Corporate Jet Grounded by Intractable Contract Dispute

Contract disputes can sometimes become so intractable that litigation is the only way of achieving finality. In one case, positions became so entrenched that a corporate jet, which lay at the heart of the disagreement, had been grounded for so long that its owner no longer wanted anything more to do with it.

The 20-year-old jet had been delivered by its owner (company A) to company B for re-painting, routine maintenance and replacement of certain corroded parts. The works had been suspended for about a year due to a dispute over title to the jet but had continued after company A’s ownership was confirmed.

Company B eventually announced that work on the jet was substantially complete but demanded more than £1 million from company A for the work performed and for on-going maintenance and storage. Company B argued that it was entitled to retain possession of the aircraft – which had been grounded for more than six years as a result of the dispute – until its fees were paid in full.

Company A no longer sought the return of the aging aircraft but disputed the sums claimed. The Court found on the evidence that it owed company B over £930,000 as at February 17 2012 and was also liable to pay invoices raised since then. Company B was thus entitled to assert a lien over the jet until its fees were agreed and paid. The Court heard further argument as to what should now happen to the aircraft.

For advice on the appropriate action to take if your invoices remain unpaid, contact us.