The Court of Appeal has dismissed an appeal filed by British aviation company Aviation Services International Ltd (AHS) against Precision Aviation Handling Company Ltd (PAHCOL), now AHS Aviation Handling Services Nigeria Ltd, and other respondents over a proposed aviation ground-handling joint venture in Nigeria.
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In a unanimous judgment delivered on Monday by a three-member panel, the Court of Appeal affirmed the decision of the Federal High Court, holding that the contemplated Joint Venture Agreement between the parties was never executed and that the arrangement therefore remained inchoate.
The lead judgment was delivered by Justice Abang, who held that the trial court’s findings were supported by the evidence placed before it.
Precision Support Services Ltd, Merit Oil Ltd and PAHCOL were respondents in the appeal, represented by Chioma Linda Ekene-Okwunma, Esq.
The dispute arose from a 2016 Memorandum of Understanding between AHS and PAHCOL concerning the proposed development of aviation ground-handling services in Nigeria.
A major issue before the appellate court was whether the Federal High Court was right to hold that the parties’ failure to execute the contemplated Joint Venture Agreement meant that the proposed transaction was never fully completed.
Justice Abang resolved the issue in favour of the respondents, holding that the trial court properly evaluated the facts and evidence before it.
The Court of Appeal also upheld the lower court’s treatment of a contractual clause purporting to confer exclusive jurisdiction on English courts.
According to the appellate court, the foreign jurisdiction clause could not, in the circumstances, override mandatory Nigerian laws governing a transaction involving a Nigerian company and business activities to be carried out in Nigeria.
The court reaffirmed that parties may agree on a foreign forum for resolving disputes, but such an agreement does not automatically displace mandatory Nigerian laws regulating business activities undertaken within the country.
The panel also upheld the trial court’s finding that, at the time the suit was instituted, AHS was in contravention of Section 33(1)(a) of the Civil Aviation Act 2006, which regulates eligibility for licences, permits, certificates and authorisations issued by the Nigerian Civil Aviation Authority.
On the issue of foreign currency, the Court of Appeal accepted the respondents’ argument that the evidence before the trial court supported its conclusion that the purported importation of funds by AHS into Nigeria did not comply with the applicable Nigerian legal framework governing foreign-currency inflows.
The appellate court equally upheld the finding that AHS had abandoned the preliminary obligations contemplated under the arrangement.
Consequently, the appeal was dismissed for lacking merit, while the judgment of the Federal High Court was affirmed. The Court of Appeal also awarded ₦1 million in costs in favour of the respondents.
The underlying dispute had earlier been determined in 2023 by Justice Obiora Egwuatu of the Federal High Court in Abuja.
The trial court terminated the arrangement between the parties and awarded ₦2 million in damages to Precision Support Services Ltd.
Justice Egwuatu had held that the Memorandum of Understanding expired by effluxion of time on June 30, 2017, while the contemplated Joint Venture Agreement never became effective because it was not executed.
The Federal High Court also found that AHS had abandoned preliminary obligations under the proposed arrangement and had failed to comply with applicable Nigerian laws governing aspects of the transaction.
With the Court of Appeal judgment, those findings of the Federal High Court remain affirmed.
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