Briefing

HQ: Aviation Quarterly Case Report

This is the Q2 2026 edition of our quarterly case report on English court judgments relating to the aviation industry. In this edition, we cover disputes relating to early termination agreements and aircraft management agreements, judicial review challenges on airport regulation, and several judgments on freezing injunctions and security for costs.

Repossessions – Early Termination Agreements

CIT Group Finance (Ireland) Unlimited Company (“CIT”) v SpiceJet Limited (“SpiceJet”) [2026] EWHC 1277 (Comm)

CIT and SpiceJet entered into lease agreements for two Boeing 737-8 MAX aircraft. From around 2023, SpiceJet fell into arrears and the parties agreed to the consensual return of the aircraft pursuant to two Early Termination Agreements (“ETAs”).

Under the terms of the ETAs, SpiceJet agreed to pay all outstanding amounts due under the lease agreements and to redeliver the aircraft on less stringent terms than under the lease agreements. The ETAs also contained a ‘snapback’ provision which, if exercised, had the effect of rendering the ETAs null and void if SpiceJet failed to comply with its obligations under the ETAs. Subsequently, SpiceJet defaulted on its payment obligations under the ETAs and CIT exercised the ‘snapback’ clause. CIT then issued proceedings and applied for summary judgment.

The Court upheld the meaning and effect of the ‘snapback’ clause. As to SpiceJet’s three defences to CIT’s summary judgment application, the Court found that:

whether the unpaid (and undisputed) sums were payable under the ETAs or the lease agreements made no difference to CIT’s entitlement to them; there was no need for a full trial to resolve that issue;
the wording “at the Lessor’s discretion” in the ‘snapback’ clause did not automatically impose a Braganza duty on CIT to exercise its termination right rationally and in good faith. In this case, there was no need to imply such a duty; and
the redelivery and acceptance certificates issued by CIT did not give rise to an estoppel or waiver preventing CIT from enforcing the redelivery conditions in the lease agreements.

This is the English court’s first decision on ETAs and it provides interesting and relevant guidance for these often-bespoke agreements. Our more detailed analysis on this case can be found here.

Aircraft management and maintenance agreements

Gama Aviation FZC v Bin Otaiba Investment Group [2026] EWHC 258 (Comm)

This case concerned claims for sums due under an aircraft management agreement between Gama Aviation FZC (“GAF”) and the Bin Otaiba Investment Group (“BOIG”) (the “Agreement”) in connection with scheduled maintenance inspections and parking charges. GAF also sought a declaration that it had validly exercised a lien over the aircraft and was entitled to sell it to recover amounts due. BOIG counterclaimed for losses resulting from the alleged unlawful detention of the aircraft. BOIG initially contested the claim but did not appear at the hearing (per ANMS Middle East).

The issues turned principally on the construction of the Agreement. The Court rejected BOIG’s primary defence that it had terminated the Agreement before certain invoices were issued, finding that the email purporting to give notice of termination did not satisfy the required conditions in the contract, nor did the parties agree that the email constituted valid termination. The Court also found that GAF was not required under the terms of the Agreement to obtain prior approval for the relevant maintenance works, the costs of which it was entitled to recover. In addition, the Court found that the parking / hangarage charges were “reasonable and in accordance with industry practice” – and therefore recoverable under the Agreement.

The Court made declarations that GAF was entitled to exercise a contractual lien over the aircraft, and that the Agreement permitted GAF to sell the aircraft if BOIG failed to pay all sums ordered by the Court within the time ordered for payment. Finally, the Court dismissed BOIG’s counterclaim, finding that the aircraft was not unlawfully detained by GAF in breach of the Agreement.

Airport regulation / judicial review

Oxford Aviation Services and Others v Civil Aviation Authority, Secretary of State for Defence and Secretary of State for Transport [2026] EWHC 1044 (Admin)

The operators of private airports at Oxford, Farnborough and Biggin Hill (the “Operators”) sought judicial review of the UK Civil Aviation Authority’s (“CAA”) decision not to withdraw or suspend its notification of RAF Northolt (“RAFN”) as available for use by civilian aircraft, or impose conditions on such use. The Operators alleged that the civilian use of RAFN was less strictly regulated than private airports and raised a number of safety concerns. The Secretaries of State for Transport and Defence were Interested Parties.

The Administrative Court ordered a “rolled-up” hearing of the Operators’ application for permission and the substantive claim. Broadly, the question for the Court to answer was not whether the CAA’s assessment of safety at RAFN was technically correct, but whether it was rational and in accordance with its duty of reasonable inquiry.

The Court found that: the CAA had carried out a reasonable safety assessment of RAFN and it was not the Court’s role to adjudicate disagreements on technical issues (Ground 1); the reasons for the CAA’s decision met the applicable standard of legal sufficiency, including propriety, adequacy and intelligibility (Ground 2); and the CAA had not unlawfully delegated its decision-making to the Military Aviation Authority (Ground 3).

The Court declined to intervene on the final ground – whether the CAA had misapplied the applicable operational safety rules (PANS-OPS) – finding that such technical disputes fall within the jurisdiction of the international aviation bodies established under the Chicago Convention; and that the CAA’s interpretation of the relevant safety rules met the applicable “tenability” approach.

Freezing injunctions / security for costs

Freestream Aircraft Limited (“Freestream”) v Seven Hundred Limited (“SHL”) & Ors. [2026] EWHC 1540 (Ch) / [2026] EWHC 1596 (Ch)

This case concerns a claim for alleged unpaid commission arising from the sale of a Gulfstream G700 aircraft in May 2025. Freestream, a business jet broker, alleges that it is entitled to a commission of US$837,500 from SHL under a fee agreement, and that the other defendants – TJB and SV – tortiously induced SHL to breach the fee agreement.

Two interlocutory applications were made in connection with the claim: (1) SHL applied for security for its costs in the proceedings; and (2) Freestream applied for a freezing injunction of up to £1,850,000 against TJB.

Security for costs application

SHL’s security costs application was based on CPR 25.27(b)(ii): that there is reason to believe that the claimant company (Freestream) would be unable to pay its (SHL’s) costs if ordered to do so.

SHL’s application relied on Freestream’s published accounts and conduct issues in separate overseas proceedings. The Court was not assisted by the conduct issues and based its findings on the available evidence on Freestream’s financial position. In summary, the Court found that Freestream had been resistant to providing full and open disclosure on its financial position; that the evidence that Freestream produced from its accountants and bankers presented a partial picture; and that Freestream’s published accounts indicated that its net asset position was lower than SHL’s budgeted costs for the proceedings. On that basis, the Court found there was reason to believe that Freestream would be unable to pay SHL’s costs if ordered to do so and therefore made an order for staged payments of security.

Freezing injunction application

In May 2026, Freestream discovered that TJB had renamed itself and sold its brokerage business to a third party – and declined to give any undertakings in respect of the sale proceeds. That prompted Freestream to apply for a domestic freezing injunction up to the amount of £1.85m.

All three limbs of the test for freezing injunctions were disputed, but the application turned on whether there was a real risk of unjustified dissipation. The burden is on the applicant that there is a real risk. In summary, the Court found that Freestream had not raised a prima facie case (i.e. evidence to support) that there was a real risk of unjustified dissipation. The Court also found that the test was not met because the sale of TJB’s brokerage business was a bona fide arm’s-length transaction; that the sale proceeds remained in TJB’s UK bank account; that TJB intended to continue to trade in the UK; and that TJB’s net asset position had improved post-sale. The Court therefore refused the freezing injunction application.

Just-Us Air S.R.L (“Just Us”) v Fibula Air Travel S.R.L (“Fibula Air”) [2026] EWHC 1270 (Comm)

Just-Us applied to continue a post-judgment Worldwide Freezing Order (“WFO”) obtained without notice against Fibula Air. The application followed judgment being entered for Just Us in the amount of c.€5.7m in respect of unpaid rent due under an aircraft lease agreement. The issue for the Court was whether to continue the WFO and/or remove the ‘ordinary course of business’ exception (entitling Fibula to make routine business payments) entirely; or, as Fibula Air contended, to discharge the WFO or alternatively increase the advance reporting threshold from €2,000 to €40,000.

The Court decided to continue the WFO. The Judge found that the evidence before him strongly suggested that Fibula Air was not being transparent about its finances, including: a post-judgment transfer of c.€565,000 to a company connected with Fibula Air’s owner; the transfer of a mortgaged property to a company with annual income of £4,000; and significantly under-declaring assets compared to its own balance sheet.

The Court declined to remove the ‘ordinary course of business’ exception in the WFO, on the basis that the judgment was subject to appeal; but also included further prohibitions on transfers to connected parties. The Court also increased the advance reporting threshold from €2,000 to €7,000 per transaction, to ease the inconvenience of Fibula Air’s trading while subject to the WFO.

Chady Aero Developments Ltd (“Chady Aero”) v Aero Engine Finance LLP (“AEF”) [2026] EWHC 1271 (Ch)

This case concerns a dispute over profit sharing arrangements under a partnership agreement for a limited liability partnership which was incorporated to invest in the aviation sector. AEF applied for security for its costs on the ground that there is reason to believe that the claimant company (Chady Aero) would be unable to pay its costs if ordered to do so (CPR 25.27(b)(ii)).

AEF’s evidence relied on a report from an insolvency practitioner which concluded, amongst other things, that Chady Aero was balance sheet insolvent and was reliant on the continued support of its directors. Chady Aero did not challenge the reasoning in the report but maintained that the impecuniosity condition was not satisfied. In summary, the Court found that Chady Aero’s net assets were not sufficient to satisfy AEF’s estimated costs to trial; that undertakings given by the directors not to enforce their loan accounts were insufficient given that the directors were resident outside the jurisdiction (and there are no civil remedies for breach of an undertaking); and it was unclear whether other debts said to be owed to Chady Aero would be realisable. The Court therefore found the impecuniosity condition was satisfied.

Chady Aero contended that security should not be granted because AEF’s counterclaim fell within the Crabtree principle (i.e. that there was overlap between Chady Aero’s claim and AEF’s counterclaim). The Court found there was some force in this submission, but decided to grant security on the condition that AEF consented to the dismissal of its counterclaim in the event that Chady Aero’s claim was struck out for failure to provide security.

Michael Popp, Dimitris Dimitropoulos and Thiseas Efthymiou, Trainee Solicitors, assisted in the preparation of this briefing.