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 validly terminated the Loan Agreement due to persistent defaults and breaches, including arrears and asset coverage requirements. The late payment fees were not contractually entitled but were imposed as a condition of forbearance, with ambiguous acceptance by Skyjets. Lombard did not breach its duties as mortgagee in the sale of the Aircraft. Skyjets' and Skytime's counterclaims for damages fail.

Citation
[2022] EWHC 728 (QB)
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 Claim and Part 20 Proceedings / Final Judgment After Trial
Outcome
Claim allowed in part; counterclaim dismissed
Legal Topics
Secured Lending, Loan Agreement Termination, Mortgage Enforcement, Breach of Contract, Conversion, Duties of Mortgagee, Damages Assessment
Commercial Law Banking and Finance Contract 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 Claim and Part 20 Proceedings / Final Judgment After Trial

Legal Issues

  1. 1 Whether Lombard validly terminated the Loan Agreement
  2. 2 Whether Lombard breached duties as mortgagee in sale of Aircraft
  3. 3 Entitlement to late payment fees

Ratio Decidendi

Lombard validly terminated the Loan Agreement due to persistent defaults and breaches, including arrears and asset coverage requirements. The late payment fees were not contractually entitled but were imposed as a condition of forbearance, with ambiguous acceptance by Skyjets. Lombard did not breach its duties as mortgagee in the sale of the Aircraft. Skyjets' and Skytime's counterclaims for damages fail.

Court Disposition

Claim allowed in part; counterclaim dismissed

Orders

  • Lombard entitled to recover outstanding loan balance less any sums already paid
  • Skyjets and Skytime's counterclaims for damages dismissed