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January 23, 2021

Plane seizure in Malaysia: PIA pays Rs1.124 bn to jet company

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January 23, 2021

LONDON: The Pakistan International Airlines (PIA) informed a judge at the London High Court on Friday that it has paid around $7 million (Rs1.124 billion) to the Peregrine Aviation Charlie Limited in the case pertaining to two jets leased to it by the Dublin-based AerCap.

It’s over the same case that the Malaysian authorities last Friday seized a PIA Boeing-777 at the Kuala Lumpur airport on the orders of a local court over the non-payment of aircraft lease dues owed to the AerCap. Lawyers for both the PIA and the airliner sought adjournment on Friday to a later date in the hope that the full amount will be paid through an agreement without the court issuing any order against the PIA.

Appearing online, the airline’s lawyer Erin Hitchens requested the judge to adjourn the hearing as the parties settle out issues of lease, rent, interest, lease and allocation of payment. The claimant’s lawyer told the court: “The claimant’s position is that the money was paid today by the defendant (PIA).”

The court heard that the PIA didn’t make payments since it asked for the amendment to its claim in July. The court was told the PIA owed $580,000 per month to the airliner but it didn’t pay and initiated litigation.

The leasing company had filed a case against the PIA in the London High Court in October 2020 for its failure to pay the leasing fee worth about $14 million, which had been pending for six months. In response, the PIA had maintained that since the COVID-19 pandemic affected the aviation industry, there should be a reduction in the overhead charges. Meanwhile, the leasing company kept an eye on the activities of the PIA, and as soon as it received the information of Flight 895's scheduled landing in Malaysia, it appealed to the Malaysian court to seize the aircraft as per international civil aviation leasing laws, sources said.

The Boeing 777 aircraft was seized after the London High Court issued the order, an airline spokesman had said. “A PIA aircraft has been held back by a local court in Malaysia, taking a one-sided decision pertaining to a legal dispute between the PIA and another party pending in a UK court,” PIA spokesman Abdullah H Khan said in a statement at the time but on Friday the PIA’s lawyers raised no objections to the seizure of plane in Malaysia.

The interim injunction ordered that the PIA is restrained from moving two aircraft in its fleet – a Boeing 777- 200ER with serial number 32716 and a Boeing 777- 200ER with serial number 32717.