From disaster to disaster

Pakistan and its problems with international deals must now be extremely familiar to UK courts. The embarrassment these deals cause and the loss incurred to the national exchequer has caused immense harm in the case of Broadsheet and other deals. There is now a new crisis involving a PIA Boeing 777 which has been impounded at Kuala Lumpur International Airport following a judgment by a Malaysian court. The dispute pertains to the lease agreement on the aircraft, which was originally leased from the Irish company, AerCap and then through the leasing giant Peregrine Aviation Charlie Limited. It appears, however, that some percentage of the amounts promised by Pakistan to Peregrine were not paid in 2020, and it went to court in the UK. While the next hearing in the UK was due to come up on January 20, Peregrine moved a Malaysian court and received an order under which the airplane has been seized for now. Pakistan is, according to the Malaysian court order, required to pay $14 million on the leasing of this aircraft and the other Boeing 777.

The matter is no doubt one of immense embarrassment. It also delivers another setback to PIA, an entity once a giant in the country but now already struggling to survive and stay afloat. PIA Spokesman Abdullah Hafeez Khan has said that the action by Peregrine to move a Malaysian court while the case was still ongoing in the UK is highly unusual. This may indeed be true, but it does reflect the lack of trust in PIA and possibly the anxiety on the part of Peregrine to recover its money. PIA has also said the amount due to the Dubai giant was being renegotiated because of the changes in aviation functioning as a result of the Covid-19 pandemic and the reduction in air travel.

We accept all this. The problem however is that once again Pakistan has been embarrassed internationally. A court has upheld the view taken by the Dubai-based company which had leased the airplane. It is difficult to understand why PIA sent the airline or the airplane in question to a foreign country when it knew a dispute was on in court. One can imagine the shock of passengers who boarded the flight only to find some time later that it had been seized by Malaysian authorities. The passengers have since returned home on other flights and Malaysian authorities have also said the two pilots and other airline crew can return . But this is not the point. The question is the handling of the whole affair by PIA, the possible incompetence and mismanagement involved and the larger issue of what the future of PIA is to be, given its failure on so many different fronts.