LOMBARD NORTH CENTRAL PLC EUROPEAN SKYJETS LIMITED (IN LIQUIDATION)

LOMBARD NORTH CENTRAL PLC EUROPEAN SKYJETS LIMITED (IN LIQUIDATION)

Lombard was entitled to terminate the Loan Agreement and enforce its security over the Aircraft based on Events of Default, including breach of continuing representations and warranties regarding maintenance agreements and material adverse change. The late payment charges were not contractually due, but this did not affect Lombard’s right to terminate. The sale of the Aircraft was conducted in accordance with Lombard’s duties as mortgagee. Skyjets and Skytime failed to prove entitlement to damages as they could not establish that, but for Lombard’s actions, the business would have survived or obtained necessary funding.

Parties
Claimant/part 20 Defendant: Lombard North Central PLC; Defendant/part 20 Claimant: European Skyjets Limited (In Liquidation); Part 20 Claimant: European Skytime Limited (In Liquidation)
Jurisdiction
England and Wales
Judgment Date
30 March 2022
Procedural Posture
Commercial Loan Enforcement and Counterclaim / High Court Trial Judgment
Outcome
Judgment for Lombard North Central PLC against European Skyjets Limited. Skyjets and Skytime’s counterclaims dismissed.
Legal Topics
Loan Agreement Termination, Mortgage Enforcement, Breach of Contract, Conversion, Damages, Waiver, Estoppel, Penalty Clauses, Material Adverse Change, Asset Cover Percentage
Banking and Finance Contract Law Secured Transactions Loan Agreement Termination Mortgage Enforcement Breach of Contract Conversion Damages +5 more

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Parties

Lombard North Central PLC

Claimant/part 20 Defendant

European Skyjets Limited (In Liquidation)

Defendant/part 20 Claimant

European Skytime Limited (In Liquidation)

Part 20 Claimant

Procedural Posture

Commercial Loan Enforcement and Counterclaim / High Court Trial Judgment

Legal Issues

  1. 1 Whether Lombard validly terminated the Loan Agreement and enforced its security over the Aircraft
  2. 2 Whether Lombard breached its duties as mortgagee in the sale of the Aircraft
  3. 3 Whether Skyjets and Skytime are entitled to damages for breach of contract and/or conversion

Ratio Decidendi

Lombard was entitled to terminate the Loan Agreement and enforce its security over the Aircraft based on Events of Default, including breach of continuing representations and warranties regarding maintenance agreements and material adverse change. The late payment charges were not contractually due, but this did not affect Lombard’s right to terminate. The sale of the Aircraft was conducted in accordance with Lombard’s duties as mortgagee. Skyjets and Skytime failed to prove entitlement to damages as they could not establish that, but for Lombard’s actions, the business would have survived or obtained necessary funding.

Court Disposition

Judgment for Lombard North Central PLC against European Skyjets Limited. Skyjets and Skytime’s counterclaims dismissed.

Orders

  • Skyjets to pay Lombard $3,566,297.40 plus contractual interest.
  • Counterclaims by Skyjets and Skytime dismissed.