MAE Aircraft Management WLL (MENA) has disputed the airworthiness of a Boeing 737-300PCF aircraft leased from Rostrum Leasing 1 DAC, despite a judgment last month that ruled in the lessor’s favour. The aircraft was operated under the MENA Cargo Airlines brand.
The Bahrain-based cargo carrier was reported last week to have filed a $16.9m counterclaim following a ruling by the London Circuit Commercial Court granting Rostrum several millions of dollars in outstanding rent, along with indemnity costs.
However, court records show no counterclaim for $16.9 million. The counterclaim is for damages “to be assessed by reference to evidence”, with various estimated amounts totalling $16.09 million – not $16.9 million.
Furthermore, while MENA filed a counterclaim as far back as April last year, most of it was struck out by the court on the basis that it had no real prospects of success.
“The latest iteration of MENA’s counterclaim includes allegations about the Aircraft not being airworthy when delivered,” said Rostrum in a statement.
However, the judgment handed down last month in Rostrum’s favour showed that the court had considered the issue and decided that the Aircraft was airworthy.
“MENA inspected the Aircraft before delivery and signed an Acceptance Certificate,” Rostrum said.
MAE Aircraft Management had arranged for its agent AEC to perform a technical inspection on April 23, 2021, prior to signing the acceptance certificate and entering into the final lease agreement.
In its judgment, the court found that “[on] MAE’s own evidence (contained in the exhibits to Mr Shuwaiter’s third witness statement) there was an FAA 8130-3 certificate that was reviewed by the Bahraini Civil Aviation Authority with the only query on the document arising from American dating having been adopted. The same certificate was noted in the TAC. Applying the express provisions of the Lease the Aircraft was therefore airworthy.”
However, MAE claimed the acceptance certificate did not waive any defects because it was executed before the lease was finalised and was subject to conditions, including an engine oil leak, outstanding maintenance requirements, and incomplete airworthiness directives. The company claimed these issues were never rectified.
The court rejected most of this defence. It found that even if the defects were considered “sufficiently serious”, this would not have impacted its requirement to accept delivery and pay rent.
“It would simply have meant that the aircraft only had to be returned with the same defects at the end of the term unless they affected airworthiness,” the judgment said.
“The Judge who heard Rostrum’s successful summary judgement application late last year made findings the aircraft was airworthy and had FAA-issued Certificates of Airworthiness at the time of delivery,” said Rostrum.
MENA has yet to comply with the court order to pay Rostrum its due rent.
“MENA has not complied with the order the Judge made when he found in favour of Rostrum on its claim for unpaid rent,” said Rostrum. “MENA is in breach of the order to pay sums in excess of $5 million.”
Furthermore, the court found that MENA did not have any air operator’s certificate (AOC) until late September 2021 – months after delivery of the aircraft. As a result, Rostrum could not deregister the aircraft and conduct transfer of title to MAE until then. The aircraft was eventually registered in Bahrain in early October 2021 once MAE had paid overdue rent.
The case remains ongoing, but the issue of airworthiness has largely been determined by the court.
MAE Aircraft Management has been contacted for comment.
Thomas Munby KC and James Kane, instructed by Alius Law, acted for the lessor. Luke Wygas, instructed by Gateley, acted for the defendant.