Bird & Bird's aviation team win case against General Electric in major aviation dispute

14 August 2013

A team of aviation lawyers from Bird & Bird have secured a landmark victory representing Alpstream against two divisions of US giant General Electric:  aircraft financier PK AirFinance and aircraft leasing company GECAS.  The judgement, which was recently announced, rules that PK and GECAS had knowingly conspired against the Claimants to cause them loss by unlawful means, and deprived Alpstream, a company owned by Alexander Lebedev, of millions of dollars.

The Judge also found that PK had breached its duties as mortgagee; that GECAS had knowingly procured this breach and, that PK and GECAS personnel who gave evidence lied on oath.  He awarded the Claimant over US$10m in damages, plus interests and costs, totalling up to $17 million - making the case one of the biggest aviation litigations in recent years.

The case dates back to 2010 when as a result of Alpstream falling into financial difficulties PK AirFinance repossessed the planes it had financed for Mr Lebedev's German Blue Wings airline. Despite being obliged by the duty of care to sell them at the highest possible price, PK AirFinance effectively sold them to itself at a staged auction described by the judge as "something of a charade".  Subsequently, the jets were leased at a discounted price in an already arranged deal to US Airline JetBlue, one of GE's biggest customers. The Claimant was also charged with the cost of refurbishing the planes to meet JetBlue's delivery criteria - at a hefty cost of $9m per aircraft. 

Robin Springthorpe, partner, Bird & Bird said: "It is extremely satisfying to obtain a good result for the client in what was, in the face of very determined resistance from the Defendants' lawyers, an intensely challenging case. Our clients suspected that there was wrong-doing, but they had little information and no documentation or factual witnesses. We built the whole case from documents which we forced the Defendants to disclose and cross-examination of their witnesses."

Alpstream was advised by lead partner Robin Springthorpe and associates Sarah Weindling, Simon de Broise, Stuart McGinn, Jack Colthurst, Caroline Francis and Tobi Okeowo.

View the judgement