Court stops planes auction over debt of Sh77 million

The High Court has stopped the planned auction of two aircraft belonging to a Canadian plane leasing firm over an alleged debt of Sh77 million.

Avmax Aircraft Leasing Inc obtained the order blocking the sale of 5Y-BXC bombardier CRJ-100 and 5Y-RJS DHC-8-300, over an alleged debt sought to be recovered in a dispute between Five Forty Aviation (Fly540) and a fuel supplier.

The firm through its local agent, Mr David Kuria, moved to court last year stating that it was apprehensive that the attached aircraft would be sold if the court did not intervene.

“That unless the warrants of attachment herein are stayed, the application will be rendered nugatory,” Mr Kuria said.

Read: Aircraft leasing firm fights to save two of its planes from auction

Mr John Kimani, a director of Finejet Limited, a supplier of fuel, opposed the application arguing that it is an attempt to appeal against two rulings issued by the High Court last year, allowing the attachment and sale of the aircraft.

“The applicants herein (Avmax) have no interest in the decree herein and must not interfere with a lawful process of execution which has been expressly mandated by this honourable court,” Mr Kimani said.

The court, however, ruled that Avmax had proved a case and blocked the intended sale.

Fly540 is embroiled in a dispute with Finejet over a debt arising from the supply of jet fuel.

After failing to settle the debt, Finejet engaged the services of Nairobi Connection Services Auctioneers, who identified the two aircraft for sale to recover the debt.

Avmax Aircraft Leasing said in the application that it specialises in timely and cost-effective aircraft sales and leasing solutions.

“As the world’s largest lessor of Bombardier Dash-8/Q Series and CRJ Series aircraft, it (the firm), has an extensive fleet that includes CRJ SE (VIP Conversions), CRJ Corporate Shuttle, and CRJ Package Freight options,” Mr Kuria said in an affidavit filed in court.

Lawyer Ham Lagat informed the court that the two aircraft identified for sale cannot be attached because they do not belong to Five Forty Aviation.

Mr Lagat added that four other planes identified by the auctioneer –5Y-CGL (MSN 426), 5Y- BXC (CRJ), 5Y-BUZ (MSN 253) and 5Y-RJS serial number 250– also belong to Avmax Aircraft Leasing.

The lawyer stated that in a ruling on September 4, Finejet obtained warrants in respect of the two aircraft after the court dismissed an objection filed by East Africa Safaris Air Ltd, which stated that the aircraft was leased from Avmax and Five Forty was not the registered owner.

He said the information was not disclosed to Avmax, a move that would have enabled the firm to file objection proceedings seeking to lift the warrants.

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