Leasing firm begins action over aircraft purchase agreement

AN IRISH aircraft leasing company has brought a legal action against Air Italy over its alleged failure to honour an agreement to buy a Boeing 737-300 for $9 million (€7m).

The Italian company claimed it was entitled to repudiate the contract after flight tests disclosed problems with the aircraft while Aergo Leasing contends it is normal for flight tests to disclose problems and that all those matters were satisfactorily addressed.

The proceedings by Aergo Leasing 110 Ltd, of Clanwilliam Terrace, Grand Canal Quay, Dublin, against Aer Italy SPA were admitted to the Commercial Court list yesterday by Mr Justice Peter Kelly.

The judge directed that amotion by the Italian company to the effect that the Irish courts have no jurisdiction to hear the dispute will be addressed later.

Aergo claims it reached an agreement with Air Italy on July 28 last for the purchase of the aircraft but the defendant failed to honour the agreement.

Aer Italy cited a number of “technical complaints” about the aircraft which, it alleged, had emerged during tests of the aircraft in Kuala Lumpur, Malaysia.

Aergo said there is “no merit” in those complaints. It said Aer Italy claims the aircraft was not in a suitable condition to meet the conditions of the agreement.

Aergo said that, after the final flight test, the defendants withdrew its staff from the test location prior to any of the highlighted matters being addressed and had refused to proceed with the sale.

Aergo said it is normal for thorough technical tests, such as those carried out on the aircraft, to disclose matters to be addressed.

It claims those issues were satisfactorily addressed after the final test and the aircraft had properly passed those tests.

It also claims the sides had chosen Irish law to govern the respective rights and obligations of the sides concerning the contract but that the Italian company had instituted proceedings in Italy seeking refund of the deposit paid by it for the aircraft.