observations in Watson v Watchfinder.co.uk [2017] EWHC 1275 (Comm), [2017] Bus LR 1309 (‘Watson’) at [105] where he said:
“In order to assess whether there has been compliance with the Braganza Duty in connection with any particular contractual discretion it is necessary to know what the “target” of that discretion is, in the sense of what the decision-maker is meant to be considering when deciding whether or not to exercise it. In many cases this is straightforward and is stated as part of the discretion. That is so, for example, if the discretion relates to one party's opinion as to what is a “reasonable value” or its judgment or opinion as to whether a particular event has happened, for example whether the deceased in Braganza's case [2015] 1 WLR 1661 had committed suicide. Alternatively, the court has explained the ambit of the discretion by reference to its ostensible purpose; so the exercise of the landlord's discretion as to whether or not to permit an assignment of the lease to a new potential tenant is not open-ended but is directed to the suitability or otherwise of that person as a tenant for the purpose of the performance of his obligations going forward, both in relation to the landlord and also other tenants.”
[34]In the present case, however, I can see no basis for implying a Braganza duty into clause 13.14. I can see no contractual purpose that requires it. The contractual purpose of the ETAs was to incentivise SpiceJet to return the Aircraft and to pay the outstanding rent, in return for CIT’s forbearance from enforcing remedies to which it would otherwise be entitled. If SpiceJet complied with the ETAs, then it would no longer be liable for the payments otherwise due under clause 20 of the Lease Agreements. But, for so long as SpiceJet had not fully complied with its obligations under the ETAs, CIT retained the right to ‘pull the rug’ (in Mr Allen KC’s useful formulation), and revert to its entitlements under the Lease Agreements. In my judgment, CIT could decide for itself how patient it was willing to be and owed no duty to SpiceJet in that regard. To adopt the language of HHJ Waksman QC in Watson, there is no ‘target’ for any proposed discretion here: any exercise of clause 13.14 would be to SpiceJet’s disadvantage in resurrecting its prior, more onerous, obligations; and there is no contractual metric by which to decide whether CIT should be entitled to cause such disadvantage.[35]SpiceJet argues that the “objective commercial purpose of clause 13.14 was to provide for an orderly early termination of the leasing arrangement” (Mr Mishra's witness statement, paragraph 20.3). It is not entirely clear to me what that means, but in any event there is nothing ‘disorderly’ in the consequences of clause 13.14 being engaged. SpiceJet also argues that the words “at the Lessor’s discretion” necessarily imports the Braganza duty, but that seems to me to put matters the wrong way round: clause 13.14 certainly does give CIT a choice, which is labelled a ‘discretion’, but whether CIT owes a Braganza duty does not turn on whether the label ‘discretion’ is used, but on a process of construction of all the language used in its contractual context.[36]SpiceJet refers to UBS AG v Rose Capital Ventures Ltd [2018] EWHC 3137 (Ch) at [49] for the principle, one of a number drawn from the authorities by Chief Master Marsh, that the types of contractual decisions that are amenable to the implication of a Braganza duty are those “which affect the rights of both parties to the contract where the decision-maker has a clear conflict of interest”, in particular “where one party is given a role in the on-going performance of the contract”. In that paragraph, Chief Master Marsh also drew from the authorities the principle that “The nature of the contractual relationship, including the balance of power between the parties, is a factor to be taken into account”. Here, I have no reason to treat the parties as being on anything other than equal terms, without any imbalance of power, which tells against the need to find the existence of a Braganza duty. In addition, I do not consider there to be a conflict of interest. Although, as I have held, the exercise of the power under clause 13.14 is not quite the same as a termination of the contractual relationship, it is nonetheless similar in nature in terminating a particular stage or form of such relationship. Moreover, as I have indicated, I accept the submission on behalf of CIT that the exercise of clause 13.14 would always be to SpiceJet’s disadvantage. There is no conflict here, no need to weigh the interests or expectations of SpiceJet against the interests of CIT.[37]SpiceJet argues that CIT failed to exercise clause 13.14 rationally, in good faith, and in accordance with its contractual purpose, because the exercise in this context, as it was put in SpiceJet’s skeleton, “operates as a retrospective reversion to the Lease Redelivery Condition in circumstances where:(a) that standard cannot now be retrospectively satisfied or cured... and(b) the exercise of the discretion in that manner makes no coherent sense…”. I do not accept that characterisation. No more do I accept Mr Sprange KC’s argument that it “would be irrational to then try and claim a redelivery approach that you gave up previously in circumstances where you didn’t preserve, in a deeming provision or similar, the right to claim”. The effect of the exercise of clause 13.14 was to enable CIT to pursue an indemnity against SpiceJet for all the Losses resulting from the Events of Default which pre-dated the ETAs. That was a right open to CIT at any time up until SpiceJet made good on all of its obligations under the ETAs. CIT was entitled to be as patient or impatient as it wished in judging how much time to allow SpiceJet. When CIT’s patience ran out, as it did in November 2024, there was no ‘retrospective reversion’ to some standard, there was simply the end of CIT’s forbearance from enforcing its pre-existing rights.

Issue (ii)(b): estoppel and waiver

(b) : estoppel and waiver

[38]SpiceJet argues that there is a contractual estoppel, or promissory estoppel, or waiver, arising from the ETA Redelivery Certificates.[39]It is common ground that, in deciding this question, the court must not approach the ETA Redelivery Certificates in a vacuum, but must interpret all the various contractual documents together.[40]Clause 4.4.2 of the ETAs provides:
“The Lessee and the Lessor agree that: … provided the Aircraft and the Aircraft Documents comply with the condition set forth in Annex A (Conditions for Redelivery) hereof, to the extent the conditions required under this Agreement had been fully complied with by the Lessee, the Lessor shall execute a Redelivery Certificate confirming that the Lessee has redelivered the Aircraft to the Lessor at the Destination ("Redelivery").”
[41]The ‘Conditions for Redelivery’ in Annex A set out the ETA Redelivery Condition which, as is common ground, was less onerous than the requirements of the Lease Redelivery Condition.[42]Annex A to the ETAs begins:
“For the avoidance of doubt, the Lessor's agreement to accept the redelivery of the Aircraft on the basis of the redelivery conditions outlined in this Annex A is subject to the Lessee's full compliance of the conditions required under this Agreement. In the event that the Lessee fails to comply with any of the conditions required under the Agreement, the Lessee agrees and acknowledges that the Aircraft will have to be redelivered to the Lessor in accordance with Schedule 9 (Redelivery) of the Lease.”
[43]There was no contractual provision made for the form of ETA Redelivery Certificate anticipated by clause 4.4.2. However, when SpiceJet redelivered the Aircraft in February 2024, the certificates included the following provisions. i) They began:
“This Redelivery Acceptance Certificate relates to the operating lease agreement (the Lease) dated 6 March 2018 and made between CIT Group Finance (Ireland) Unlimited Company (the Lessor), and SpiceJet Limited (the Lessee) and the early termination agreement dated 2 January 2024 between the Lessor and the Lessee (the “ETA”) (collectively, the Agreement) in respect of … the Aircraft).” ii) Then, on page 3 (including the details relating to one of the two Aircraft): “Unless otherwise defined in this Redelivery Acceptance Certificate, capitalised words and expressions used in this Redelivery Acceptance Certificate shall have the same meanings as given to them in the Lease. 1. The Aircraft has been redelivered to us together with its Aircraft Documents (as per the Aircraft Documents List detailed in Annex 1 to this Redelivery Acceptance Certificate) on the 9th day of February 2024. Redelivery took place on that date at Hyderabad International Airport, India, at 21:33 hours IST. 2. We confirm that we have had the opportunity to inspect the Aircraft and are satisfied that the Aircraft meets all of the requirements necessary for us to accept Redelivery of it and that the Lessee has fully performed all of its obligations under the ETA with respect to that Redelivery. We acknowledge that the Aircraft has been redelivered to us in accordance with the Redelivery Condition of the ETA subject to the exceptions, discrepancies and items noted in this Redelivery Acceptance Certificate. 3. Notwithstanding any discrepancies listed in Annex 2 of this Redelivery Acceptance Certificate, we acknowledge and agree that execution and delivery of this Redelivery Acceptance Certificate is conclusive proof that we have examined and investigated the Aircraft, that the Aircraft and the Aircraft Documents are satisfactory to us and that we have irrevocably and unconditionally accepted the Aircraft for redelivery under the ETA, and that the Lessor has received possession of the same from the Lessee. 4. It is understood and agreed between the parties that this Redelivery Acceptance Certificate shall not in any way constitute, or be deemed to constitute, a waiver, express or implied, of any obligations of the Lessee under the Agreement, including this Redelivery Acceptance Certificate, which, by their terms, survive the termination or expiration of the leasing of the Aircraft, including for the avoidance of doubt, Lessee’s obligation (a) in respect of the payment of the outstanding Rent and Supplemental Rent equivalent to three hundred nine thousand and two-hundred twenty one Dollars and fifty-two cents ($309,221.52) in accordance with the ETA; (b) any Rent and Supplemental Rent falling due and payable from 31 January 2024 until the termination of the leasing in accordance with the ETA (if applicable); and (c) to indemnify the Lessor in relation to the Lessee’s failure to preserve the Engines as required under the Lease. This Redelivery Acceptance Certificate (and any non-contractual obligations arising out of or in connection therewith) shall in all respects be governed by and construed in accordance with the laws of England.”
[44]The parties are agreed that, for the purpose of any rights or obligations arising under the ETAs, these ETA Redelivery Certificates were conclusive proof that the Aircraft met the ETA Redelivery Condition when redelivered by SpiceJet to CIT. That was the contractual purpose of the ETA Redelivery Certificates, for which clause 4.4.2 provided. That was also the plain effect of the language in paragraphs 2 and 3 on page 3 of the ETA Redelivery Certificates. As a matter of law, it is common ground that where parties have agreed to contract on the basis that a certain state of affairs exists, whether or not that state of affairs actually exists, then, for the purposes of that transaction, the parties are estopped from later denying the existence of such state of affairs: see Peekay Intermark Ltd v ANZ Banking Group Ltd [2006] EWCA Civ 386, [2006] 2 Lloyd’s Rep 511 (‘Peekay’) at [56]; Springwell Navigation v JP Morgan Chase [2010] EWCA Civ 1221, [2010] 2 CLC 705 at [143], [169]. As Moore-Bick LJ held in Peekay at [56]:
“There is no reason in principle why parties to a contract should not agree that a certain state of affairs should form the basis for the transaction, whether it be the case or not. For example, it may be desirable to settle a disagreement as to an existing state of affairs in order to establish a clear basis for the contract itself and its subsequent performance. Where parties express an agreement of that kind in a contractual document neither can subsequently deny the existence of the facts and matters upon which they have agreed, at least so far as concerns those aspects of their relationship to which the agreement was directed. The contract itself gives rise to an estoppel: see Colchester Borough Council v Smith [1991] Ch 448, affirmed on appeal [1992] Ch 421.”
[45]A recent summary of the law by Foxton J in Rolls-Royce Holdings v Goodrich [2023] EWHC 1637 (Comm) at [47] is in the following terms:
“The existence of a doctrine of ‘contractual estoppel’ – by which one party makes a promise that the contract is to be approached on the basis that a particular state of affairs prevails, whether or not that is in fact the case – is well-established: see for example Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd [2006] 1 CLC 582 and Springwell Navigation Corp v JP Morgan Chase Bank [2010] 2 CLC 205. Notwithstanding its name, the doctrine is not a species of estoppel properly so-called, but simply a case of the court holding a party to its promise through a form of specific enforcement of the primary obligation assumed by requiring litigation to be conducted on the promised basis (rather than giving some other remedy for breach of that promise). Reflecting the fact that the doctrine is, at heart, about the enforcement of promises rather than protecting reasonable reliance, there is no requirement of unconscionability before the doctrine can be invoked (Springwell, [177]).”
[46]Where the parties disagree, however, is as to whether the ETA Redelivery Certificates, in the present factual context, are effective to preclude CIT from now claiming the Losses it claims to have suffered, on the basis of a factual case that CIT now advances that the Aircraft were in a state of repair that fell short of even the ETA Redelivery Condition when they were redelivered on 9 February 2024. As a matter of fact, SpiceJet has admitted that the Aircraft did not meet the (more onerous) Lease Redelivery Condition at the point of their redelivery.[47]Once again, this appears to me to be an exercise of construction of the relevant documents, looking at the language used in its factual and contractual context.[48]In my judgment, the ETA Redelivery Certificates served a relatively narrow purpose. They determined only that, for the purpose of the ETAs, the parties would proceed on the basis that the ETA Redelivery Condition was met. CIT made no wider promise, and the parties made no wider agreement, than that, and the ETA Redelivery Certificates had no wider effect. Specifically, the contractual scheme recognised that, at any time until SpiceJet had satisfied all of its obligations, CIT could exercise the power in clause 13.14, ‘pull the rug’, and revert to its original entitlements under the Lease Agreements. If that were to happen, then CIT made no promise not to pursue SpiceJet for the costs of restoring the Aircraft to the Lease Redelivery Condition (as had been CIT’s right prior to the conclusion of the ETAs). On the contrary, CIT reserved its right to do so if there were a failure by SpiceJet to meet all of its obligations. This was shown in clause 13.14 of the ETAs, which specified the reversion to the terms of the Lease Agreements in the event of that clause being exercised (see paragraph 5 above); and in the opening language of Annex A (see paragraph 42 above) which specifically provided for the Lease Redelivery Condition to become operative once again in the event that SpiceJet defaulted on its obligations under the ETAs.[49]I understand the alternative construction for which SpiceJet contends to be that the effect of the ETA Redelivery Certificates, in their context, was to prevent CIT ever contending, post-redelivery, either(i) that the Aircraft fell short of the ETA Redelivery Condition, even if clause 13.14 was exercised to render the ETAs null and void; or(ii) that CIT was entitled to recover any costs of restoring the Aircraft to their Lease Redelivery Condition, whatever state of repair they were in fact in on redelivery. I can accept that either of these are contractual provisions which could have been agreed, or promises which CIT could have made. But I cannot find in the language of the ETA Redelivery Certificates or in the overall contractual structure anything to support such an agreement or promise. On the contrary, the overall scheme of the arrangements, exemplified by clause 13.14, is that if SpiceJet does not fully comply with its obligations under the ETAs, then CIT can ‘pull the rug’, without SpiceJet retaining any advantage from having agreed, or partially performed, the ETAs.[50]In any event, I cannot accept SpiceJet’s contention that any contractual estoppel created by the issuance of the ETA Redelivery Certificates could survive the annulment of the ETAs. The effect of clause 13.14 was to render the ETAs “null and void”. In such circumstance, there was no longer a transaction involving the ETAs, but only a reversion to the prior transaction involving the Lease Agreements. The ETA Redelivery Certificates were issued to establish an agreed state of affairs, for the purposes of the ETAs, that the Aircraft met the ETA Redelivery Condition. Once the ETAs ceased to have any force, that agreed state of affairs ceased to have any relevance or application. In this, I adopt and follow the observation of HHJ Paul Matthews in Sofer v Swissindependent Trustees [2019] EWHC 2071 (Ch) at [140]:
“So as it seems to me, a contractual estoppel, being produced in and for the purposes of a particular contract, should be limited in its operation to claims based on that contract, in just the same way as an estoppel by deed is limited to claims on that deed, at all events unless it can be shown that the estoppel contracted for was to have some wider application.”
[51]On behalf of SpiceJet it was argued that the final paragraph on page 3 of the ETA Redelivery Certificates (cited at paragraph 43 above) had the effect of creating an independent contractual agreement between the parties, which survived any decision under clause 13.14 to render the ETAs null and void. My attention was drawn, in this regard, to an obiter dictum of Tomlinson LJ in Olympic Airlines SA v ACG Acquisition XX LLC [2013] EWCA Civ 369, [2013] 1 CLC 775 at [55], followed by Cockerill J in Aquila WSA Aviation Opportunities II Ltd v Onur Air Tasimacilik AS [2017] EWHC 516 (Comm) at [67]. These were cases involving a similar scenario of acceptance certificates, albeit signed there by lessees of aircraft. However, I do not consider that this argument assists SpiceJet. In my judgment, even assuming the ETA Redelivery Certificates to be independent binding contracts, the contractual effect of exercising the power under clause 13.14 is that the ETA Redelivery Certificates too ceased to bind: they were rendered “null and void” on the basis that they were delivered under clause 4.4.2 of the ETA. But, even if they could survive independently of the ETAs, they would still require to be construed. In my judgment, there is nothing in their construction – set in their contractual context which includes clauses 4.4.2 and 13.14 of the ETAs – which leads to the conclusion that, after the exercise of the clause 13.14 power, the ETA Redelivery Certificates preclude CIT from claiming all its pre-existing Losses relating to the state of repair of the Aircraft, nor require CIT to treat the Aircraft as having been in the ETA Redelivery Condition for the purposes of calculating Losses under clause 20.3 of the Lease Agreements.[52]For these reasons, I conclude that there is no contractual estoppel which results from the ETA Redelivery Certificates. Nor do I accept SpiceJet’s alternative cases of promissory estoppel or waiver, for essentially two reasons. First, it is common ground that the interpretation of an alleged representation for these alternative purposes engages the same process of construction as contractual interpretation: see, e.g., MCI Worldcom International Inc v Primus Telecommunications [2004] EWCA Civ 957, [2004] 2 All ER (Comm) at [30]. As a matter of construction, I can no more find an unqualified promise or agreement by CIT in the ETA Redelivery Certificates to treat the Aircraft as having met the ETA Redelivery Condition, or to preclude claims for Losses based on the state of repair of the Aircraft, than I could in the context of the contractual estoppel argument. Second, unlike contractual estoppel, promissory estoppel and waiver require proof that SpiceJet relied to its detriment on the alleged representation or promise. Were there evidence of this, it would be within SpiceJet’s control. But all that SpiceJet has put forward in this regard is a vague assertion that SpiceJet relied “in relation to its financial reporting and adjustments made in its book of accounts at the end of the quarter in March 2024” (Mr Mishra’s witness statement, paragraph 21). That is, in my judgment, wholly inadequate to meet the ‘real prospect of success’ standard.

Compelling reason for trial?

[53]SpiceJet argues that I should not determine the legal questions arising on its case – that is, the question of the Braganza duty; and the estoppel and waiver arguments – on the basis that there are factual matters in dispute, or because the issues are complicated and not suitable for summary determination, or because there is going to be a trial in any event, or because something relevant might turn up on disclosure.[54]I do not accept this submission. I can see no relevant factual dispute which would impact on either the Braganza duty or the estoppel or waiver defence. Having regard to the principles distilled by Constable J in Resource Recovery Solutions (see at paragraph 26 above), I do not consider that the arguments are too complicated to be dealt with summarily. And, while acknowledging that a decision on liability alone may have limited impact on the overall scale of any trial of this matter, I consider that deciding the question of liability will provide the benefit of early certainty for the parties, narrowing the issues between them and promoting the prospects of settlement. Even if the argument is a relatively short one, as the one-day hearing before me demonstrated, the significance of a finding that SpiceJet in principle is liable under all the heads of Loss is potentially a significant one. This seems to me to be a case where the court can and should ‘grasp the nettle’ and decide the issues of construction which arise, for the benefit of both parties. On his feet, Mr Sprange KC submitted that “really all of the issues – Braganza, contractual interpretation, estoppel – come down to an interpretation of those agreement[s] and how they work together”. I agree with that, and consider that this court is well-placed summarily to decide those questions of interpretation.

Conclusion

[55]For these reasons, I shall: i) Order payment of the Undisputed Sums, together with contractual interest, less credit against the Security Deposits held by CIT; and ii) Grant summary judgment on the issue of SpiceJet’s liability in principle for the various other heads of Loss claimed to have resulted from the Events of Default, subject always to questions of causation and quantum.