Finejet Limited v Five Forty Aviation Limited; Avmax Aircraft Leasing Inc & Kenya Airports Authority (Objector); Nairobi Connection Services Auctioneers (Auctioneer) [2025] KEHC 149 (KLR)

Finejet Limited v Five Forty Aviation Limited; Avmax Aircraft Leasing Inc & Kenya Airports Authority (Objector); Nairobi Connection Services Auctioneers (Auctioneer) (Commercial Case 331 of 2011) [2025] KEHC 149 (KLR) (Commercial and Tax) (16 January 2025) (Ruling)

Neutral citation: [2025] KEHC 149 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts)

Commercial and Tax

Commercial Case 331 of 2011

JWW Mong'are, J

January 16, 2025

Between

Finejet Limited

Plaintiff

and

Five Forty Aviation Limited

Defendant

and

Avmax Aircraft Leasing Inc & Kenya Airports Authority

Objector

and

Nairobi Connection Services Auctioneers

Auctioneer

Ruling

Introduction and Background 1. The court is being called upon to determine three applications; Avmax Aircraft Leasing Inc.’s (“Avmax”) Notice of Motion dated 14th November 2023, Nairobi Connection Services Auctioneers’ (“the Auctioneer”) Notice of Motion dated 26th January 2024 and the Kenya Airport Authority’s (“KAA”) Notice of Motion dated 26th February 2024. Avmax’s application seeks a declaration that the aircrafts bearing the registration numbers 5Y-BXB DHC-8-102 Serial No. 213; 5Y-BUZ DHC-8-102 Serial No. 253; 5Y-CGL DHC-8-202 Serial No. 426; 5Y-RJS DHC-8-311 Serial No. 250; 5Y-BXD CL35 Serial No. 7042; and 5Y-BXC CL-600-2B19 Serial No. 7184 (“the Aircrafts”) are registered to and owned by Avmax and that the attachments of the Aircrafts should be lifted and a stay of execution against it be granted. This application is opposed by the Plaintiff (“Fine Jet”) through the replying affidavit of its director, John Kimani sworn on 29th November 2023.

2. The Auctioneer’s application seeks an order to KAA for them to let its Auctioneer with his client’s access to view the Aircrafts registration number 5Y-BXC Bombardier CRJ and 5Y-RJS DHC-8-300 at Wilson Airport remote section for the purpose of making proper judgment on what the Auctioneer is selling and for the purchaser. That, if need be, the officer commanding Langata Police Station or an officer in the rank of inspector to accompany the Auctioneer for the purpose of maintaining law and order. This application is opposed by KAA through its application dated 26th February 2024 and the supporting affidavit filed in respect of the said application and sworn on the same date by MARGARET MUNENE, KAA’s Legal Counsel.

3. KAA’s application seeks to prohibit the Auctioneer from proclaiming, attaching, taking possession of, selling whether by public auction or otherwise, and in any other way interfering with the Defendant’s (“Five Forty”) property held by KAA, including but not limited to the Aircrafts, until payment in full of the landing and parking fees and the domestic air passenger service charges owed by Five Forty to KAA in relation to the Aircrafts. This application is opposed by Fine Jet through the replying affidavit of its Director, JOHN KIMANI sworn on 5th August 2024. The court directed that the applications be disposed by way of written submissions, some of which are on record and which I shall not highlight but make relevant references to in my analysis and determination later on.

Avmax’s Application:- 4. Avmax states that it specializes in timely and cost-effective aircraft sales and leasing solutions and that as the world’s largest lessor of Bombardier Dash-8/Q Series and CRJ Series aircraft, it has an extensive fleet that includes RJ SE (VIP Conversions), CRJ Corporate Shuttle, and CRJ Package Freight options. It avers that on 2nd August 2021, Fine Jet obtained Warrants of Attachment in respect of the Aircrafts pursuant to a Decree extracted from the Judgment in this suit(“the Warrants”). On 19th August 2021, East Africa Safaris Air Limited, the then Objector, filed an Objection in respect of the Warrants in which it asserted that the Aircrafts were leased from the Avmax and that Five Forty was not the registered owner. On 4th September 2023, the court ruled that the then Objector had failed to demonstrate that the Aircrafts did not belong to Five Forty and the Warrants remained in force.

5. Avmax contends that Fine Jet, as the decree holder, has always been aware of the Warrants and the impending public auction but failed to disclose this information to Avmax, which information would have enabled Avmax to file the requisite Objection proceedings seeking to lift the Warrants. On 13th September 2023, Fine Jet issued the Auctioneer with the Warrants to notify Five Forty that the Movable Properties Described in the Schedule attached thereto shall be attached and left in the Auctioneer’s custody for 7 days from 4th October 2023 on the lapse of which, the attached property was to be sold by the public auction unless the amount due together with costs of the attachment was in the then meantime settled. That the Schedule of Movable Property listed but failed to identify the following Aircrafts correctly, for want of either type or serial number of the aircraftsa.5Y CGLb.(b) 5Y-BXC (CRJ)c.5Y-BUZ (Dash 8);d.5Y-RJS

6. On 23rd. October 2023, the Auctioneers placed or caused to be placed in the local dailies the Public Auction advertisement of even date where it was disclosed that the Public Auction was to be conducted on 31st October 2023 at the Auctioneer’s offices at 1100Hrs. However, Avmax states that yet again, the Aircrafts thereto were improperly identified. In any event, Axmax notified the public through a local daily that the Aircrafts elucidated thereto belonged to it, and since Avmax were not enjoined as parties to this suit, the intended auction was illegal and devoid of consent. Further, that by way of anticipatory notice, Avmax notified the public that the Aircrafts listed thereto belonged to it. In short, Avmax contends that the Auctioneer proclaimed and shall illegally sell six aircrafts registered under Avmax by public auction and it notes that it is the registered owner of the Aircrafts and it was not a party to this suit. Avmax adds that Five Forty failed to disclose the instant suit and the Warrants to it, that Avmax does not owe Fine Jet or Five Forty any money, that Five Forty has never been the registered owner of the aircrafts and that some the Lease Agreements concerning the Aircrafts had terminated on various dates. Avmax states that Fine Jet disregarded the aforementioned facts and obtained the Warrants against the Aircrafts.

7. Avmax states that given the facts outlined above, the impending public auction should be stayed lest Avmax suffers irreparable harm by losing its Aircrafts, goodwill, and business on account of an illegal attachment and the intended sale by public auction. That the order of stay of execution of proceedings sought in this application will not cause any harm, damage or prejudice to Fine Jet and that the application has been made without unreasonable delay and in the interests of substantive justice. In any case, Avmax states that the Aircrafts are not only its properties but tools of trade as envisioned under section 44 of the Civil Procedure Act(Chapter 21 of the Laws of Kenya) and that the advert is contrary to the immutable Rule 16(1)(d) of the Auctioneers Rules, 1997, to the extent that the Aircrafts are not accurately described.

Fine Jet’s Reply:- 8. Fine Jet depones that Avmax and another had filed objection applications seeking that the Aircrafts be discharged from the Warrants but the court, in a ruling issued on 3rd October 2023 held that it was functus officio having rendered a ruling over the same subject matter and that the parties therein could only appeal the decision. That Avmax and the other party have since evinced their intention to appeal but that Avmax have instructed a different firm of advocates to move the very same court over the very same application and seeking the very same prayers. Fine Jet states that the present application is similar to one filed on 19th August 2021 and that the court has already pronounced itself on the same and that the rulings have not been set aside or reviewed. Fine Jet contends that this application is an attempt of an appeal against the rulings of 4th September 2023 and 3rd October 2023 by the same party in the same court and is therefore untenable and should be dismissed with costs.

The Auctioneer’s Application:- 9. The Auctioneer states that he received the Warrants from the court to execute against Five Forty the decretal sum of USD 1,259,726. 15 and Kshs. 4,500/= and on 4th October 2023 he proceeded to Five Forty’s premises and proclaimed the Aircrafts. That on 12th October 2023 after the expiry of the 7 days proclamation notice, he proceeded to Wilson Airport’s remote section and issued a notification of sale for the same to be sold by public auction. However, the Auctioneer claims that his efforts to access the Aircrafts have not been successful for the reason that KAA has refused him entry into the said Wilson Airport remote section where the Aircrafts are stationed. As such, he seeks the help of the court to grant authority to the Officer Commanding Lang’ata Police Station or any of his officers with the rank of inspector to accompany the Auctioneer or his agent to provide security and maintain law and order.

KAA’s Reply and Application:- 10. KAA contends that Five Forty is indebted to it in relation to the Aircrafts in the sum of USD 110,407. 07 and Kshs. 75,825, and USD 171,831. 66 and Kshs.427,200/- and as such, it has a legal and equitable interest over the Defendant’s property, particularly the Aircrafts. It states that it has a right to the payment of Five Forty’s outstanding indebtedness to it in full before the Aircrafts can be taken from its possession and sold in execution of a decree. That unless the Warrants are lifted, the Auctioneer will proceed to sell the Aircrafts to the detriment of KAA and such an eventuality will greatly prejudice it as it will in effect render KAA incapable of exercising its right of lien in recovery of the debt.

Fine Jet’s Reply:- 11. In response to KAA’s application, Fine Jet avers that KAA has not demonstrated that it has either a legal or equitable interest over the Aircrafts and that it has merely instituted the objection proceedings on the basis of Five Forty’s outstanding indebtedness to it hence engaging itself in an abuse and misuse of the court process. That the nature of the orders sought by KAA entails a commercial dispute and therefore, it ought to have instituted a commercial suit against Five forty to claim for the outstanding landing and parking fees. Fine Jet maintains that it is entitled to attach and sell any of Five Forty’s properties pursuant to the provisions of section 38 and 44(1) of the Civil Procedure Act together with Order 22 Rule 6 and 18(2) and(3) of the Civil Procedure Rules. That KAA has recognized that Five Forty is the owner of the Aircrafts hence the legal and equitable interest in the same is with Five Forty and not KAA. Fine Jet reiterates that the court has already determined that Aircrafts are available for attachment in satisfaction of the judgement debt and as such prays that KAA’s application be dismissed with costs.

Analysis and Determination:- 12. I have carefully gone through the various applications, rival depositions and the written submissions of the parties. To my mind, the main issue for the court’s determination that will dispose of the applications is whether the Warrants ought to be lifted and execution against Five Forty stayed. As deponed by Fine Jet, the court has already made a finding on Avmax’s claim of ownership of the Aircrafts based on letters from the Kenya Civil Aviation Authority. In the ruling of 4th September 2023, the court at para. 9 held as follows:-“They have exhibited letters from the Kenya Civil Aviation Authority that make reference to a lease agreement for each of the Aircrafts. Both Aircrafts are alleged to belong to a Canadian company known as Avmax Aircraft Leasing Company. Like all motorable vessels, Aircrafts are registrable chattels and there must exist a form of record keeping indicating the details of ownership of each Aircraft for identification and licensing…”

13. Avmax have relied on the same letters from Kenya Civil Aviation Authority to claim ownership but they have not exhibited any document including Certificates of Registration of the Aircrafts as proof of ownership. The court reiterates its previous position that unless actual documents of ownership are presented, it will be presumed that the Aircrafts belong to Five Forty and are available for attachment in satisfaction of the judgment debt. In any event, the court, in its ruling of 3rd October 2023 rejected a similar application by Avmax and another, having already ruled over the same subject matter. I therefore decline to lift the Warrants and stay the execution based on Avmax’s contention that it is the owner of the Aircrafts as it has not exhibited actual proof of ownership and the court had previously ruled on the same and is now functus officio on the matter.

14. Turning to KAA’s application, it avers that it has a right of lien over the Aircrafts by dint of landing and parking debts owed to it by Five Forty. To support its claim, it has attached schedules indicating the various sums in debt. However, I find that schedules have no evidential value and that it would have been helpful for KAA to produce primary documents such as invoices or documents from Five Forty acknowledging and proving the debt. Schedules alone cannot be sufficient for KAA to claim a legal and equitable interest over the Aircrafts which I have found, belong to Five Forty. Thus, I am in agreement with Fine Jet’s averment that it is Five Forty, and not KAA that has a legal and equitable interest over the Aircrafts. As Fine Jet holds a valid decree, it is entitled to attach and execute against any property belonging to Five Forty, including the Aircrafts.

15. As both Avmax’s and KAA’s applications have failed, the natural consequence is that the Auctioneer’s application should be allowed and he should be granted access by KAA to view the Aircrafts at Wilson Airport’s remote section and proceed with the execution of the decree.

Conclusion and Disposition:- 16. The upshot of the above findings is that the court makes the following dispositive orders:-a.The applications dated November 14, 2023 and February 26, 2024 are dismissed.b.The application dated January 26, 2024 is allowed.c.An order be and is hereby issued to the Kenya Airport Authority to let Timothy Otieno Awuor, a Licensed Auctioneer with his/her Clients access to view aircraft registration numbers 5Y-BXC Bombardier CRJ and 5Y RJS DHC-8-300 at Wilson Airport’s Remote Section for the purpose of making proper judgment on what the Auctioneer is selling and for the purchaser.d.The Officer Commanding Langata Police Station or an officer in the rank of inspector do hereby accompany the Auctioneer for purposes of maintaining law and order.e.The costs of all the applications shall be borne by KAA and Avmax jointly and severally and the said costs are payable to the Plaintiff and the Auctioneer upon taxation by the court.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 16TH DAY OF JANUARY 2025J.W.W. MONG’AREJUDGEIn the Presence of:-Mr. Muganda for the Plaintiff.Ms. Wangongu and Mr. Tugee for the Objector- KAA.Mr. Kipruto holding brief for Mr Lagat 2nd Objector for the Applicant.No appearance for the Respondent.Amos - Court Assistant