Azman Air Seeks FG’s Intervention over $22m Fine

Chinedu Eze

Azman Air Services Limited has approached the Attorney General of the Federal to intervene and stop the lessor, Triple Seven MSN 27251 Limited and Triple Seven (CIS) Limited, from seizing any of its aircraft over contract breach in which court ordered the airline to pay $2 million to lessors.

The companies had sued the Nigerian airline over breach of contract, which the high court of justice, business and property courts of England and Wales commercial court ruled that Azman Air Services Limited pay $22 million.

The companies which are owners of two Boeing 777-200 ER aircraft (MSN 27251 and MSN 27252) sued Azman for defaulting on lease agreement.

Azman had signed an agreement to lease the aircraft in 2016 for five years to transport passengers from West Africa to Saudi Arabia for Hajj and Umrah pilgrimages.

According to court papers, Azman received confirmation from the National Hajj Commission of Nigeria (NAHCON) that it was approved to participate in the airlift of passengers for the 2016 pilgrimage on May 11, 2016.

“However, this was not the only approval which was required in order to participate in the 2016 Hajj airlift; the approval of the Saudi authorities was also required,” the court papers read.
“On June 15, 2016, NAHCON sent a letter to Azman informing it that the General Authority of Civil Aviation of Saudi Arabia (GACA) had excluded Azman from participation in the 2016 Hajj airlift because it had not met Saudi economic, security and safety requirements.
“However, Azman did not receive this letter until some hours after it had signed the lease agreements on 20th June 2016. Azman sought to persuade GACA to change its mind and to approve Azman to participate in the airlift for the 2016 pilgrimage, but these attempts were not successful,” the court papers said.

According to the Cape Town Convention Protocol, which Nigeria is a signatory, the lessors have the right to seek compensation for breach of agreement.

THISDAY learnt that Azman Air, was seeking the intervention of the federal government so that the lessors would not seize any of its aircraft when being ferried overseas for maintenance because with the court ruling, any aircraft owned by the airline could be seized anywhere in the world.

Azman, in the document, reminded the government that if the airline goes under, about 1000 personnel employed by the Kano based company could lose their jobs.

When THISDAY called the CEO of the airline, Muhammed Hadi Abdula Munat, he said declined to comment on the issue.
NCAA source however said that the airline has appealed against the judgment in order to nullify the $2 million penalty for contract breach.

According to the court papers, on July 6-7 2016, Azman informed the claimants that it was not in a position to take delivery of the aircraft, because it was no longer able to participate in the 2016 Hajj airlift, which was the major reason or one of the major reasons for Azman’s entry into the lease agreements.

In response, on July 8, 2016, the claimants called on Azman to take delivery of the aircraft. On 12th July 2016, Azman said was not in a position to accept the aircraft and numbers provided on the company’s website were also not reachable.

However, spokesman of NCAA, Sam Adurogboye, explained to THISDAY that Azman never used the aircraft because it did not get the needed approval to operate hajj but it had negated the agreement with the lessors and on that the court ordered that it pay $22 million for breach of agreement.

Nigerian airlines have become notorious for breaching leasing agreement contracts and this has tarnished the image of the country in international aviation circles.

In fact, some lessors have already blacklisted Nigerians airlines and cannot lease aircraft to them.

THISDAY learnt that some leasing companies like Air Cab have foreclosed leasing aircraft and engine to Nigerian airlines due to its experience with Nigerian airlines and recently it had severed leasing agreement with a Nigerian carrier, as another Nigerian airline seized its aircraft and used court decisions to frustrate it from taking back its equipment.

Industry experts say there is no way the federal government can intervene in stopping the lessors from taking back their aircraft and any attempt to do that would be injurious to the image of the country.