Debtor’s aircraft seized and sold in auction. Proceeds used to satisfy client’s claim. Happy ending for bnt and its client
Frank Heemann and Andrius Juskys, bnt attorneys in CEE’s dispute resolution lawyers successfully represented this German client, a leading independent service provider in the aircraft industry for the maintenance, repair, and overhaul (MRO) of aircraft engines. The client is part of the largest European airline group of companies, based in Germany.
Work included legal and tactical advice as well as the client’s representation before Lithuanian courts of all instance, and representation before the Court of Justice of the European Union (CJEU).
What, in the beginning, appeared to be a rather straightforward enforcement in Lithuania of a German court decision turned into a complex four-year legal battle between the client and the debtor, a Nigerian airline.
The dispute resolution lawyers of bnt attorneys in CEE succeeded early in 2020 in having the debtor’s Boeing 737-800 aircraft seized in Kaunas, Lithuania, where the aircraft was being overhauled at that time.
Following several appeals by the debtor, the following four years witnessed over twenty court proceedings in Lithuanian courts of first instance, plus appeal instance, as well as three cases before the Lithuanian Supreme Court. In these proceedings the debtor was supported by another Nigerian entity which alleged that it was the holder of a Nigerian pledge right which was internationally protected under the Cape Town Convention.
In one strand of litigation the Lithuanian Supreme Court submitted a request for a preliminary ruling to the CJEU, where Andrius Juskys and Frank Heemann, bnt’s dispute resolution lawyers, represented the client’s interests and thereby helped to clarify complex legal questions which were related to the application of civil enforcement proceedings where these had been laid down in the Lithuanian Civil Procedural Code and Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004. These created a European Enforcement Order for uncontested claims. The CJEU’s judgment of 16 February 2023 is available here.
The debtor and its supporting entity undertook considerable efforts to prevent the client from exercising its rights and enforcing its claim, efforts which at least partially may be seen as a misuse of procedural rights. In the end, however, the Lithuanian legal system proved to be resilient, dismissing all legal objections and appeals which had been raised by the debtor and the alleged pledge holder. With the help of Frank Heemann and Andrius Juskys, bnt’s dispute resolution lawyers , along with the enforcing bailiff , the seized Boeing 737-800 aircraft could be sold at auction. The proceeds were distributed to the value of several million euros to the client, covering a large part of its open debt.
Lessons learned:
- The Lithuanian civil court system ultimately proved to be resilient and effective against a considerable number of attempts to prevent the rightful enforcement of a German title under the applicable European Regulation and Lithuanian procedural law.
- Lithuanian courts managed to handle a large number (20+) of litigation proceedings through three instances (along with the involvement of the CJEU) in a comparably short period of time, including during 2020 and 2021 when many other states’ civil procedural systems were paralysed by Covid restrictions
- Persistence pays off: sometimes you have to go the whole way up to the supreme court to win the case
- A holistic approach is required which entails not only normal legal representation in court and related document drafting. There must be a litigation strategy in place which has been agreed with a client who also needs ample tactical and pragmatic advice. In this case this included the monitoring of and reaction to certain legislative measures which were aimed at the ratification by the Republic Lithuania of the Cape Town Convention.
The Lithuanian dispute resolution lawyers of bnt aottorneys in CEE have over twenty years of experience in dispute resolution matters, including litigation before civil courts of first instance, the Lithuanian Court of Appeal, the Lithuanian Supreme Court, and the Court of Justice of the European Union.
The Lithuanian dispute resolution team is led by partner and lawyer, Frank Heemann, and the lawyer Andrius Juskys. A particular expertise and specialisation for this team lies in complex cross-border disputes which involve parties from Lithuania and also German-speaking countries (Germany, Austria, or Switzerland).
The litigation which has been described above has received ample media coverage. Here, for instance:
Arik Air plane arrested in Kaunas will not be returned to Nigeria – Verslo žinios (vz.lt)
Nigerian Arik Air plane arrested in Lithuania sold for EUR 4.8 million – Verslo žinios (vz.lt)
Arrested Nigerian Arik Air plane for sale in Lithuania for EUR 4.8 million | tv3.lt
Source:
16 February 2023: Judgment by the European Court of Justice in case C-393/21
Judgment by the Supreme Court of Lithuania of 27 April 2023 in civil case No 3K-3-194-701/2023
Judgment by the Supreme Court of Lithuania of 7 November 2022 in civil case No e3K-3-209-943/2022
Judgment by the Supreme Court of Lithuania of 2 September 2021 in civil case No e3K-3-334-469/2021