The High Court has ruled that Fly540 CEO Don Smith, along with executives David Cattermole and George Kivindyo, must pay a fine of Ksh 50,000 per day for failing to comply with a court order.
The order required the airline to allow an inspection of an aircraft, but the officials did not adhere to the directive, prompting legal action.
This case is part of a larger dispute between Fly540, East African Safari Air Express, and Canadian leasing firms Avmax Aircraft Leasing Inc and Wells Fargo Trust Company. The matter revolves around an alleged breach of agreements worth Ksh 775 million involving two Bombardier aircraft.
The leasing firms claim that Fly540 failed to honor its contractual obligations, leading to a legal standoff over the aircraft’s condition and associated records.
On March 1, 2023, both parties agreed in court to conduct a joint inspection of the aircraft and its technical records within 14 days.
This agreement was intended to resolve disputes over the aircraft’s maintenance status and to determine whether Fly540 had upheld its responsibilities under the leasing contracts.
However, the Canadian firms later accused Fly540 of obstructing access to crucial documents, including engine logs and maintenance records, which are essential for verifying the aircraft’s airworthiness and compliance with aviation regulations.
Justice Aleem Visram, who presided over the case, found that Fly540’s actions were deliberate. He noted that the airline had ample time to facilitate the inspection but instead chose to hinder the process. While the court had the option to order imprisonment for non-compliance, the judge opted for financial penalties instead.
The daily fine of Ksh 50,000 will remain in effect until the officials comply with the court’s order and allow the required inspection to take place.
The ruling highlights the challenges in the aviation sector when disputes arise over leased aircraft. Leasing firms depend on contractual agreements to protect their assets and ensure that operators maintain aircraft according to agreed-upon standards. Failure to comply with these terms can lead to legal action, financial penalties, and even repossession of the aircraft.
In this case, Fly540’s failure to provide access to documents and facilitate the inspection has resulted in significant legal consequences for its executives.For Fly540, this ruling adds to a series of controversies surrounding the airline, which has faced operational and financial challenges in recent years.
The ongoing legal battle with Avmax Aircraft Leasing Inc and Wells Fargo Trust Company could have further implications for the airline’s reputation and financial stability. If the airline continues to defy the court order, the accumulating fines could have a severe financial impact on its leadership and operations.
The leasing firms have emphasized that they will continue pursuing legal remedies until Fly540 fully complies with the agreement.
The case underscores the importance of upholding contractual agreements in the aviation industry and the legal repercussions that follow when companies fail to meet their obligations.
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