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Amidst reports of takeover talks, Arik sues Ethiopian Airlines, Nigerian govt

KPMG uncovers N20.5bn hidden debts in Arik Airline's books

Following reports of an ongoing negotiation process for a possible takeover, Arik Air has filed a N20 billion suit against the Nigerian government and Ethiopian Airlines.

The suit which was instituted at the Federal High Court, Lagos against Ethiopian Airlines, the Federal Ministry of Transportation, and the Attorney General of the Federation, was filed by Arik’s counsel, Babajide Koku (SAN).

Ethiopian Airlines had recently disclosed that it had tabled a bid to the Nigerian government to acquire Arik Air.

But the Asset Management Corporation of Nigeria (AMCON), under whose management Arik Air currently is over reported debt default, had said in its response that it had no knowledge of the development.

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In its statement of claim supported by a 20 paragraph affidavit deposed to by a director of Arik Air, Chris Ndulue, the plaintiff asked the court to restrain the first and second defendants from further negotiations on its takeover.

The plaintiff noted that AMCON had taken over the airline on February 8 which was challenged by its management via two suits already pending before the Federal High Court, Lagos.

According to the plaintiff, the outcome of the suits, numbered FHC/L/CS/827/17 and FHC/L/CS/826/17, would be rendered futile by the defendants’ negotiations.

“The plaintiff avers that the agreement of the second defendant with the first defendant will be wide ranging and intricately affect every aspect of the plaintiff herein, including but not limited to the day to day running technical as well as financial management which will affect the plaintiff as being the largest domestic and regional airline in Nigeria.

“The plaintiff further avers that the action taken by the first and second defendants will have a negative effect on the country’s image as the plaintiff being the largest airline will be pawned over to another country for management,” it said.

It also averred that the negotiations had caused undue hardship and irreparable damage to the Arik Air brand and ongoing investment discussions, as well as unbearable distress to the airline’s shareholders and directors.

It therefore asked the court to declare the negotiations null and void because the Ministry of Transportation had no power to transfer the management of the airline to Ethiopian Airlines while the suits over the takeover were pending.

The plaintiff also asked the court for an order directing the Attorney General of the Federation to ensure the investigation of Ethiopian Airlines by the appropriate authorities for inducing and interfering in the administration of justice in the pending suits.

It added that if found culpable, the airline should be charged to court for criminal contempt contrary to Section 133 (4) and (9) of the Criminal Code Laws of Lagos State, Cap C17,Laws of Lagos State of Nigeria, 2004.

Arik also asked the court for an order compelling the Inspector General of Police to investigate the actions of the second defendant.

It further asked the court for N20 billion punitive damages against the first defendant for inducing or partaking in the interference of the rights of the plaintiff and the administration of justice.

 

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