Nigerian High Court Authorizes Foreign Firm To Repossess And Export Arik Air Aircraft
In a groundbreaking decision, the Federal High Court of Nigeria has granted Export Development Canada (EDC) the right to repossess and export a CRJ1000 aircraft previously operated by Arik Air. The ruling, delivered on November 27, 2024, by Justice Alexander Oluseyi Owoeye, marks the first application of the Cape Town Convention since Nigeria ratified it.
The court ruled in favor of EDC, which had been exercising its contractual rights as a creditor through JEM Leasing Limited, the aircraft’s former owner. The aircraft, registered as 5N-JEE, had been deregistered in 2022 due to Arik Air’s default on its lease obligations. Despite opposition from the Economic and Financial Crimes Commission (EFCC), Justice Owoeye upheld the legality of the sale of the aircraft to Alberta Aviation Capital Corporation in 2022.
EDC welcomed the ruling as a significant step toward recovering the aircraft. “EDC has been exercising its contractual rights as a creditor and views the court ruling as a positive step,” an EDC spokesperson stated.
The EFCC had previously blocked an attempt to repossess the aircraft in June 2023, arguing that the sale was invalid. However, the court found the EFCC’s actions to violate Article 14 of the Cape Town Convention, which Nigeria recently adopted to standardize aircraft financing and leasing laws.
Justice Owoeye’s judgment also addressed allegations of harassment by EFCC officials against the repossession agents, Captain Samuel Caulcrick and Captain Isiaka Oyeshina Akinfenwa, the CEO of Merchant Express Cargo. The court ordered EFCC officials to cease any interference with the repossession process, allowing EDC to proceed with the teardown and export of the aircraft, which remains stored at Lagos Airport.
The CRJ1000, built in 2013, was leased to Arik Air in 2014. After Arik ceased operating the aircraft in 2019, JEM Leasing initiated repossession proceedings in 2022. Arik Air, now under receivership and controlled by Nigeria’s Asset Management Corporation of Nigeria (AMCON), has faced financial struggles since 2017.
The ruling underscores Nigeria’s commitment to adhering to international aviation leasing norms. Aviation Minister Festus Keyamo recently acknowledged the country’s historical challenges with compliance, attributing them to legal obstacles in the judicial process.
This decision represents a pivotal moment for Nigeria’s aviation sector as it seeks to align with global standards under the Cape Town Convention.
