New Delhi, Nov 29: Air India, already facing a financial crisis, has been asked by the London Court of International Arbitration (lica) to pay $23.4 million (Rs 90 crore) as damages to Carbijet for unlawfully terminating the wetlease of three aircraft in 1996.The interim order was given last week, and under British laws there is no likelihood for an appeal by Air India, official sources said here on Monday. The Government and Air India are keeping their fingers crossed hoping that the final order by LICA will have something in their favour.
Air India had wetleased two L1011 and one A310 aircraft from Caribjet in December, 1995 and January, 1996, but the contract was cancelled in September, 1996, on the grounds that Carbijet had violated the safety requirements of the Directorate General of Civil Aviation. Concern was also voiced by DGCA and other authorities of the safety of operations of Carbijet. Caribjet claimed damages of $80.6 million for the termination of the contract whereas Air India made acounter claim of $136 million towards loss of future profits and market share.
Sources said when the case was registered with LICA, a three-member committee was constituted by the then managing director to prepare a case to plead before the court. But later this committee was replaced, a move questioned by the Government. Also, top officials of AI had not appeared before LICA, sources said. Caribjet based their argument on the statement by a senior Air India official that the airline's financial health was not good.
The West Indies-based leasing company had contested that there had been no flight safety violations by it and Air India had terminated the contract because of financial and commercial considerations. Air India had also not contested the arguments made by Caribjet, the sources claimed.
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