US court rejects Lithuanian company’s claim against Tajik national air carrier

2 months ago tngadmin Comments Off on US court rejects Lithuanian company’s claim against Tajik national air carrier

The United States Court of Appeals for the District of Columbia Circuit noted on June 17, 2022 that the district court granted the motion, ruling that it lacked personal jurisdiction over Tajik Air under the Fifth Amendment’s Due Process Clause.

UAB Skyroad Leasing (Skyroad), a Lithuanian company, seeks to enforce an arbitral award against OJSC Tajik Air (“Tajik Air”), an airline wholly owned by the Republic of Tajikistan.

The Vilnius Court of Commercial Arbitration issued a final award in Skyroad’s favor, which was affirmed by the Court of Appeal of Lithuania. Tajik Air has not yet paid the arbitral award, and Skyroad filed a petition to enforce the award in the district court pursuant to the Federal Arbitration Act, 9 U.S.C. § 207.

Tajik Air moved to dismiss for improper service of process and lack of personal jurisdiction. The district court granted the motion, ruling that it lacked personal jurisdiction over Tajik Air under the Fifth Amendment’s Due Process Clause.

Recall, Tajik Air in September 2009 entered into two identical lease agreements with a Lithuanian company called AB Avia Asset Management for the lease of two Boeing aircraft. The agreements required Tajik Air to pay monthly rent of US$149,000 for each aircraft and to return the two aircraft at the end of the 60-month lease period. On November 2, 2010, AB Avia Asset Management transferred all rights and obligations under the lease agreements to UAB AviaAM B03, which later became UAB Skyroad Leasing.

In 2013, after Tajik Air started falling behind on the monthly lease payments, Skyroad initiated arbitration proceedings pursuant to the agreements, resulting in an award of $2,824,000 plus interest. When Tajik Air remained delinquent on payments and failed to return the aircraft at the end of the leases, Skyroad initiated a second arbitration proceeding with the Vilnius Commercial Arbitration Court (VCCA) tribunal on September 5, 2017, whose ultimate award is the subject of this action.

After the Lithuanian court's decision, an appeal by the airline was rejected. On top of the USD20 million, the court demanded USD84,000 from the airline in legal costs.

The only state-owned aviation company in Tajikistan, Tajik Air has been experiencing economic difficulties for years.

Source: Asia-Plus