DLA Piper focuses on Olympic Airlines SA v ACG Acquisition XX LLC

On 17 April 2013, the English Court of Appeal gave judgment in favour of Aviation Capital Group (ACG) as respondent in an appeal filed by Olympic Airlines (Olympic) against the English Commercial Court judgment (ACG Acquisition XX LLC v Olympic Airlines SA (in special liquidation) [2012] EWHC 1070 (Comm)), that we reported on in April 2012.

This is a case which has attracted considerable attention in the multibillion dollar commercial aircraft leasing industry and has been closely followed by financiers, lessor and airlines alike. The unanimous Court of Appeal judgment has been welcomed by many participants in the industry as reinforcing confidence that contractual mechanisms for risk allocation in English law governed lease documentation by way of “hell or high water”, “as is where is” or “conclusive proof” provisions will be interpreted and enforced by the English courts on a sensible, pragmatic and commercial basis and in line with how lessors and financiers had always intended them to operate.

By way of brief re-cap, the case concerned the delivery and acceptance (following pre-delivery inspections carried out by Olympic and the Greek aviation authority) of a 17 year old Boeing 737-800 aircraft on a five year lease from ACG to Olympic in August 2008. Following acceptance on lease by Olympic, the aircraft was grounded after two weeks in service when, amongst other defects, broken cables that controlled the spoilers on one wing were discovered and the airworthiness certificate for the aircraft was withdrawn…

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