FG at cross road over Arik, as legal tussle begins

  • Airline may be sold as scrap

There is a pall of uncertainty over what the Federal Government plans to do with Arik Air it acquired through the Assets Management Corporation of Nigeria (AMCON).

Government may end up selling the firm as scrap as devaluation could set in as a result of long drawn battle that may have begun.

Since the take-over of the carrier, the Federal Government is at a loss over what to do with the airline, just as experts urged the government to turn it into the proposed national airline that the government promised would fly before the end of 2017.

AMCON had complained that resuscitating the carrier would require enormous financing. Although the carrier appears to be stable, it is however a shadow of its former self, operating less than seven airplanes.

At inception eleven years ago, Arik Air operated over 25 brand new airplanes as it became the leading airline, operating over 150 flights daily.

The carrier was reportedly badly managed, leading to over N300b debts to AMCON, service providers and others.

Government’s plan for the carrier is however hampered by litigation from the founder of the carrier which could affect Ethiopian Airways’ decision to serve as technical partner to the airline.

Former Vice President of Arik Air who is now the Chief Executive Officer of Aero Contractors, Captain Ado Sanusi had shortly after AMCON took over the airline said the founder of the airline would file a suit to challenge the take-over.

The former owners made good the threat as they filed a N20 billion suit against the federal government and Ethiopian Airlines over recent claims in the media that they were negotiating the takeover of the airline.

The suit was instituted by the airline at the Federal High Court, Lagos against Ethiopian Airlines, the Federal Ministry of Transportation and the Attorney General of the Federation.

A copy of the suit which was filed on September 6 by Arik Air’s counsel, Babajide Koku, Chukwuemeka Nwigwe and Ezinne Emedom, was obtained by the News Agency of Nigeria on Sunday in Lagos.

In its statement of claim supported by a 20-paragraph affidavit deposed to by Chris Ndulue, a former Director with Arik Air, the plaintiff asked the court to restrain the first and second defendants from further negotiations on its takeover.

The plaintiff noted that the Asset Management Company of Nigeria, AMCON, had taken over the airline on February 8 which was challenged by its management via two suits already pending before the Federal High Court, Lagos.

According to the plaintiff, the suits numbers are FHC/L/CS/827/17 and FHC/L/CS/826/17, adding that the negotiations by the defendants will render the outcome of the suits nugatory.

“The plaintiff avers that the agreement of the second defendant with the first defendant will be wide ranging and intricately affect every aspect of the plaintiff herein, including but not limited to the day to day running technical as well as financial management which will affect the plaintiff as being the largest domestic and regional airline in Nigeria.

“The plaintiff further avers that the action taken by the first and second defendants will have a negative effect on the country’s image as the plaintiff being the largest airline will be pawned over to another country for management,” it said.

The plaintiff also averred that the negotiations had caused undue hardship and irreparable damage to the Arik Air brand and ongoing investment discussions as well as unbearable distress to the airline’s shareholders and directors.

It, therefore, asked the court to declare the negotiations null and void because the Ministry of Transportation had no power to transfer the management of the airline to Ethiopian Airlines while the suits over the takeover are pending.

The plaintiff also asked the court for an order directing the Attorney General of the Federation to ensure the investigation of Ethiopian Airlines by the appropriate authorities for inducing and interfering in the administration of justice in the pending suits.

It added that if found culpable, the airline should be charged to court for criminal contempt contrary to Section 133 (4) and (9) of the Criminal Code Laws of Lagos State, Cap C17, Laws of Lagos State of Nigeria, 2004.

The plaintiff also asked the court for an order compelling the Inspector General of Police to investigate the actions of the second defendant.

It further asked the court for N20 billion being punitive damages against the first defendant for inducing or partaking in the interference of the rights of the plaintiff and the administration of justice.

The suit is yet to be assigned to any judge and no date has been fixed for hearing.

AMCON had earlier denied it was in discussion with Ethiopian airlines over Arik.

 

Wole Shadare

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