Dynamic International Airways (2D, Greensboro) has filed for Chapter 11 bankruptcy protection in the United States as it attempts to recuperate from litigation with Air India (AI, Mumbai Int'l) which saw it hit with damages of USD10 million. The US ACMI/charter specialist said in a statement that it will continue to offer normal services while working through a reorganization process.

In March this year, an Indian arbitration court found in favour of Air India over a dispute regarding Hajj services contracted in 2013 and 2014. Under the contract, Dynamic was to provide India-Saudi Arabia charter capacity, but supplied only four of the five agreed aircraft, resulting in delays and cancellations for Air India's passengers. A countersuit filed by Dynamic alleging breach of contract was rejected. The US District Court for the Middle District of North Carolina then moved to affirm an arbitration award against Dynamic Intl. issued by the Canadian Arbitration Association in April. The award determined that Dynamic Intl. was in breach of contract by failing to pay commissions to BKP Enterprises, one of two Indian firms that acted on its behalf during the Hajj contract.

As such, Dynamic says that while it has filed a notice of appeal and intends to challenge the judgment and award, it has no immediate recourse to stay the judgment. It has therefore determined that a voluntary filing for Chapter 11 protection is necessary.

"Operating under the protection of the US Bankruptcy Court will enable us to continue to serve our customers, keep our team employed and work with our vendors while we navigate through the challenges presented," CEO Paul Kraus said in a statement. "Once we have completed the reorganization process, we expect Dynamic Intl. to emerge as a stronger company with a sound financial structure that is appropriate not only for today's level of business activity but also for the future."

The North Carolina-based carrier currently offers passenger flights from New York JFK to Georgetown Cheddi Jagan, Guyana and Guayaquil, Ecuador. Its fleet entails two active B767-300(ER)s with two B767-200s and one B767-200(ER) currently parked.