By Staff Writer
The Samoa Airways aircraft lease is moving into a new chapter that risks heavy legal costs added to the financial burden already on the country’s shoulders, if Government decides to ‘ terminate the lease’ and ‘negotiate a favourable exit from the Lease.’
Fly Aircraft Holdings Eighteen Limited that leased the Boeing 737-800 aircraft to Samoa Airways is ‘deeply concerned with the soundness’ of the options Government is advised with by a local lawyers firm.
The Ireland based company has written to the Attorney General, Su’a Helene Wallwork-Lamb, to reject fully the “legal advice that appears to have been given by Latu Lawyers to advise the Samoan Government that :
- Samoa Airways has the power to terminate the Lease and return the Aircraft to the Lessor, and
- Government/Samoa Airways may seek to “negotiate a favourable exit from the Lease” based on the recent change in Government.”
Newsline Samoa received a copy of the company letter to the Attorney General that appears to have been widely circulated electronically in the local community and its rejection of the advice by Latu Lawyers that reads:
“The Legal Opinion is wrong in basic matters of English law and fails to mention the fundamental obligations under the Lease, including that :
- Samoa Airways and Government have no rights to terminate the Lease once the Aircraft has been delivered;
- The Lessor has no obligations under the Lease of Guarantee to enter into negotiations with Samoa Airways or Government about termination or exit from the Lease: and
- A change of government does not release Samoa Airways or Government from their respective obligations under the Lease and Guarantee.
“In recommending to Government the termination of the Lease, Latu Lawyers have embarked on an extensive financial assessment of Samoa Airways business case and the Lease termination costs.
“These financial opinions are matter that Latu Lawyers would appear to be wholly unqualified to make.
“The Lessor entered into binding commercial contracts with Samoa Airways and Government in respect of the Aircraft and it has complied with its obligations in full. It is now suffering considerable losses due to the ongoing failures of Samoa Airways to comply with its payment obligations and the Government’s apparent repudiation and rejection of the Guarantee and the Aircraft Lease.
“The Lessor’s substantial losses are continuing to accrue and in the absence of an urgent negotiated settlement, the Lessor will have no option but to pursue all available legal remedies to protect its position.”
The signed letter by the company director went on to urge Attorney General Su’a to “urgently obtain specialist legal and financial advice on the consequences of breach of the Lease and Guarantee from English counsel with expertise in aviation law and finance.”
Su’a was further urged to “ensure that Government receives current legal and financial advice so that it can make informed decisions before matters become irretrievable.”
The company suggested a joint agreement with Government in “instructing a senior and reputed English ‘Queens Counsel’ barrister to provide an independent written legal opinion to the parties on the Lease and Guarantee.”
The company letter was copied to the Prime Minister, Fiame Naomi Mataafa and the CEO of the Samoa Airways, Seiuli Alvin Tuala, with a response expected within 7 days from the date it was received.