Court rejects AHS Ltd appeal against PAHCOL aviation dispute

The Court of Appeal has dismissed an appeal filed by British aviation company, Aviation Services International Ltd (AHS), against Precision Aviation Handling Company Ltd (PAHCOL), now AHS Aviation Handling Services Nig. Ltd, and others over a Joint Venture Agreement.

In a leading judgment delivered by Justice Abang on Monday, the Court reaffirmed the primacy of Nigerian law in transactions substantially connected with Nigeria while faulting AHS for defaulting on the JVA between the parties.

Precision Support Services Ltd, Merit Oil Ltd and PAHCOL were the respondents in the appeal, with Chioma Linda Ekene-Okwunma, Esq., as their counsel, according to court documents seen by Nairametrics.

The AHS appeal arose from a 2016 Memorandum of Understanding (MoU) between AHS and PAHCOL concerning the proposed development of aviation ground-handling services.

What the Appeal Court said

In a unanimous judgment delivered by a three-member panel, the Court considered whether the trial court was right to hold that the failure to execute the contemplated Joint Venture Agreement rendered the transaction inchoate.

• Justice Abang answered the issue in the affirmative, holding that the trial court had made findings of fact on the issues properly joined by the parties and that those findings were supported by the evidence.
• The Court also upheld the trial court’s treatment of the contractual clause purporting to confer exclusive jurisdiction on English courts.
• The Court agreed that, in the circumstances, the foreign jurisdiction clause could not make the associated contractual instruments enforceable where the proposed joint venture involved a Nigerian company and a business to be carried out in Nigeria pursuant to Nigerian law.
• The judge reaffirmed that a contractual choice of foreign jurisdiction does not, by itself, displace mandatory Nigerian laws regulating activities undertaken within Nigeria.
• The Court further agreed with the finding that, at the time the suit was instituted, AHS was in contravention of Section 33(1)(a) of the Civil Aviation Act 2006, which prescribes eligibility requirements for licences, permits, certificates and authorisations issued by the Nigerian Civil Aviation Authority.
• On the foreign currency issue, Justice Abang accepted the respondents’ position, advanced by their counsel, Chioma Linda Ekene-Okwunma, Esq., that the evidence before the trial court supported its conclusion that the purported importation of funds into Nigeria by AHS at the time was in breach of the applicable Nigerian legal framework governing the importation of foreign currencies.
• Justice Abang also upheld the finding that AHS had abandoned the preliminary roles contemplated by the parties.

The appeal was consequently dismissed for want of merit. The judgment of the Federal High Court was affirmed, with costs of N1 million awarded in favour of the respondents.

Backstory

Nairametrics, citing court verdicts, previously reported that the arrangement between AHS, PAHCOL and others contemplated the subsequent execution of a Joint Venture Agreement (JVA).

That agreement, however, was not executed to the latter, according to the court’s findings.

In 2023, the Federal High Court in Abuja, presided over by Justice Obiora Egwuatu, terminated the parties’ arrangement and awarded N2 million in damages to Precision Support Services Ltd.

The trial court held, among other things, that the MoU had expired by effluxion of time on June 30, 2017, while the contemplated JVA remained inchoate because the parties never executed it.

It also found that AHS had abandoned the preliminary obligations contemplated by the parties and had acted contrary to applicable Nigerian law, including the statutory framework governing the importation of foreign currency into Nigeria.

What you should know

The development adds to the list of court interventions in aviation-related disputes.

In 2026, the Federal High Court sitting in Lagos awarded N5.5 million in damages and legal costs against Dana Airline Limited in favour of Babajide Idowu, Esq., over the delay of his flight in 2018.