Lebedev wins $10 million case in aircraft dispute with GE subsidiaries
MOSCOW, July 31 (RAPSI) - A company within NRC group controlled by Russian billionaire Alexander Lebedev won a $10 million victory against General Electric (GE) subsidiaries in London’s High Court Wednesday over a deal involving seven Airbus A320 planes. The presiding judge concluded that GE subsidiaries conspired to cause loss by unlawful means to Lebedev’s companies, the judgment obtained by RAPSI reads.
The case centered on aircrafts that were acquired by Lebedev-affiliated German airline Blue Wings and repossessed later by GE subsidiaries GE Capital Aviation Services Ltd (GECAS) and PK Airfinance Sarl (PK).
The transaction was described in the judgment as follows: “The six Blue Wings Aircraft were repossessed from Blue Wings in poor condition, in breach of their redelivery conditions, and were put by PK into effectively ‘good as new’ condition for the leases to JB, at a net cost, charged to the mortgage account, of $49m, and were purchased by PK at a price, credited to the mortgage account, of $146.8m, transferred to GECAS order on an inter-company basis, and leased to JB, where they still remain.”
Attorneys for the claimants alleged that PK had breached its duty as a mortgagee by failing to take reasonable steps to obtain the best possible value for the aircraft, and that there was a conspiracy between PK and GECAS to cause loss to one of the claimant companies – Alphastream – by unlawful means.
Presiding judge Mr. Justice Burton found the defendants liable for conspiracy, stating in the judgment: “The actions were primarily for the purpose of benefiting GECAS by acquiring the aircraft so that they could lease to JB as planned, but although that might have been the predominant purpose, there was, I am satisfied, deliberate loss, which both PK and GECAS knew and intended to be caused by the unlawful acts, not only to the Borrowers but, as I have found, to the residual beneficiary Alphastream. I find PK and GECAS liable for such conspiracy, to the relevant standard of proof.”
In terms of damages, Burton concluded: “I am satisfied that Alphastream suffered the loss of $10.175m calculated as set out in paragraph 124 above, which sum is recoverable against the Defendants and each of them, plus interest since May 2010.”
Burton criticized the witnesses called by the defense. Of PK’s witnesses, he explained in the text of the judgment, “I did not find them to be impressive witnesses.” Referring to the fact that GECAS Executive President Norm Liu had not been called as a witness, Burton noted: “This is strange,” asserting that Liu had played an important role in the deal and that he could have explained a great deal.
Lebedev made headlines earlier this month when he was convicted by a Moscow court for having punched Russian businessman Sergei Polonsky during the filming of an NTV talk show. He was sentenced to 150 hours of correctional labor, which he has since appealed.