Nigeria's Airspace Management Agency (NAMA) has suspended operations of Arik Airline over a $2.5 million debt owed to Atlas Petroleum International Ltd.
The development was disclosed in a statement issued on Tuesday by NAMA's director of public affairs and consumer protection, Abdullahi Musa.
According to the statement, the decision complies with a court ruling on the debt case.
“On 19 July 2024, the enforcement department of the High Court of the FCT enforced an order issued by the court in respect of a debt of $2.5 million owed by Arik Airline to Atlas Petroleum International Ltd by seizing its aircraft,” NAMA said.
He said the court also gave Arik a notice of a public auction of the planes scheduled for July 26 if he fails to pay the court debt.
“All these were brought to the notice of our agency and also to the notice of our supervising minister, the minister of aviation. Records show that on March 8, 2016, the Judgment Debtor (ARIK) appealed the decision of the Lagos State High Court in passing judgment against him to the Court of Appeal and on September 30, 2021, the appeal was dismissed by the Court of Appeal in a unanimous decision with costs,” NAMA said.
According to the statement, Arik again appealed to the Supreme Court for permission to appeal the appellate court's decision and on January 9, the Supreme Court issued its ruling dismissing Arik's application for permission to appeal.
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NAMA explained that the judgment was recorded at the FCT High Court and that on June 26, Justice OA Adeniyi, then sitting in Court 8, Maitama in Abuja, issued an order after hearing the motion (No: M/9785/2024) filed on behalf of Atlas Petroleum.
“…seizing all personal property belonging to the Judgment Debtor, including the Judgment Debtor’s aircraft with Registration No. B737-700/ 5N-MJF, B737-800/ 5N-MJQ, DASH8-Q400 and 5N-BKX, in satisfaction of the judgment debt,” reads part of the statement.
NAMA explained that copies of the court order and the Certificate of Judgment were provided to them and the Minister of Aviation, but that Arik obtained an ex parte order stopping the execution of the court judgment even though the ex parte order had not been formally served on them.
“In these circumstances, since the first enforcement was carried out by seizure of the aircraft, subsequent enforcement by sale may be halted while the parties return to court to resolve the issues,” NAMA said.
“However, in order to preserve the subject matter of the present dispute, which is the aircraft in question (the res), which have already been seized, we have decided to comply with the effect of the Supreme Court order, immobilizing the aircraft (subject matter of the dispute) so that they are not removed from the jurisdiction of the court or manipulated in a manner that frustrates the courts.”
The agency also said Aviation Minister Festus Keyamo, being a senior advocate, understands the implications of the Supreme Court order dismissing the motion for leave to appeal.
“The Minister will not risk his license as a lawyer or his privilege as Senior Advocate of Nigeria by engaging in acts that frustrate an order of the Supreme Court of Nigeria,” NAMA added.
NAMA urged the disputing parties to resolve their issues as quickly as possible so that Arik aircraft can resume flight operations.
Arik airline reacts
On Tuesday, Arik CEO Roy Ilegbodu regretted that the decision was taken without prior notice or consultation, saying it has serious implications for the airline's passengers, its dedicated employees and the Nigerian economy.
“Our priority has always been to connect people and facilitate trade, especially on critical domestic routes. The suspension of flights by our fleet disrupts these vital services, leaving passengers stranded and increasing already high travel costs. This decision hurts ordinary Nigerians who rely on our flights for business, family and essential activities,” the official said.
He said the NAMA decision also ignored ongoing legal proceedings, explaining that a judgement was issued on 26 February 2016 in favour of Atlas Petroleum International Limited and Engineer Arthur Eze.
However, he explained that there is an ongoing case at the Federal High Court, where Asset Management Corporation of Nigeria (AMCON) is enforcing its secured interest in Arik's assets.
Despite this, Mr Ilegbodu said, a seizure order was issued against Arik's plane on 18 July.
“On July 25, 2024, the FCT High Court clearly directed all parties to maintain the status quo. We are therefore perplexed by the immobilization of our fleet, which is an overreach of the ongoing court proceedings and the court’s directives,” the official said.
“We believe this action undermines the rule of law and sets a dangerous precedent by prioritizing unsecured private interests over the public good and the rights of secured creditors. We are committed to following the legal process and have full confidence that the judiciary will resolve these matters fairly.”
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Mr. Ilegbodu said Arik Airlines has always been a proud partner in Nigeria’s growth by offering reliable and safe air travel. He urged the authorities to reconsider their decision.
“Please lift the grounding order and allow us to continue serving the public and supporting the economy. We stand by our passengers and employees during this difficult time and are working tirelessly to resolve this situation. We greatly appreciate your support and understanding.”
“We sincerely regret any inconvenience caused to our esteemed passengers,” he added.
Measures
Meanwhile, the Federal Airports Authority of Nigeria (FAAN), in a statement issued by Obiageli Orah, its Director of Public Affairs and Consumer Protection, said it has put in place proactive measures to assist stranded Arik Air passengers.
“This is to inform the public that the Federal Airports Authority of Nigeria (FAAN) is aware that Arik Airlines has been suspended due to litigation issues between the airline and its creditors,” FAAN said.
He said the authority has instructed all airport managers across the country to assist affected passengers while Arik Airline makes plans to rebook and transfer passengers to other available flights.
“For further information, please contact Arik Airline on the following numbers: 0700003592745, 02012799999. FAAN will continue to ensure the safety and comfort of all air passengers in Nigeria,” the statement read.
Similarly, the Nigerian Civil Aviation Authority (NCAA), in a statement by its spokesperson, Michael Achimugu, said it is aware of the grounding of Arik's aircraft due to legal issues and the impact this has on its flights and intended passengers.
“While the NCAA monitors the situation and informs Arik Air of its plans for affected passengers, our Consumer Protection Officers are available at the terminals to monitor passenger handling and provide information,” the NCAA said.
He said affected travelers can also approach the NCAA Consumer Protection offices or send an email to cpd@ncaa.gov.ng
“The NCAA stands in solidarity with all affected passengers and wishes to ensure that their rights as key stakeholders are protected,” Achimugu said.