Flying success for 7KBW team in Aircraft Purchase Fleet Limited v Compagnia Aerea Italiana SPA [2018] EWHC 3315 (Comm)

Gavin Kealey QC
Andrew Wales QC
Anna Gotts
Harry Wright

Aircraft Purchase Fleet Limited v Compagnia Aerea Italiana SPA [2018] EWHC 3315 (Comm)

Gavin Kealey QC, Andrew Wales QC, Anna Gotts and Harry Wright have successfully defended a $260m claim for damages by Aircraft Purchase Fleet Limited (“APFL”) on behalf of Compagnia Aerea Italiana SPA (“CAI”), the former operator of the Alitalia airline.

APFL claimed damages for alleged renunciation by CAI of a Framework Agreement, under which CAI had to lease 13 Airbus A320 aircraft from APFL. APFL was to buy those aircraft from Airbus under a Purchase Agreement, then lease them to CAI.

Stephen Phillips J held that even if CAI had renounced the Framework Agreement, APFL had rendered itself incapable of performing its obligations under that contract, which provided CAI with a complete defence to the claim for damages (applying Acre 1127 Ltd (in liquidation) v De Montfort Fine Art Ltd [2011] EWCA Civ 87, per Tomlinson LJ at [51]).

The Judge held that APFL had rendered itself incapable of performing the Framework Agreement. As a result of APFL’s failure properly to perform the Purchase Agreement, Airbus had terminated that contract with APFL, and then refused to reinstate it. APFL was therefore incapable of performing the Framework Agreement – because it could not obtain the aircraft from Airbus. On the evidence, the Judge rejected APFL’s case that its inability to perform the Framework Agreement was itself a result of CAI’s alleged renunciation, holding that there was “no possible basis for such a finding”.

Accordingly, APFL’s claim failed on the facts, meaning the Judge did not need to decide the many other issues that arose, including the complex issue of quantum. CAI also made a recovery against APFL under its Counterclaim.

Instructing solicitors were Robert Lawson QC and Patrick Slomski of Clyde & Co.

Please view the judgment here.

Date added: December 4th, 2018


Area of Expertise

Aviation
Commercial Litigation