The High Court has ruled in favour of the joint liquidators of two Irish-based Russian State-owned leasing firms in proceedings brought against the entities' parent over attempts to seize aircraft worth an estimated US$2bn.
In his judgement Mr Justice Rory Mulcahy said the liquidators to Dublin registered GTLK Europe DAC and GTLK Europe Capital DAC were entitled to various declarations in relation to the firm's parent Joint Stock Company State Transport Leasing Company's claims over some 37 aircraft.
The declarations effectively voids several purported 'pledge agreements' which the parent had claimed allows it to take ownership of the aircraft from its Irish registered subsidiaries.
GTLK's Europe Group's international leasing business is headquartered in Dublin.
Represented by James Doherty SC appearing with Stephen Byrne Bl, the liquidators, Damien Murran and Julian Moroney of Teneo Restructuring Ireland, say the aircraft are the property of the firms in liquidation, and the parent has no legal entitlement to the assets.
In his judgement the Judge said the liquidators are entitled to declarations to the effect that the said pledge agreements are void and unenforceable as a matter of Irish law. and that the liquidators retain title to the aircraft.
The judge said that there was no evidence that the alleged pledge agreements, which were used as securities for loans of over US$300m allegedly advanced to the companies by its parent, were ever formally registered, or than any attempts were made to formally register them.
The judge said that the liquidators were only made aware of the alleged pledge agreements in September, several months after the company was put into liquidation.
There was no mention of the pledge agreements in the companies books and records, he said.
The judge added that there was no mention of said pledge arrangements, which would put the parent in a better position compared to other creditors of the companies, when sworn statements were put before the courts in respect of a proposed examinership, and when the companies had initially opposed the winding up order brought against it.
The timing of the making of the purported pledge agreements was also significant, the judge said, given that they were made at a time when the firms were in chaos due to the international sanctions placed against various Russian entities following the invasion of Ukraine.
The judge noted that the joint liquidators do not expect to recover the aircraft, which are all believed to based in Russia and that the declarations will be used as part of insurance claims that have been made by the liquidators in respect of the assets.
The judge said that the parent firm's lawyers had said in correspondence that it would not get a fair hearing in this jurisdiction, and had argued that the matter should be determined by the Russian courts.
Mr Justice Mulcahy rejected those contentions, adding that the parent was given every opportunity to participate in the proceedings, but chose not to do so.
In its proceedings against the parent the liquidators said the defendant informed it that it was registering itself as the aircraft's legal owners.
GTLK's parent, which is owned by the Russian Federation, claimed it was entitled to be registered as the legal owner under 'pledge agreements' that are governed by Russian law, allegedly entered into between it, GTLK Europe, and nine other GTLK Europe group companies.
The agreements, it claimed were allegedly entered into in March 2022, two weeks before the parent became the subject of EU sanctions imposed following Russia's invasion of Ukraine.
The parent claimed that the agreements were security for loans to GTLK Europe.
Several subsidiaries of the GTLK group were notice parties to the action.
The Irish-registered firms, which are part of the wider GTLK group, were wound up earlier this year following an application by four creditors who claimed they were owed over US$178m/€162.5m by the firms.
GTLK, is Russia's largest leasing business in the transport sector, and had leased ships and aircraft to customers all over the world.
