R (on the application of Global Knafaim Leasing Ltd and another) v. Civil Aviation Authority and another
An aircraft leasing company, Global Knafaim Leasing Ltd (“GKL”) leased an aircraft to Zoom Inc (“Zoom”), a Canadian airline. In August 2008 Zoom fell into financial difficulties and soon after went into liquidation. On 28 August 2008, the aircraft leased to Zoom was detained at Glasgow airport by BAA due to Zoom’s failure to pay airport charges due to BAA and “route charges” required to be paid to enable Eurocontrol and NATS to perform their respective functions.
For the aircraft to be released, GKL were required to pay not only the outstanding charges attributable to their aircraft, but also those due by all other aircraft in Zoom’s fleet. GKL argued, relying on Article 1 of the First Protocol to the European Convention on Human Rights (“A1P1”) that such a demand was unfair and unlawful.
The Court dismissed the application holding that the fleet lien power was not prohibited by any international or European convention or instrument and there was no evidence that disapproved or rendered unlawful the fleet lien power granted in the UK. The Court further provided that the power did not contravene the Owner’s A1P1 rights and did not fall foul of competition law. The case suggests the onus is on the lessor to carry out appropriate due diligence in respect of its Aircraft on lease, in order to assess the risk of detention and ultimately application of the fleet lien.