January 03, (THEWILL) – Nigeria has recorded a landmark judgement after the signing of the Capetown Convention (CTC) Leasing Practice Direction, with the Federal High Court allowing Export Development Canada to repossess and tear down CRJ1000 5N-JEE from Arik Air.
Nigeria only signed the CTC Leasing Practice Direction a few months ago and until now, has had a relatively poor record of complying with leasing norms concerning the return of aircraft in disputes.
Worried about the low compliance with aircraft leasing, aviation Minister, Festus Keyamo, who blamed the non-compliance record on legal impediments in Nigeria’s judicial process, sought a better legal framework in addressing such disputes, hence the signing of the CTC Practice Direction.
The November 27, 2024, judgement by Justice Alexander Oluseyi Owoeye is the first of its kind after Nigeria signed the Cape Town Convention.
EDC spokesperson was quoted as saying “EDC has been exercising its contractual rights as a creditor through the sale of the aircraft by (former owner of the Aircraft) JEM Leasing Limited and views the court ruling as a positive step,”
Nigeria’s Economic and Financial Crimes Commission (EFCC), whom some Arik shareholders enlisted to help prevent the repossession and export of the aircraft, opposed the EDC. It argued that JEM Leasing’s sale of the aircraft to Alberta Aviation Capital in late 2022 was invalid. However, Justice Owoeye found the transaction was legal, and there were no grounds for preventing the jet’s export.
The aircraft was removed from the Nigerian register in 2022, but the EFCC allegedly blocked an attempt to repossess it in June 2023. The court heard this was a violation of Cape Town Convention Article 14.
The applicants in the matter were Captain Samuel Caulcrick and Captain Isiaka Oyeshina Akinfenwa. Caulcrick was the local repossession agent appointed by part-out firm Merchant Express Cargo, who had the CRJ teardown contract. Akinfenwa is the CEO of Merchant Express Cargo. In previous court hearings, both men had criticised the tactics of the EFCC and Arik shareholder and founder Johnson Arumemi-Ikhide.
Among other things, Owoeye’s ruling found that EFCC officials had harassed, threatened, questioned, intimidated, detained, and threatened to detain the applicants who were attempting to repossess the aircraft.
In addition to granting the EDC the right to repossess and teardown the aircraft, Owoeye also issued an order preventing EFCC officials from interfering with this process. The CRJ remains in storage at Lagos airport.
The 2013-built regional jet was leased to Arik Air in 2014 by JEM Leasing Limited. The EDC helped finance the aircraft’s acquisition and, consequently, held a mortgage over it.
Arik remains in receivership and under the control of Nigeria’s state-owned Asset Management Corporation of Nigeria (AMCON), which, as the airline’s largest creditor, took control of the ailing carrier in 2017.
When THEWILL contacted the PR & Communications Manager of Arik Air, Adebanji Ola, the manager could not immediately comment on the development.
Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.
