Court Grants Export Development Canada Right to Repossess Arik Air’s Aircraft, Marks Historic Cape Town Convention Ruling

In a landmark ruling on November 27, 2024, the Federal High Court in Lagos granted Export Development Canada (EDC) the right to repossess a Bombardier CRJ1000 aircraft leased to Arik Air. The judgment, delivered by Justice Alexander Oluseyi Owoeye, marks the first legal application of the Cape Town Convention in Nigeria, solidifying the country’s commitment to international aviation standards.

The case stems from a 2014 lease agreement between JEM Leasing Limited, which owns the aircraft, and Arik Air. The Canadian financing institution, EDC, provided funding for the purchase and held a mortgage over the aircraft. However, due to Arik Air’s financial troubles, the airline ceased operating the plane in 2019 and entered receivership under Nigeria’s Asset Management Corporation (AMCON) in 2017. Arik Air defaulted on the lease in 2022, prompting JEM Leasing to seek the aircraft’s repossession.

Despite attempts by JEM Leasing to reclaim the aircraft, the process faced significant hurdles. The Economic and Financial Crimes Commission (EFCC) intervened, halting the repossession by questioning the legality of the sale. The applicants, Captain Samuel Caulcrick, a local repossession agent, and Captain Isiaka Oyeshina Akinfenwa, CEO of Merchant Express Cargo, highlighted the harassment and intimidation they faced from EFCC agents and Arik’s founder, Johnson Arumemi-Ikhide.

Justice Owoeye’s ruling overturned the EFCC’s interference, ordering the repossession and dismantling of the aircraft, which has been stored at Lagos airport. The court also issued an injunction barring EFCC officials from obstructing the repossession process.

The ruling comes on the heels of Nigeria’s Federal High Court (Cape Town Convention and Aircraft Protocol) Practice Direction, which was issued on September 12, 2024. This practice direction obligates Nigerian courts to apply the Cape Town Convention’s provisions in relevant cases, ensuring a robust legal framework for the repossession of aviation assets.

Minister of Aviation and Aerospace Development, Festus Keyamo, publicly endorsed the court’s decision on his official X (formerly Twitter) account, calling it a “victory for Nigeria” and a significant step in the nation’s adherence to global aviation standards.