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MiG vs Tupolev dispute over $9 mln to be reconsidered

16:56 22/02/2012

MOSCOW, February 22 - RAPSI. Ninth Commercial Court of Appeals will reconsider on March 20 MiG-Finance's lawsuit against Tupolev to collect $9.2 million in debt under a loan agreement.

The court will also hear Tupolev's counterclaim to terminate their 2010 investment agreement.

The court has satisfied Tupolev's appeal and reversed the trial court's judgment awarding MiG-Finance 192.9 million rubles ($6.5 million).

The lawsuit is based on a loan provided by the MiG Russian aircraft construction corporation to Tupolev. Later the claims were assigned to MiG-Finance.

The parties entered into a contract on November 19, 2001 whereby MiG was to issue a loan as an investment into Tupolev to prepare Tu-334 aircraft for certification.

The loan amounted to $15 million. Tupolev and MiG also agreed that MiG obtains the right to manufacture Tu-334 aircraft. Tupolev committed to repay the loan in installments equal to 1 percent of the price of each Tu-334 aircraft sold by MiG.

The parties also agreed that the contract will be considered annulled if the government deprives MiG of the right to produce the aircraft.

MiG maintains that the contract must be considered terminated as the government transferred the production rights to the S.P.Gorbunov Kazan Aviation Production Association on April 15, 2005.

However, Tupolev argued that MiG exercised its right to cancel the contract only 4.5 years later, thereby increasing the interest amount. Tupolev also maintains that the government decision should not be considered a termination event.

Tupolev's core business is the development of Tu-204/214 and Тu-334 aircrafts. It also designs Tu-330 cargo aircraft. The company is also considering upgrading long-range and naval aircraft. The United Aircraft-Building Corporation owns a 95.52-percent interest in Tupolev.

The MiG Aircraft Corporation is an aircraft industry leader and the Defense Ministry's primary contractor. The company manufactures fighters and interceptors, multi-purpose combat aircraft, and light general-purpose planes for the Russian armed forces and for export.

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MiG vs Tupolev dispute over $9 mln to be reconsidered

16:56 22/02/2012 Ninth Commercial Court of Appeals will reconsider on March 20 MiG-Finance's lawsuit against Tupolev to collect $9.2 million in debt under a loan agreement.
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