Garuda Indonesia Lost Case in London Arbitration Court

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Laila Afifa

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  • Garuda Indonesia launches its Airbus A330-900neo aircraft which has a mask feature on its nose at GMF AaeroAsia in Soekarno-Hatta Airport, Tangerang, Banten, Thursday, October 1, 2020. The mask feature was made by 60 workers for 120 hours. ANTARA/Muhammad Iqbal

    Garuda Indonesia launches its Airbus A330-900neo aircraft which has a mask feature on its nose at GMF AaeroAsia in Soekarno-Hatta Airport, Tangerang, Banten, Thursday, October 1, 2020. The mask feature was made by 60 workers for 120 hours. ANTARA/Muhammad Iqbal

    TEMPO.CO, Jakarta - State-owned airline Garuda Indonesia (IDX: GIAA) lost the lawsuit for the payment of aircraft rental fees at the London International Arbitration Court (LCIA). The airline must pay all its obligations.

    Garuda Indonesia's finance and risk management director, Prasetio, said the company was informed about the loss on September 6.  The LCIA ruled in favor of and issued an arbitration award in the lawsuit filed by lessor Helice dan Atterrissage (Goshawk) against Garuda, concerning the payment of aircraft charters.  

    "The LCIA issued an arbitration award, which essentially requires the company to pay the aircraft leases and aircraft lease obligations, the default interests, and the payment of the plaintiff's court fees," Prasetio said today in a disclosure at the IDX, September 9.

    GIAA is now coordinating with its legal counsel to determine the company's next steps.  Prasetio said the LCIA decision will not have a direct impact on the flag carrier's operation, ensuring that all aspects of flight operations will continue as normal.

    Garuda Indonesia is in the process of renegotiating its aircraft rental contract following a lawsuit filed by its lessors since last year. Helice Leasing S.A.S is one of them, requesting the confiscation and confiscation of Garuda Indonesia's funds in the airline's Dutch accounts. The court granted it in March 2020.

    In May 2020, Helice filed another lawsuit against Garuda through the French Court, which also granted the confiscation of Garuda's account in France.

    Also in May last year, Garuda faced a breach of contract from Aercap in the London Court. Garuda is currently in negotiation with Aercap for the purpose of contract restructuring.

    Read: The End of Garuda Indonesia

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