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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Blue Sky One Ltd & Ors v Blue Airways Llc & Ors [2009] EWHC 3314 (Comm) (21 December 2009) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2009/3314.html Cite as: [2009] EWHC 3314 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
(1) BLUE SKY ONE LIMITED (2) BLUE SKY TWO LIMITED (3) BLUE SKY THREE LIMITED |
Claimants |
|
- and - |
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(1) BLUE AIRWAYS LLC (2) MAHAN AIR (3) BLUE SKY AVIATION CO. FZE - and – (1) BALLI GROUP PLC (2) CRYPTON LIMITED (3) BLUE SKY SIX LIMITED (4) BLUE SKY FOUR LIMITED (5) BLUE SKY FIVE LIMITED And Between: PK AIRFINANCE US INC - and - (1) BLUE SKY TWO LIMITED (2) BLUE SKY THREE LIMITED (3) BALLI GROUP PLC (4) MAHAN AIR (5) BLUE SKY AVIATION CO. FZE |
Defendants Third Parties Claimant Defendants |
____________________
MR M. CRANE QC, MR J. KIMBELL and MISS G. MORGAN
(instructed by Piper Smith Watton LLP) for the Defendants
MR S. MORIARTY QC and MR J. PASSMORE
(instructed by Clifford Chance LLP) for PK Airfinance
Hearing dates: 7-31 July, 8-9 October 2009
____________________
Crown Copyright ©
Index
I. Introduction | 1 |
II. Procedural history | 16 |
III. The position of Blue Airways | 23 |
IV. Applications to amend the pleadings | 25 |
V. Witnesses | |
(a) Factual evidence | 37 |
(b) Expert witnesses | 50 |
VI. Findings | |
(a) Background to the transactions | 54 |
(b) The Executive Instruction and the FERF Resolution | 70 |
(c) The initial meeting about the Package 1 aircraft | 77 |
(d) Developments between 18 January and the signing of the contracts | 86 |
(e) The meetings in Düsseldorf on 24 and 25 February 2006 | 101 |
(f) Developments after the Düsseldorf meetings | 113 |
(g) The leases with BAW | 116 |
(h) The Package 2 aircraft and the mortgages | 135 |
(i) The May 2007 Dubai meetings and the agreements | 159 |
(j) The background to meetings in Düsseldorf on 30 and 31 August 2007 | 170 |
(k) The meetings in Düsseldorf on 30 and 31 August 2007 | 180 |
(l) Provision and use of the Bills of Sale | 183 |
(m) The interest of the US authorities | 190 |
(n) Exchanges in February – March 2008 | 194 |
(o) The imposition of the TDO | 199 |
(p) Steps taken in the light of the TDO | 200 |
(q) The July 2008 Memorandum of Understanding | 217 |
(r) August – November 2008 | 219 |
(s) Execution of the Bills of Sale & registration of aircraft in Iran | 227 |
VII. Discussion | 242 |
(a) Trust | 243 |
(i) Express Trust | 244 |
(ii) Purchase Money Resulting Trust | 255 |
(iii) Trust arising from the other arrangements | 258 |
(b) Were the leases to BAW shams? | 263 |
(c) Was title to the aircraft transferred by the Bills of Sale? | 268 |
(d) The counterclaim | 284 |
(i) The first contractual claim for repayment | 289 |
(ii) The alternative contractual claim for repayment | 297 |
(iii) The restitutionary claims for repayment | 299 |
(e) Remedies | |
(i) Delivery up or damages? | 302 |
(ii) Assessment of damages | 324 |
VIII. Conclusion | 327 |
Mr Justice Beatson:
I Introduction:
II Procedural history:
III The position of Blue Airways:
IV Applications to amend the pleadings:
V Witnesses:
(a) Factual evidence:
(b) Expert witnesses:
VI Findings:
(a) The Background to the Transactions:
(b) The Executive Instruction and the FERF Resolution:
"[T]he implementing bank is bound to make the corresponding facilities available to the beneficiary in a way agree[d] upon by both parties in observance of other regulation and after being ensured of title possession of aircrafts and receiving sufficient securities from the foregoing company. Mahan Airline's contribution for the above acquisition will be at least ten per cent of facilities received."
"A) Subject-Matter and Objectives of the Resolution:
1. Provision of foreign currency facilities for acquisition of four aircrafts from the credits of foreign currency account;
2. Facilities pertaining to the acquisition of air fleet for Mahan Airlines; and
3. The possibility of using the aircrafts by Mahan Airlines for flying in various lines.
B) Assumptions:
1. $140 million was proved and allocated for the foregoing subject-matter.
2. Four aircrafts with suitable prices and technical conditions acceptable to the Civil Aviation [Authority] were selected by Mahan Airlines.
3. The foreign currency reserve account imposed two conditions for the execution of this resolution:
3.1 establishment of the existence of technical conditions acceptable to the Civil Aviation [Authority]; and
3.2 establishment of the existence of Mahan Airline's title right on the four aircrafts.
4. The title of the first aircraft (A320) was transferred to Mahan Airlines through a company (SPV1), whose shares are owned by Mahan Airlines' appointed trustees; and the existence of both conditions were established.
5. Three B747 aircrafts are ready for transfer and pricing was made on the basis of the international fair prices.
6. Current legal conditions and prevailing law do not allow direct control by Mahan Airlines of the shares of the companies/buyer companies of the aircraft (SPV). [Mr Vahid Alaghband's translation refers to "control" and not to "direct control".]
7. Legal solution to execute the resolution of Trustees Board of Foreign Currency as well as to observe law and to optimise executive interests, includes to use for each aircraft a SPV company with shares owned by other natural and/or legal entities and entering into agreements required for declaration and establishment of title rights in the name of Mahan Airlines. The issue was reviewed and discussed during preliminary review and discussion meetings of the Trustees Board of Foreign Exchange and briefing reports pertaining to the approval of the credit was reflected and discussed at the Trustees Board of Foreign Currency and relevant committees.
8. Shareholders of SPV companies shall be natural and/or legal persons who are acceptable to the aircraft seller considering bank and trade credits for making such a deal as with an amount of $100 million and who deemed such deal in direction of their current activities or as an action for diversification of their commercial and economic activities. [Mr Alaghband's translation refers to the shareholders being individuals or entities with "the creditworthiness and commercial and banking lines that would be commensurate with entering into a transaction in the range of $100 million vis a vis the sellers of the aircraft…"]
9. The required actions were made for the first aircraft [A320] and Mahan's title right has been provided for Mahan in the context of a trustee agreement, and the evidence may be introduced.
10. In connection with three other aircrafts [B474], actions should be taken in such a way that the following are ensured, with the due consideration of types and brands of aircrafts: [Mr Alaghband's translation states "in view of the type and brand of the aircraft, operative steps should be taken in a manner which assures compliance with the following principles".]
10.1 Technical criteria of USA sanctions are observed in view of form and law and this act is not deemed a violation of such sanctions.
10.2 As soon as appropriate conditions have been reached and legal obstacles arising from sanctions have been removed, the title of shares of SPV companies which are owner of the aircrafts are also officially transferred to Mahan Airlines with no need to the approval of the initial shareholders.
10.3 Title deeds of aircrafts are to be avoided to be mortgaged against the loan received from foreign currency account for Bank Melli Iran or Central Bank or Iranian government companies. This condition is to be evaluated in accordance with legal views received. [Mr Alaghband's translation states "this condition is applicable in view of the legal opinions received".]
10.4 SPV companies' title rights, such as management, decision making, and spending of moneys resulted from operation of the aircrafts, are allocated and controlled for credit provision for refunding the facilities of this resolution, in observance of all legal considerations.
10.5 The communication with manufacturers of the pertaining aircrafts may continue to receive after sales services, such as spare parts, engineering services, issuance of technical documents for flight… in this respect, using the existing experience, the acquired aircrafts are registered in European companies and repaired and maintained under supervision of the aviation organisation of such countries for as long as needed."
"5. Airbus planes shall be paid for and foreign currency facilities for the aircraft shall be used in accordance with stages as follows:
5.1 Mahan Airlines shall draw up and enter into agreement(s) required for the acquisition of A320 planes and for title transfer of the same to SPV1 company.
5.2 An official agreement shall be prepared, drawn up and exchanged between and by Mahan Airlines and the shareholder of SPV1 providing the acknowledgement of the corresponding shareholder and his/her confirmation about the fact that the shareholder is not personally the possessor of the shares of the company he/she is the trustee of such shares and the shares are given in trust.
5.3 Mahan Airlines shall produce to Bank Melli-Dubai the agreement subject matter of clause 5.2 above as well as a declaration by Civil Aviation Organisation certifying technical specifications of A320 plane to be purchased, along with payment instructions for the corresponding money, as per specified prices, to beneficiary companies.
…
6. B747 planes shall be paid for in foreign currency facilities for the aircraft shall be used in accordance with stages as follows:
6.1 Mahan Airlines shall draw up and enter into agreement(s) required for the acquisition of three B747 planes and for title transfer of the same to SPV2, SPV3 and SPV4 companies.
6.2 An official agreement shall be prepared, drawn up and exchanged between and by Mahan Airlines and the shareholder of SPV2, SPV3 and SPV4 companies providing points as follows:
6.2.1 The shareholder of the three companies of SPV2, SPV3 and SPV4 gives Mahan Airlines the right of share option and empowers Mahan Airlines, with the right of substitution, to buy for a price of €1 the shares of any of the companies once legal conditions permit to do so and obstacles arising from US sanctions are removed.
6.2.2 On the strength of the share option contract aforesaid and provision of Mahan Airline's right to buy the shares, naturally SPV companies undertake to avoid selling or assigning shares of the abovementioned companies as well as selling aircrafts possessed by each of SPV companies until Mahan Airlines uses the share option or during the time when share option contract is valid. …
6.2.3 The SPV companies' directors enter into and exchange separate agreements with Mahan Airlines on arrangements for management of the company and good performance of the company's affairs and fulfilment of obligations subject matter of this instruction.
6.2.4 Under lease contracts and for the purpose of operation, the SPV companies make available the acquired aircrafts to certified companies approved by Mahan Airlines.
6.2.5 Incomes gained from lease contracts of each one of the three companies shall be allocated for the payment of the company and current and legal costs of the company. Possible surplus of the incomes gained by each company shall be kept in the companies' account, until the acquisition contract is valid, and distribution of profits among shareholders shall be avoided until the shares are possessed by Mahan Airlines or the share option agreement expires, whichever earlier.
…
6.3 Mahan Airlines shall produce to Bank Melli-Dubai the documentation referred to in clause 6.2 (6.2.1 to 6.2.6), along with written confirmation of the managing director and the board of Mahan Airlines certifying the conformity of such documents and papers with a nature considered for these clauses and acknowledging the receipt of powers and title rights through such documents and papers as well as a declaration by Civil Aviation Organisation certifying technical specifications of the three considered planes, along with payment instructions for the corresponding money of the abovementioned aircrafts in full for all three aircrafts. …
6.4 Upon receipt of the documents and papers referred to in clause 6.3 and written notification by Mahan Airlines board of directors certifying the provision of title right for that company through corresponding agreement and documentation, Bank Melli-Dubai branch shall remit the price of deal to related beneficiary in accordance with findings and introduction by Mahan Airlines. …"
(c) The initial meeting about the Package 1 aircraft:
"You bring the entire money and we'll enter the scene as a source and in this case we'll ask you for our tax expenses."
(d) Developments between 18 January and the signing of the contracts:
"You may recall that in our meeting in Tehran we discussed a different structure. Based on that we have delivered the opinion of Cayman counsel. As you appreciate, we cannot entertain a structure which violates applicable laws."
"delicate point is that the bank should be convinced about the last step. It can be done in two different ways; (first) issuing an authority to transfer the ownership to a non-Iranian company subject to this condition that it should not violate the embargo… (second) a trustee agreement to be signed. I believe that the first solution can be easier and doable".
"Although the first option that you mention looks superficially easier, I find it far more risky from a compliance point of view. We cannot act as a pure intermediary in transferring title to Mahan or to its nominees because we are advised that that could put us in breach of the law. We will not be part to a transaction which could break the law. This deal has to be structured correctly and with full regard to the legal restrictions. We should have no doubt that the deal will be examined in detail in the future and we have to be able to prove that our involvement has a sound commercial basis and was structured not to violate any applicable laws".
"The purchase price will be settled by the loan amount due and owing under the applicable loan agreement being reduced to zero and the applicable mortgage being released."
(e) The meetings in Düsseldorf on 24 and 25 February 2006:
"(i) Under the loan agreements, FZE lent money for the purchase of, and maintenance work on, the first aircraft (24363), the second aircraft (24383) and the third aircraft (26879), repayable in equal instalments in accordance with a repayment plan specified in those agreements. In each case, security for the repayment of the loans was given in the form of twenty-four promissory notes.
(ii) Under the Letter Agreement, it was agreed inter alia that all payment obligations to FZE under the loans were to be made solely from the net proceeds of leasing the Package 1 aircraft, and to the extent that there was a shortfall at any stage, the borrowers' payment obligations were to be suspended until such time as there were adequate net proceeds under those leases.
(iii) Under the Option Agreement, BSA granted Mahan an option, valid until 31 March 2020 to acquire the shares in the Cayman SPV companies which, at that stage, it was envisaged would be purchasing the Package 1 aircraft. However, that option was subject to an important proviso, in as much as it could not be exercised for as long as the transfer of those shares to Mahan would be a violation of applicable laws, regulations, or administrative proceedings (which it is common ground included US sanctions against Iran).
(iv) By a letter of the same day, BSA also formally authorised Mr Mazaheri to execute its obligations under the Option Agreement subject to a number of conditions, including receipt of a legal opinion from Clifford Chance on the question of whether the exercise of the option complied with the requirements of the option agreement."
(f) Developments after the Düsseldorf meetings:
(g) The leases with BAW:
(h) The Package 2 Aircraft and the Mortgages:
"[O]n the basis of advice received we will categorically not sell any aircraft to Iran, nor will we lease them to Iranian carriers, for as long as OFAC or EU rules prohibit such sale or leasing operation. This policy absolutely and categorically applies to the three aircrafts we own and it will absolutely and categorically apply to the three aircrafts on which we are working with you. We intend to keep ownership of all six aircrafts within UK entities of our group."
(i) The May 2007 Dubai meeting and the agreements:
"In order to finance the purchase of three additional 747-400 aircraft (the "additional aircraft"), the parties have agreed that Balli and its affiliates shall be allowed to provide the airplanes as collateral for the purchase of the additional aircraft."
"On or before December 15 2007, Balli shall present a final accounting of the amounts received in US$ from the proceeds of the Mahan checks as well as a final account of the costs actually incurred in connection with the airplanes by Balli. Balli shall be entitled to charge interest on the Balli capital cost loan at the rate of 1% over its cost of borrowing which is currently at 8.5% per annum."
"In consultation with Mahan, Balli has caused the purchase of additional aircraft in December 2006 pursuant to the terms of a short term bridge finance facility provided by [PK]. The parties have reached the following agreements in connection with the additional aircraft:
1. Balli shall try to extend the terms of the bridge facility to 18 months[2] at terms set forth herein and accepted by Mahan (the "new facility"). Balli shall provide a copy of the new facility to HE Mr T Mazaheri. Balli may provide the original aircraft and additional aircraft as collateral for the new facility. Balli hereby reconfirms that other than in connection with a new facility it has not pledged or otherwise encumbered the airplanes directly or indirectly for its benefit.
…
4. For as long as the new facility is in place, the additional aircraft will not be allowed to fly into or land in certain restricted territory set out in the new facility including Iran.
5. The new facility is expected to require principal repayments of $22 million per year plus annual interest costs of $12 million. The parties shall use their best efforts to maximise the utilisation of the additional aircraft… in order to generate adequate funds for the proper service of principal and interest in the new facility. In case of any shortfall, Mahan shall provide on a timely basis adequate funds to service the new facility during its term.
6. Lender shall provide the funds for timely repayment of the new facility at its maturity. … Lender shall … have the right to partial prepayment of the new facility in $50 million increments as a result of which an airplane and additional aircraft mortgage shall be released."
(j) The background to meetings in Düsseldorf on 30 and 31 August:
(k) The Meetings in Düsseldorf on 30-31 August 2007:
"In the event that Mr Tahmasb Mazaheri ("TM") comes to the conclusion that:
(a) the Lender has performed all its obligations under the Loan Agreements as per the terms and conditions of such agreement; and
(b) Mahan and Lender have performed their respective obligations under the Loan Agreements, the Option Agreements and the Letter Agreements;
And that:
(a) Crypton has breached its obligations under [Specified Loan Agreements and or Option Agreements and or Letter Agreements]; or
(b) Balli has breached its obligations under [Specified Loan Agreements and the Letter Agreements];
TM may execute each signed Bill of Sale with respect of each aircraft and additional aircraft (individually a "Bill of Sale" or collectively the "Bills of Sale") (sample form attached hereto) which shall be delivered in trust to TM for the due execution of this Side Agreement, provided that:
(a) execution of the Bill of Sale will not be in violation of any applicable laws and regulations including the pertinent provisions of any sanction laws;
(b) the proceeds from the execution of the Bill of Sale will be applied against the obligations of Crypton and Balli under the loan agreement; and
(c) TM procures a release on behalf of the Lender in favour of Crypton upon execution of the Bill of Sale including return to Crypton and Balli of any valid and outstanding bills of exchange issued in favour of the Lender as security under the terms of the Loan Agreements (the "Bills of Exchange"). …
The parties further agree that:
(a) the Bills of Sale and all the Bills of Exchange shall be stored in the safe deposit box with a reputable international bank acceptable to all parties (the "safe deposit box"). The safe deposit box shall be opened in the name of TM and shall be accessible to duly appointed representatives of Mahan and Balli only in the event that TM cannot access the safe deposit box due to incapacity or other unforeseen events.
(b) In the event the Lender provides readily available funds to Crypton or Balli in increments aggregating to $50 million (according to schedule acceptable to Crypton) per Additional Aircraft, and Crypton and or Balli cannot procure the release of each additional aircraft within 30 days of such funding, Balli and Crypton undertake to return such funding forthwith.
…
(d) Balli and Crypton shall provide the relevant information requested by TM from time to time.
(e) Lender hereby acknowledges that it has received $31,080,000 at this date from Crypton under the Loan Agreements and Letter Agreements."
In view of the duplication of the letters identifying the clauses, I shall refer to the last five clauses as contained in the "further agreement" in the SLA.
(l) Provision and use of the Bills of Sale:
(m) The interest of the US authorities:
"Neither Mahan Airways, nor any other Iranian entity has ever had control of these three aircraft, nor are they shareholders in Blue Airways or have control of Blue Airways. Our only connection with Mahan Airways is through an industry standard agreement under which Mahan provides our leased fleet with ground and passenger handling services" and "… under the lease agreement with the owners we are specifically prohibited from sub-leasing or re-exporting in any form the leased aircraft… without written consent of the owners. We confirm that we have never applied for such authorisation, nor have we sub-leased or re-exported any of the above referred leased aircraft to Iran."
(n) Exchanges in February – March 2008:
(o) The imposition of the TDO:
(p) Steps taken in the light of the TDO:
(q) The July 2008 Memorandum of Understanding:
(r) August – November 2008:
(s) Execution of the Bills of Sale & registration of aircraft in Iran:
"[The Bills of Sale] are at the disposal of your esteemed bank. Since it is required to present the above mentioned Bills of Sale to competent international legal authorities and insurance companies, so I would like to ask you to order for above mentioned documents to be at the disposal of this company, so that by providing some copies and presenting them to Civil Aviation Authority and certifying of its copies, firstly one copy of the documents which has been certified by the mentioned organisation, should be returned to your respected bank. Secondly, this company would waive itself from the right for sale, mortgage and pledge over the above mentioned aircraft without authorisation by that esteemed bank."
VII Discussion:
(a) Trust:
(i) Express trust:
"The process of negotiation and progressing towards a complete and formalised agreement is one which may contain many ambiguities. The purpose of the final document is to remove these ambiguities and to define authoritatively and clearly what the parties' respective rights and obligations are to be."
See also Shogun Finance Ltd v Hudson [2004] 1 AC 910, at [49] per Lord Hobhouse for the importance of the written contractual document to the certainty of the contract in English Law.
(ii) Purchase money resulting trust:
(iii) Trust arising from the other arrangements:
(b) Were the leases to BAW shams?
"What the parties privately intended or expected (either before or after the contract was agreed) may be evidence of what, objectively discerned, was actually agreed between the parties: see Lord Hoffmann's speech in the Chartbrook case at [64] to [65]. But ultimately what matters is only what was agreed, either as set out in the written terms or, if it is alleged those terms are not accurate, what is proved to be their actual agreement at the time the contract was concluded." (at [91])
(c) Was title to the aircraft transferred by the execution of the Bills of Sale?
(d) The Counterclaim:
(i) The first contractual claim for repayment:
(ii) The alternative contractual claim for repayment:
(iii) The restitutionary claims for repayment:
(e) Remedies:
(i) Delivery up or damages?
"3 Form of judgment when goods are detained
(1) In proceedings for wrongful interference against a person who is in possession or in control of the goods relief may be given in accordance with this section, so far as appropriate.
(2) The relief is –
(a) An order for delivery of the goods, and for payment of any consequential damages, or
(b) An order for delivery of the goods, but giving the defendant the alternative of paying damages by reference to the value of the goods, together in either alternative with payment of any consequential damages, or
(c) Damages.
(3) Subject to rules of court –
(a) Relief shall be given under only one of paragraphs (a), (b), and (c) of subsection (2),
(b) Relief under paragraph (a) of subsection (2) is at the discretion of the court, and the claimant may choose between the others.
…
(5) Where an order is made under subsection (2)(b) the defendant may satisfy the order by returning the goods at any time before execution of judgment, but without prejudice to liability to pay any consequential damages.
(6) An order for delivery of the goods under subsection (2)(a) or (b) may impose such conditions as may be determined by the court, or pursuant to rules of court, and in particular, where damages by reference to the value of the goods would not be the whole of the value of the goods, may require an allowance to be made by the claimant to reflect the difference."
"Conversion is the principal means whereby English law protects the ownership of goods. Misappropriation of another's goods constitutes conversion. Committing this tort gives rise to an obligation to pay damages. Payment of damages may have proprietary consequences. Payment of damages assessed on the footing that the plaintiff is being compensated for the whole of his interest in the goods extinguishes his title…. Further, when the defendant is in possession of the plaintiff's goods remedies available to the plaintiff include a court order that the goods be delivered up…" ([77])
"Vindication of the plaintiff's proprietary interests requires that, in general, all those who convert his goods should be accountable for benefits they receive. They must make restitution to the extent they are unjustly enriched. The goods are his, and he is entitled to reclaim them and any benefits others have derived from them. Liability in this regard should be strict subject to defences available to restitutionary claims such as change of position…. Additionally, those who act dishonestly should be liable to make good any losses caused by their wrongful conduct. Whether those who act innocently should also be liable to make good the plaintiff's losses is a different matter." ([79])
"The aim of the law, in respect of the wrongful interference with goods, is to provide a just remedy. Despite its proprietary base, this tort does not stand apart and command award of damages measured by some special and artificial standard of its own. The fundamental object of an award of damages in respect of this tort, as with all wrongs, is to award just compensation for loss suffered. Normally ("prima facie") the measure of damages is the market value of the goods at the time the defendant expropriated them. This is the general rule, because generally this measure represents the amount of the basic loss suffered by the plaintiff owner. He has been dispossessed of his goods by the defendant. Depending on circumstances some other measure, yielding a higher or lower amount, may be appropriate. The plaintiff may have suffered additional damage consequential on the loss of his goods. Or the goods may have been returned." ([67])
"Sometimes, when the goods or their equivalent are returned, the owner suffers no financial loss. But the wrongdoer may well have benefited from his temporary use of the owner's goods. It would not be right that he should be able to keep this benefit. The court may order him to pay damages assessed by reference to the value of the benefit he derived from his wrongdoing. I considered this principle in Attorney General v Blake [2001] 1 AC 268, 278-280. In an appropriate case the court may award damages on this 'user principle' in addition to compensation for loss suffered. For instance, if the goods are returned damaged, the court may award damages assessed by reference to the benefit obtained by the wrongdoer as well as the cost of repair." ([87])
(ii) Assessment of damages:
VIII Conclusion:
(a) The Balli parties do not hold the Package 1 aircraft or the shares in the claimant SPV companies on trust for Mahan or FZE (Part VII(a));
(b) Title to the aircraft was not transferred to FZE by the execution of the Bills of Sale (Part VII(b));
(c) Subject to any set off by the Balli parties which is to be determined in Phase 2, Mahan and FZE are in principle entitled to recover $57.8 million (in round figures) which was paid in relation to the Package 2 aircraft ((Part VII(c)(i)), and
(d) Mahan and FZE have wrongfully interfered with the aircraft for which the appropriate remedy is an order under section 3(2)(b) of the Torts (Interference with Property) Act 1977 for delivery of the aircraft, but giving Mahan and FZE the alternative of paying damages by reference to the value of the aircraft (Part VII(d) and (e)). The quantum issues which have been left to Phase 2 include the value of the aircraft, and consequential and user damages.
Note 1 The terms set out in this section are those in the documents when re-signed in August 2007. [Back] Note 2 The agreements signed in May had stated that Balli was obliged to try to extend the bridge facility to three years: on this see [179] and [181]. [Back]