Friday, October 26, 2018

Air Namibia To Pay N$422 Million To Belgian Carrier In Lawsuit

Air Namibia has spent over N$60 million fights off a court challenge from a Belgian aviation
Air Namibia faces the threat of yet more asset seizures if it does not settle USD29 million 
(N$422 Million) lawsuit with defunct Belgian carrier Challengair by the end of this month. The legal suit dates back from March 1998 when the state-owned Namibian carrier agreed to lease a B767-300(ER) from Challengair. However, in July of that year, Air Namibia terminated the agreement after discovering the aircraft to be materially defective.

 A day after the termination, Challengair was placed into liquidation. Eventually, in 2006, the two parties Namibian and includes TransNamib agreed to binding arbitration with the hearing which was later postponed that year in London. In August of 2008, the arbiter ruled against Air Namibia and TransNamib. In 2011, a French arbitration court ruled again that Air Namibia must pay Challengair for services rendered as well as its legal costs. In January 2015, a Munich Regional Appeal Court also issued a ruling against the Namibians who then sought to have the Lawsuit overturned on the grounds that the German court did not have jurisdiction for the declaration of enforceability of the arbitration award because the airline owned no assets in Germany.

According to court documents, Challengair sought the assistance of the German courts because Air Namibia has a presence in the country via its GSA there, Aviareps, and therefore has a bank account which can be attached. Although Air Namibia serves Frankfurt International Airport with its A330-200s, the aircraft are immune to the ruling as they are not owned by the airline but are leased from Voyager Aviation (formerly Intrepid Aviation). "The fear in this respect relates to the fuel contained in the Aircraft. The legal opinion provided in this regards indicates that, though Air Namibia aircraft cannot be attached by Challenge Air, it is indeed possible to attach its Kerosene (fuel) contained in the aircraft. 
Inside the Air Namibia Airbus 330-200 carrier with cabin crews and passers onboard.
The option to attach fuel is due to the fact that, under German law, kerosene is a movable physical object. The attachment of a movable physical object in the custody and control of the debtor is affected by the court’s appointed enforcement officer taking possession of it.  Air Namibia has a Ticket Sales Agent (Aviareps) as well as a bank account in respect of which an attachment may be affected, Challenge Air said, adding that the airline further operates its aircraft to Frankfurt. “These actions are aimed at recovering the legal costs to which Challengair is entitled by virtue of the proceedings which took place in Germany. 

Through these actions it has become evident that the matter has now reached a crucial stage, making action on the part of both Air Namibia and its shareholder urgent. It is clear that the executive seizure at Aviareps is aimed at all the assets belonging to Air Namibia and Transnamib actually held by Aviareps,” the document indicated. The Belgians have been unable to pursue their claims in Namibia itself after Air Namibia previously applied for legal restriction and was granted, as an order in the High Court of Namibia declaring the arbitration agreement, and subsequent proceedings, null and void and unenforceable.

 As such, last week, Challenger's Namibian representatives, Wilhelm Shali and Anicet Baum, sent a letter of demand to Air Namibia through a local law firm informing the airline of the impending attachment of their funds in Germany if the matter is not settled within 10 days. Air Namibia spokesman Paul Nakawa has acknowledged Challengair's renewed claims but has declined to comment on the matter pending a court hearing in Windhoek on 03 December 2018.  Air Namibia has spent more than N$60 million to fight off a court challenge from a Belgian aviation firm that was liquidated 20 years ago.  Air Namibia incurred a legal bill of N$62 million (3,734,969 Euros) compared to the N$31 million (1.906,653 Euros) legal bill racked up by the applicants. The airline was represented by Shikongo Law Chambers, who subsequently instructed a host of European and South African based lawyers to battle the case from that side.

Yesterday on the 25th October, that agreement has lapsed and this means that Air Namibia Aircraft may be attached in settlement of this bill. All legal fees have been paid after ticket sales in Germany were attached in settlement of the fees. Local business mogul Wilhelm Shali and Anicet Baum who are Challenge Air’s representatives are represented by prominent local lawyer Sisa Namandje.

 In a separate case, the Zimbabwean court ordered Air Namibia to pay a Zimbabwean family USD1 million in compensation for trauma suffered as a result of their being denied boarding for a Frankfurt-bound flight by German immigration officials. A wet-leased E145 operated for Air Namibia was briefly seized at Harare Int'l as the claimants sought to execute the court order. The case is also under review with the Zimbabwean Supreme Court.  Through the mutual of understanding Air Namibian granted to resume its flight to Harare and Victoria Falls this coming Sunday. 

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