Azman Air (AZM, Kano) has appealed to the Nigerian Federal Government to intervene and prevent two Veling-affiliated Special Purpose Vehicles (SPV) from seizing its aircraft over a USD22 million claim.

Court documents seen by ch-aviation indicate Azman Air signed an agreement with each of Triple Seven MSN 27251 Limited and Triple Seven (CIS) Limited for the dry-lease of B777-200(ER)s msn 27251 and 27252 on five-year contracts back in 2016. The aircraft were to have been deployed on Hajj and Umrah charters.

However, when the carrier was unable to secure authorization from the Saudi authorities, it attempted, in early July 2016, to void the agreement by informing the SPVs that it was no longer able to take delivery of the aircraft.

"… it is pertinent to remind you that one of the major reasons we entered into the Lease Agreement is to participate in the airlift of Pilgrims from Nigeria to Saudi Arabia for 2016 Hajj operations and subsequent Hajj operations, within the Lease period," Azman Air said in its letter to the SPVs.

"To attest to this fact, find attached copy of letter of appointment dated 11.05.2016 from National Hajj Commission of Nigeria … Unfortunately however on 15-june-2016 we received a letter from the National Hajj Commission of Nigeria conveying the decision of Saudi Arabia General Authority of Civil Aviation (GACA) to exclude Azman … from participating in 2016 Hajj airlift of Pilgrims from Nigeria to Saudi Arabia on the flimsy excuse of non designation and economic and security requirement. Attached herewith is a copy [of] the said letter … In view of the foregoing therefore, we regret to inform you that we will not be able to participate in the airlift of Pilgrims for 2016 Hajj operations. However since Hajj operations is an annual events [sic] we are hopeful to participate next year and subsequent years …"

The SPVs then sought to enforce the terms of the contract by directing Azman Air to take delivery of the B777s as prescribed. When the airline did not comply, Triple Seven MSN 27251 Limited and Triple Seven (CIS) Limited filed cases against it in the Business and Property Courts of England and Wales. On June 5, 2018, the court subsequently ruled in favour of the applicants awarding them approximately USD22 million for breach of contract and loss of earnings. The sum excludes interest.

According to ThisDay newspaper, Azman Air has appealed the ruling and has also sought government protection in the event the two SPVs move to seize any of its aircraft. According to the ch-aviation fleets module, Azman Air operates two B737-300s (of which one is owned and one leased from GECAS) and two B737-500s (of which one is leased from GECAS).

Veling has since commented to ch-aviation that it is determined to enforce its rights despite the prospect of government involvement.

“It’s disappointing that Azman has reportedly asked the Government of Nigeria to protect it against enforcement of this judgement," Andy Stevenson, partner of Elborne Mitchell LLP – Veling’s solicitors – said in an emailed statement. "The idea that the Nigerian government – which is signatory to the Cape Town Convention amongst other things – would get involved in a private commercial dispute would be unprecedented and of grave consequences to future aircraft leasing and other international businesses in Nigeria. We hope that Azman will do the honorable thing and pay what they owe.”