Saudi Arabian Airlines Corporation v Sprite Aviation No. 6 Designated Activity Company
[2023] EWHC 1758 (Comm)
Saudi Arabian Airlines Corporation v International Airfinance Corporation & Ors
5 February 2024
[2024] EWHC 242 (Comm)
High Court
An airline sued its aircraft lessors because of notices saying they had broken their lease agreement. The judge said there were good enough reasons to argue the lessors' notices were wrong, so partially stopped them from using the notices while the full case is heard. The judge also decided how much money the airline had to put aside to pay the lessors if they won the case, but that decision was kept private.
Key Facts
- •Saudi Arabian Airlines Corporation (Claimant) leased 49 aircraft from various lessors (Defendants).
- •Defendants issued notices of default under the lease agreements.
- •Claimant sought interim injunctive relief to prevent Defendants from relying on the notices of default.
- •The dispute centered on the interpretation of lease clauses regarding maintenance, notice periods, and materiality of covenants.
- •The Claimant is a Saudi Arabian national airline ultimately owned by the Saudi Arabian government.
Legal Principles
American Cyanamid test for interim injunctions
American Cyanamid v Ethicon Ltd [1975] AC 396
Court's approach to contractual construction in interim injunction applications
This case
Principles for determining appropriate fortification for cross-undertakings in damages
This case
Outcomes
Interim injunction granted in part.
The court found that the Claimant had demonstrated sufficiently serious triable issues regarding the validity of the notices of default, particularly concerning the interpretation of clauses relating to reasonable efforts for part replacement and the definition of 'non-material covenant' which affects the required notice period.
Defendant's undertaking accepted regarding one notice of default.
The Defendants agreed not to rely on a specific notice of default, rendering the injunction unnecessary for that notice.
Fortification amount determined in private session.
The court heard evidence and submissions on fortification in private due to confidentiality concerns.
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