Court Stops Sale Of Nigeria Air To Ethiopian Airlines

The Federal High Court in Lagos has nullified the sale of Nigerian Air Ltd to Ethiopian Airlines. Justice Ambrose Lewis-Allagoa ruled that the Federal Government’s plan to establish a national carrier, Nigeria Air, should not proceed.

The judgment was in favor of the plaintiffs, the Registered Trustees of the Airline Operators of Nigeria, and five other entities in the aviation sector. Justice Lewis-Allagoa granted all the plaintiffs’ reliefs except for the request for N2bn in damages for the plaintiffs’ wrongful exclusion and the flawed bidding process.

The plaintiffs included the Registered Trustees of the Airline Operators, Azman Air Services Limited, Air Peace Limited, Max Air Limited, United Nigeria Airlines Company Limited, and Topbrass Aviation Limited. They filed the suit against Nigeria Air Limited, Ethiopian Airlines, former Minister of Aviation Hadi Sirika, and the Attorney-General of the Federation.

The plaintiffs sought to void the entire bidding and selection process for Nigeria Air, alleging that it was rigged to favor Ethiopian Airlines, a foreign entity owned by the Ethiopian Government. They argued that the Federal Ministry of Transportation officials who controlled Nigeria Air did not adhere to the proposal guidelines, excluding local airlines.

The plaintiffs accused government officials of bias, granting Ethiopian Airlines excessive privileges, including a 15-year tax moratorium and exclusive terminal rights in Lagos and Abuja, which would harm local airlines and the Nigerian economy.

The plaintiffs also contended that the transaction advisor lacked the necessary qualifications and experience, further questioning the process’s legitimacy. They claimed the process was influenced by political and personal interests, detrimental to Nigerian airlines and public interest.

Justice Lewis-Allagoa dismissed Ethiopian Airlines’ sole defense and granted all the plaintiffs’ reliefs, except for the request for damages.

The reliefs include:

A DECLARATION that the action, conduct, and or decisions in the sale of the shares and operations of the 1st Defendant is in violation of the Companies and Allied Matters Act (CAMA) 2020, SEC Nigeria Consolidated Rules & Regulations 2013 (as amended in 2022), Nigerian Investment Promotion Commission (NIPC) Act, International Civil Aviation Organization (ICAO) Convention, Civil Aviation Act, Public Procurement Act, Concession Regulatory Commission (Est.) Act, 2005, Federal  Competition and Consumer Protection Act, Procurement Processes for Public Private Partnership in the Federal Government under the National Policy on Public Private Partnership (N4P) and Nigeria Civil Aviation Regulations, 2015, and other regulatory statutes on aviation, companies, and investment laws in Nigeria.

ii. A DECLARATION that the entire administrative actions and decisions of the 3rd and 4th Defendants in the sale of the shares of the 1st Defendant to the 2nd Defendant and its consortium is invalid, void, and of no effect.

iii. A DECLARATION that the 2nd Defendant was incompetent to bid for shares in the 1st Defendant and commence business accordingly.

iv. AN ORDER setting aside the entire bidding/selection process(es) for the “Nigeria Air” project as well as the approval, grant, or selection of the 2nd defendant by the 1st, 3rd, and 4th Defendants in the process.

v. AN ORDER directing the immediate, fresh, and transparent bidding process(es) involving the Plaintiffs being the Indigenous Airline Operators in Nigeria rightly entitled to participate in the process.

vi. AN ORDER directing the immediate revocation and cancellation of the Air Transport License (ATL) issued by the Nigerian Civil Aviation Authority (NCAA) to the 1st Defendant.

Relief eight which failed was for “AN ORDER OF N2,000,000,000.00 (Two Billion Naira, only) as damages for the injury suffered by the Plaintiffs and still suffering as a result of the wrongful exclusion of the Plaintiffs, wrongful action; unlawful bidding and selection processes and their wrongful projection of the Plaintiffs as not having properly, rightly and timely bid for the Nigeria Air project”.