Lombard North Central Plc v European Skyjets Ltd [2022] EWHC 728 (QB) (30 March 2022)

Lombard North Central Plc v European Skyjets Ltd [2022] EWHC 728 (QB) (30 March 2022)

Lombard was entitled to terminate the Loan Agreement due to repeated defaults and breaches, and validly enforced its security by selling the Aircraft. The late payment charges were not contractually justified but were imposed as a condition of forbearance. Lombard did not breach its duties as mortgagee in the sale process. The counterclaims for damages by Skyjets and Skytime fail.

Citation
[2022] EWHC 728
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 Dispute / High Court Trial Judgment
Outcome
Claim allowed, counterclaim dismissed
Legal Topics
Secured Lending, Loan Agreement Termination, Mortgage Enforcement, Breach of Contract, Conversion, Duties of Mortgagee, Penalty Clauses
Commercial Law Contract Law Banking Law Secured Lending Loan Agreement Termination Mortgage Enforcement Breach of Contract Conversion +2 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 Dispute / High Court Trial Judgment

Legal Issues

  1. 1 Was Lombard entitled to terminate the Loan Agreement?
  2. 2 Did Lombard validly enforce its security and sell the Aircraft?
  3. 3 Did Lombard breach its duties as mortgagee in the sale process?

Ratio Decidendi

Lombard was entitled to terminate the Loan Agreement due to repeated defaults and breaches, and validly enforced its security by selling the Aircraft. The late payment charges were not contractually justified but were imposed as a condition of forbearance. Lombard did not breach its duties as mortgagee in the sale process. The counterclaims for damages by Skyjets and Skytime fail.

Court Disposition

Claim allowed, counterclaim dismissed

Orders

  • Lombard entitled to outstanding balance under the Loan Agreement
  • Skyjets and Skytime's counterclaims for damages dismissed