SINGAPORE; VietJet passengers flying out of Changi Airport are unlikely to face disruptions to their travel plans despite a British court’s ruling to freeze the low-cost carrier’s worldwide assets over a US$250 million (S$319 million) debt.
However, lawyers The Straits Times spoke to said the budget airline would not be able to sell, move or hide its assets by transferring ownership, for instance. Daily operations, including flights, can continue as usual.
Checks on the Changi Airport website found that VietJet operates about 58 flights a week from Singapore on four non-stop routes.
The flights serve Ho Chi Minh City, Hanoi, Da Nang and Phu Quoc. A fifth route to Nha Trang is scheduled to begin in December.
On Oct 15, a British court froze up to US$251.6 million in VietJet assets, including its fleet of aircraft, engines it has ordered but has yet to receive, as well as pre-delivery payments, lease deposits and maintenance reserves.
The asset freeze ruling stems from VietJet’s long-running dispute with aircraft leasing firm FW Aviation over missed rental payments during the Covid-19 pandemic for four Airbus A321 aircraft.
The court said it issued the ruling because there was a “real risk” of VietJet attempting to hide its assets, such as when it transferred the economic value of its order book to a company in the Cayman Islands that appeared to have no office and no staff.
London-based lawyer Guy Marrison, a partner in the aerospace team at law firm HFW, told The Straits Times that the order would not have a direct effect in Singapore unless it was registered and recognised by a Singapore court.
He said: “The purpose of the latest order is to preserve VietJet’s assets for enforcement purposes. The idea is not to freeze the whole business or cause disruption.
“The business needs to continue as usual, otherwise it will not be able to pay the judgment debt.”
He added that breaching the order could carry serious consequences, including contempt proceedings, which may result in fines, asset seizures and even imprisonment in some cases.
When asked whether such an application had been made, a spokesperson for the Singapore Courts said: “As the court proceedings – including enforcement – are ongoing, we are unable to provide further information on the matters raised.”
On May 5, the Singapore High Court issued an order linked to the dispute between VietJet and FW Aviation. It ruled that VietJet’s nine Airbus aircraft were to be seized if they landed in Singapore.
On Oct 15, the Commercial Court, an arm of the British High Court in London, issued a judgment seen by The Straits Times.
It said: “It is not in dispute that VietJet immediately reduced, and then appeared to stop altogether, flights of those nine aircraft to Singapore.
“VietJet admits that by no longer flying those aircraft to Singapore, it has taken active steps to prevent enforcement.”
Lawyer Melvin Lum, a director at Quahe Woo & Palmer LLC, said the Civil Aviation Authority of Singapore (CAAS) was unlikely to wade into the commercial dispute.
CAAS, he added, was not required to suspend VietJet’s licence despite its legal troubles unless it found that flight safety, aircraft maintenance or the airline’s ability to operate was compromised.
WongPartnership, which represents FW Aviation in Singapore, declined to comment on ongoing legal matters. - Straits Times/ANN
