The ongoing controversy over the recent announcement by Arik Air that JEM Leasing Limited, owners of the CRJ 1000 in its fleet registered as 5N-JEE and its financiers, Export Development Canada (EDC) have planned to sell the airplane has continued to generate chain of reactions.
In the latest reaction towards the controversy, the Export Development Canada (EDC) has warned the Economic Financial and Crime Commission (EFCC) to lay off its Mortgage Rights, the CRJ 1000 which it said the Nigeria’s crime commission is obstructing the owner from repossessing following a petition filed by Sir Johnson Arumemi, founder of Arik Air.
Based on this, some aviation observers are urgently calling upon the Nigerian state to protect the interests of international lenders, such as Export Development Canada (EDC), and other potential lenders closely monitoring the ongoing investigations by EFCC into the affairs of the Receiver Manager of Arik, as it relates to the enforcement of mortgage rights by EDC, in respect of the CRJ 1000 Aircraft owned by JEM Leasing.
The handling of this matter according to ED Canadian will significantly impact its decisions on whether to continue to invest in Nigeria’s fragile economy, in future.
In a document sighted by Safealtitude.com, EDC had declared: “Recent events surrounding the unjustified interference by the EFCC further to a petition by Sir Johnson Arumemi Ikhide, in respect of the sale of an aircraft by JEM Leasing Limited in cooperation with financing provided by EDC, have raised concerns about the interference faced by lenders and the potential repercussions for Nigeria’s economic fortunes.
“It is imperative for the Nigerian government to prioritize the preservation of investor’s confidence and provide a stable and supportive environment for international lenders.
“The spurious allegations and mis-narrations circulating in the public domain, particularly that the Receiver Manager of Arik has superintended over the stripping of the CRJ 1000 Aircraft, without the knowledge of the owner of the said Aircraft – JEM Leasing Limited, is untrue. It is crucial to establish the truth and hold accountable those responsible for disseminating false information.
“EDC, as a Crown Corporation wholly owned by the Government of Canada, plays a pivotal role in driving economic growth and development through investments in various projects worldwide. This episode superintended by the EFCC threatens not only future investments by EDC in Nigeria but also sends a discouraging message to other potential lenders considering investments in Nigeria.”.
Any attempt by the EFCC to continue with the investigations of the receiver manager may contradict the Cape Town Protocol Treaty which “creates international standards for registration of contracts of sale (including dedicated registration agencies), security interests (liens), leases and conditional sales contracts, and various legal remedies for default in financing agreements, including repossession and the effect of particular states”. .
The EFCC. Involvement may have its negative toll on the hitherto window being explored by the Nigerian Airlines under the Cape Town Convention to have seamless access to aircraft leasing and financing as the development may discourage international companies including the leasing companies from further transacting businesses with Nigerian carriers.
The primary aim of the Convention and the Protocol is to resolve the problem of obtaining certain and opposable rights to high-value aviation assets, namely airframes, aircraft engines and helicopters which, by their nature, have no fixed location.
This type of problem arises primarily from the fact that legal systems have different approaches to securities, title retention agreements and lease agreements, which creates uncertainty for lending institutions regarding the efficacy of their rights. This hampers the provision of financing for such aviation assets and increases the borrowing cost.
