Aercap Partners 1 Ltd v Avia Asset Management AB

Aercap Partners 1 Ltd v Avia Asset Management AB

Avia was in repudiatory and renunciatory breach of the Agreement by failing to pay the third deposit. There was no binding variation (Dublin Agreement) excusing this obligation. The Engines were not 'specific goods' and, in any event, AerCap could have delivered them if required. Damages are not to be discounted for 'loss of a chance' as AerCap proved, on the balance of probabilities, it could have performed. AerCap is entitled to damages for loss of bargain (difference between contract and resale price), storage and insurance costs, and compensation under clause 5. The counterclaim fails.

Parties
Claimant: Aercap Partners 1 Limited; Defendant: Avia Asset Management AB
Jurisdiction
England and Wales
Judgment Date
07 October 2010
Procedural Posture
Commercial Contract Dispute / Judgment After Full Trial
Outcome
Claim allowed; counterclaim dismissed
Legal Topics
Repudiatory Breach, Damages Assessment, Variation of Contract, Mitigation of Loss, Specific Goods, Loss of a Chance, Interpretation of Contractual Clauses
Contract Law Commercial Law Sale of Goods Repudiatory Breach Damages Assessment Variation of Contract Mitigation of Loss Specific Goods +2 more

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Parties

Aercap Partners 1 Limited

Claimant

Avia Asset Management AB

Defendant

Procedural Posture

Commercial Contract Dispute / Judgment After Full Trial

Legal Issues

  1. 1 Whether Avia was in repudiatory and/or renunciatory breach of the Aircraft Sale and Purchase Agreement
  2. 2 Whether AerCap was entitled to treat the Agreement as terminated
  3. 3 Whether there was a binding variation (the 'Dublin Agreement') affecting Avia's obligation to pay the third deposit

Ratio Decidendi

Avia was in repudiatory and renunciatory breach of the Agreement by failing to pay the third deposit. There was no binding variation (Dublin Agreement) excusing this obligation. The Engines were not 'specific goods' and, in any event, AerCap could have delivered them if required. Damages are not to be discounted for 'loss of a chance' as AerCap proved, on the balance of probabilities, it could have performed. AerCap is entitled to damages for loss of bargain (difference between contract and resale price), storage and insurance costs, and compensation under clause 5. The counterclaim fails.

Court Disposition

Claim allowed; counterclaim dismissed

Orders

  • Judgment for AerCap for US$7,432,246.60 (including damages for loss of bargain, storage and insurance, and clause 5 compensation)
  • Counterclaim by Avia dismissed