Article Summary
- Aviation Services International Ltd (AHS) has lost a two-year legal battle against its Nigerian partner, Precision Aviation Handling Company Ltd (PAHCOL).
- The Federal High Court in Abuja terminated the agreement between the two companies and awarded damages of N2 million to the plaintiff, Precision Support Services Ltd.
- The court ruled that AHS contravened Nigerian laws and abandoned its contract with PAHCOL, leading to the declaration of the MoU signed in 2016 as null and void.
British ground-handling company, Aviation Services International Ltd (AHS), has lost a two years legal battle against its Nigerian partner, Precision Aviation Handling Company Ltd (PAHCOL), formerly known as AHS Aviation Handling Services Nigeria Ltd.
In its May 3rd 2023 ruling, the Federal High Court sitting in Abuja terminated the agreement between the two companies and awarded damages of N2 million to the plaintiff Precision Support Services Ltd.
More details
In his ruling, Justice Obiora Atuegwu Egwuatu said the defendant contravened the laws of the Federal Republic of Nigeria and the Civil Aviation Act 2006, particularly Section 72 of the ground handling license.
The 49 pages judgment, seen by Nairametrics, therefore declared that the MoU signed on June 22, 2016, between the 3rd plaintiff and the 1st defendant, was in gross violation of the 1999 Constitution and the Civil Act 2006, and therefore was null and void.
The court also ruled that the MoU signed in respect of aviation ground handling services in Nigeria had expired by effluxion of time on June 30 June 2017.
The court also stated that since the plaintiffs and defendant did not sign the Joint Venture Agreement (JVA) as contemplated, the proposed agreement was, therefore, inchoate and liable to be terminated. The judge added:
- “A declaration is made that the proposed Joint Venture between the claimants and the 1st defendant on aviation ground handling services in Nigeria and other subsequent agreements particularly the share acquisition agreement and shareholders agreement both dated 16th August 2016 are ex facie illegal for being in contravention of the constitution of the Federal Republic of Nigeria, 1999, the Aviation Act 2006 and the Foreign Exchange Act and therefore unenforceable.
- “A declaration is made that the non-signing of a management agreement as contemplated by the parties to the joint venture is injurious to the operations and progress of the 3rd plaintiff in Nigeria.
- “A declaration is made that the reasonable and inferable conclusion arising from the abandonment by the 1st defendant of its daily management role and funding of the 3rd claimant in accordance with the laws of the Federal Republic of Nigeria since 2018 is that they have abandoned and have totally lost interest in the proposed joint venture in aviation ground handling services in Nigeria.”
The backstory
The legal case was initiated by Precision Support Services Ltd, Merit Oil Ltd and Precision Aviation Handling Company Ltd as plaintiffs, while the defendants are Aviation Handling Services International Ltd, BVI and Menzies Aviation (Africa) Ltd.
The British company was accused by its Nigerian partner of abandonment of contract and failure to adhere to the agreements reached with the company on July 22, 2016, when both parties signed a Memorandum of Understanding (MoU) on investment.
Note that the MoU between the two parties was supposed to be for the initial six months period and later to be expanded into JVA.
Under the JVA, AHS was to invest in equipment acquisition to beef up its operations and that of its Nigerian partner in the country.
But, the court ruled that AHS did not show any commitment to the MoU and rather than abide by the agreement, it abandoned the contract since it was signed on June 22, 2016.
