Court Orders AHS to Pay N2m Damages, Nullifies MoU

The Federal High Court sitting in Abuja has nullified the Memorandum of Understanding (MoU) between Aviation Services International Limited (AHS) and its Nigerian partner; Precision Aviation Handling Company Limited (PAHCOL), in a ruling, where it said the defendants contradicted the laws of the Federal Republic of Nigeria and the Civil Aviation Act 2006, particularly the Section 72 of the ground handling licence.

Th Court therefore ordered AHS to pay the sum of N2 million to PAHCOL as damages.

According to the judgment, the MoU signed on June 22, 2016 between the 3rd plaintiff and 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 49 paged ruling on suit number: FHC/ABJ/CS/566/2021 over abandonment of contract was delivered on May 3, 2023 in Abuja by Justice Obiora Atuegwu Egwuatu

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 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 expiration 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 insipient 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.”