• Wednesday, February 21, 2024
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Abandoned contract: Court terminates MoU between Aviation Services International, partner

Supreme Court gives FG control of Nigeria’s inland waterways

The Federal High Court sitting in Abuja has put a stop to the Memorandum of Understanding (MoU) between Aviation Services International Ltd (AHS) and its Nigerian partner; Precision Aviation Handling Company of Nigeria (PAHCOL) over abandonment of contract.

The court also ruled that the defendants contravened the laws of the Federal Republic of Nigeria and the Civil Aviation Act 2006, particularly the Section 72 of the ground handling license.

The plaintiffs in the case are the Precision Support Services Ltd, Merit Oil Ltd and Precision Aviation Handling Company Ltd while the defendants are Aviation Handling Services International Ltd, BVI and Menzies Aviation (Africa) Ltd.

The 49 pages judgment delivered on May 3, 2023 in Abuja by Justice Obiora Atuegwu Egwuatu with the suit number: FHC/ABJ/CS/566/2021, and obtained by our correspondent, declared that the MoU signed on June 22, 2016 between the 3rd plaintiff ad the 1st defendant, which was the preliminary understanding of the parties to a proposed joint venture was in gross violation of the Federal Republic of Nigeria 1999 and the Civil Act 2006.

The court declared that the contravention of the Nigerian laws and the Civil Aviation Act, made the contract unenforceable and should be disregarded.

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.

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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.”

It was gathered that the MoU entered into by both parties was supposed to be for initial six months and later metamorphosed into JVA.

Under the JVA, the parties were to invest in equipment acquisition to beef up their operations in Nigeria.

But, the court ruled that AHS did not show commitment to the MoU and rather than abide by the agreement, it abandoned it since it was signed on June 22, 2016.

AHS was also ordered to pay the sum of N2million to PAHCOL as damages.