Kingfisher Airlines owes Bank of Scotland $21.6 million in overdue lease payments for 10 ATR 72-500s, the UK High Court has ruled.
Bank of Scotland had brought the action on behalf of a consortium of lenders against Kingfisher's parent company, United Breweries Holdings, which had guaranteed the airline's obligations.
In his 13 January judgement, Mr Justice Eder said: "I am satisfied that the amounts claimed are due and owing and that therefore in those circumstances the claimants are entitled to summary judgment in the sum claimed, that is $21,589,972.56."
He said he saw "no other good reason" why the matter should not proceed to trial. The judgement paves the way for a potential action in India, or elsewhere, as it enables Bank of Scotland to pursue United Breweries Holdings' assets to recover the outstanding sum.
Dependent on the location of those assets, interaction with the local jurisdiction may well be required.
Bank of Scotland, as the security trustee for a group of syndicated lenders, funded KF Turbo Leasing, a special purpose vehicle incorporated in the Cayman Islands that purchased the ATR aircraft.
Each aircraft was leased then by KF Turbo leasing, for a term of ten years beginning on the delivery of that aircraft, to Kingfisher, according to UK documents.
Both parties entered into the agreement on 29 March, 2007.