MSN 1364 Leasing Limited & Anor v Big Charter Pvt Ltd

Paul Stanley KC :

1. This case concerns leases of two ATR 72-600 aircraft, with manufacturer’s serial numbers MSN 1364 and MSN 1385. Each was leased by one of the claimants to a company called Vman Aviation Service IFSC Pvt Ltd (“Vman”). Each was then sub-leased by Vman to the defendant, which is an Indian airline (“FlyBig”, which is the name under which it trades). The claimants had the benefit of certain indemnities in the sub-lease, and took assignments of rights under the sub-leases from Vman as part of their security. They now seek to enforce those rights. It is common ground that the leases have been terminated, and the aircraft redelivered. The application before me is made by the claimants (under the respective applicable sub-leases), seeking summary judgment in relation to parts of the claim. There are other parts of the claim for which summary judgment is not sought, and which I have not had to consider.

2. The question ultimately before me is whether FlyBig has a realistic prospect of successfully defending those parts of the claims for which summary judgment has been sought.

3. I have decided that FlyBig does not have a realistic prospect of defending those parts of the claim for which summary judgment is sought, and that there is no other reason for trial. I shall therefore grant the claimants summary judgment in the amounts they have sought, and their costs on an indemnity basis pursuant to contract. Factual background

4. Except for aircraft-specific details, and slight differences in the date of some documents, the suite of contractual documents concerning each aircraft were in materially identical terms.

5. Each of the claimants leased its respective aircraft to Vman, by head leases dated 28 November 2021 (for MSN 1364) and 16 December 2021 (for MSN 1385). On the same dates, Vman sub-leased each aircraft to FlyBig.

6. In each case, Vman entered into a “lessee security assignment” with the relevant claimant. For MSN 1364 that document was dated 16 February 2021. For MSN 1385 it was dated 27 May 2022.

7. For each aircraft, notice of the lease security assignment was given to FlyBig on the day of its execution, and acknowledged by FlyBig.

8. The claimants’ case is that FlyBig began to fall behind with payments in May 2023. As I explain below, Mr Uddin (who appeared for FlyBig) sought to persuade me that there are or may be factual issues about this, but I am not satisfied that there are. Some payments were made late, and incurred late payment charges under the sub-leases. By 3 November 2023, there were arrears. Notice to terminate the sub-leases was given on that date. MSN 1385 was redelivered on 23 November 2023. MSN 1364 was redelivered on 29 December 2023. The claimants say that they were not in the contractually required redelivery condition. But that claim, although it will form part of this case, is not one of the parts of the case on which the claimants ask for summary judgment.

9. On 31 December 2024, the claimants gave FlyBig enforcement notices for the lessee security assignments. This case

10. This case was commenced by a claim form sealed on 24 January 2025. It was duly served, but FlyBig did not acknowledge service. The claimants therefore issued and served an application for summary judgment dated 24 June 2025. Because service had not been acknowledged, they also applied under CPR 24.4 for permission to make that application before acknowledgement of service. For the same reason, the application was made before service of particulars of claim.

11. The application seeks summary judgment on a number of claims: i) for unpaid rental and supplemental rental payments, and for late payment charges on those and on rental and supplemental payments that, although paid, were paid late. ii) for various expenses incurred as a result of the defaults, and costs, under an indemnity provision in the sub-lease. The evidence in support of the original summary judgment application did not quantify these amounts in detail, and said that would be done by evidence later. It was then done by Mr Flaux’s third witness statement, which was served on 15 July 2025.

12. Across both aircraft, the total sums claimed slightly exceed USD 1.1 million.

13. The summary judgment application was originally listed to be heard in late July 2025, but was rescheduled to 8 August 2025 because of judicial availability. Two days before it came on, FlyBig sent an email to the court, in which it sought an extension of time to serve an acknowledgement of service and for the hearing to be adjourned to allow it to file evidence. The letter said that FlyBig had experienced “logistical challenges” in obtaining representation and reviewing the “voluminous” evidence. It canvassed five areas in which FlyBig asserted it might have a defence: that the claim was “wholly without any basis in terms of the law of facts”, that the termination of the leases was not “commercially reasonable under Article IX(3) of the Cape Town Convention”, that there were “discrepancies in invoices and the amounts computed” which “warrant further scrutiny”, that the claimants’ enforcement under the lease security arrangements (i.e., the assignments) was “procedurally defective”, and that FlyBig had counterclaims which it would be entitled to set off.

14. On 8 August 2025, the application came before HHJ Pelling KC, sitting as a High Court Judge. HHJ Pelling KC permitted FlyBig to file an acknowledgement of service by 15 August. He ordered that FlyBig should serve “any evidence in response to the Application on which it intends to rely by 4pm on 5 September 2025 in default of which it shall be debarred from filing and/or relying on any evidence in support of the application.”

15. FlyBig did file acknowledgement of service, and Crowell & Moring UK LLP came on the record to represent it. On 5 September 2025, Mr Gordon McAllister of Crowell and Moring UK LLP duly filed a witness statement as HHJ Pelling KC had ordered. Paragraph 3 of his statement said: “This witness statement was prepared with assistance from other members of the Defendant’s legal team and following discussion with employees of the Defendant in person, by telephone, by videoconference and by email.”

16. Mr McAllister’s statement did not pursue most of the points canvassed in the letter that FlyBig had sent to the court on 6 August. Far from asserting that the application was “wholly without basis in terms of the … facts”, paragraph 6 said that a large number of facts were “agreed”. No material fact was identified as disputed. Paragraph 7 expressly accepted the validity of the leases and of the assignment. Paragraphs 8 and 9 agreed that rental, supplemental rental, and late payment charges had not been paid in full, and that notices demanding payment had been sent. It did not in terms admit the amounts due, but it took no point on the amounts or their calculation, although FlyBig had had the relevant evidence since June and July, and almost a month had passed during which the calculations could have received the “further scrutiny” they “warranted”. It took no point about the reasonableness of the termination. It raised no issue about the assignments being “procedurally defective”. It made no submission that the application was “wholly without any basis” in law: on the contrary, its account of the facts that were largely agreed (valid leases, valid assignments, unpaid sums) demonstrated a perspicuously valid prima facie claim. The one point that it took was that FlyBig should be entitled to set off sums paid as security deposit—said to amount to USD 585,000—against the sums claimed.

17. The hearing before me was listed for 14 November 2025. Three days before it was due to commence, Crowell & Moring UK LLP applied to come off the record. (As I understand it that application was granted by Calver J shortly after the hearing before me, though by that time it had been superseded by the events I describe below.)

18. When the remote hearing began at 10.30 on 14 November, I was informed that five minutes earlier, the court and the claimants had received (a) a notice of acting from Osmans solicitors, (b) a skeleton argument from Mr Uddin and Mr Harjot Singh, and (c) a witness statement of Mr Sanjay Mandavia of FlyBig. Mr Uddin was not present when the remote hearing started, awaiting joining details. I adjourned briefly so that he could attend with his junior. When the hearing recommenced, Mr Uddin did not (realistically) apply to adjourn it; but he did make an application for relief from sanctions to enable him to adduce the new statement, and to rely on the skeleton argument that he had filed late.

19. I decided that I would consider the witness statement de bene esse, and read it. I made it clear that I would not read the entirety of the exhibit, but that counsel should refer me to any parts of it on which they placed specific reliance. I decided that I would consider the application for relief against sanctions in conjunction with the summary judgment application. I did read, and have considered, the skeleton argument, which represented a careful attempt by Mr Uddin, at short notice, to engage with the issues. I also had the benefit of oral submissions from Mr Alliott (for the claimants) and Mr Uddin (for FlyBig), and Mr Uddin was able to develop orally the points that he had put in writing. I am grateful to him for the care with which he did so. As I set out below, I allowed both counsel to make further written submissions on one point after the conclusion of the hearing, and I have considered those too. Relief from sanctions

20. HHJ Pelling KC’s order of 8 August 2025 made it clear that the only evidence that FlyBig should be entitled to rely on was to be filed by 5 September 2025. Had FlyBig merely sought to adduce evidence to respond to new points made by the claimants in reply to their evidence it might have been permissible to do that. But the evidence that FlyBig sought to adduce on the morning of the hearing was not of that sort. Rather, it complained that Mr McAllister’s evidence—served with its authority and on its behalf in response to HHJ Pelling KC’s order—was inaccurate or insufficient, and to reopen it comprehensively. Mr Uddin was therefore quite right to accept that FlyBig required relief from sanctions for it.

21. I approach this question following the schema prescribed by the Court of Appeal in Denton v TH White Ltd [2014] EWCA Civ 904 , [2014] 1 WLR 3926 .

22. The breach was both significant and serious. HHJ Pelling KC’s order was made in circumstances where FlyBig had disrupted an application at the last moment, seeking a significant indulgence to give it a further opportunity to adduce evidence. Its terms gave FlyBig ample time to file evidence. They should have clearly impressed upon FlyBig the critical importance of doing so in strict compliance with the timetable laid down. The new evidence that FlyBig sought to adduce at the hearing in November was filed more than two months after the expiry of the deadline set by that order, and just minutes before the hearing commenced.

23. FlyBig offers no good explanation for the breach. The court would expect (and Mr McAllister’s witness statement positively confirms) that experienced solicitors filing evidence will have carefully considered it with their client, and that the client would have read and considered it carefully. FlyBig has had two months since that evidence was filed (during which Crowell & Moring remained instructed and on the record) to identify and correct any errors in it. Mr Mandavia’s witness statement says that he had been “extremely concerned” when he read Mr McAllister’s statement. But it does not explain why it had then taken more than two months, throughout which Crowell & Moring UK LLP remained on the record, for FlyBig to file any additional or corrective evidence, or even to communicate any perceived need to do so.

24. Stepping back and, thirdly, considering all the circumstances, I have no doubt at all that relief against sanctions should be refused. This is not the first time that FlyBig has sought to file evidence at the eleventh hour in a way that would disrupt a hearing. The explanation for doing so is inadequate. Moreover, when analysed, the evidence takes matters no further. In so far as FlyBig has legal arguments (about set-off, or for that matter about the construction or effect of the admittedly governing documents, or about the application of the Cape Town Convention) they can all be advanced without additional evidence. The evidence would really be relevant only if it went to some point of factual dispute. But, when examined, it does not even do that. It asserts that there are errors in Mr McAllister’s evidence, but it does not identify what those errors are or the (allegedly) true position. Bearing in mind that those points can really go only to the state of the accounts under the sub-lease this is incomprehensible: FlyBig—which has been aware of these proceedings for months—must be in a position to say what it thinks it owes under an aircraft lease. To admit evidence which does not even say “the true position is X” but simply asserts that other evidence, filed by FlyBig’s solicitors with its cooperation and with its authority, contains unidentified errors would be unfair to the claimants, and subvert the objective to decide cases justly. But it would also take FlyBig no further, because those sorts of unparticularised and unevidenced assertion would not enable the court to identify any defence with a realistic prospect of success.

25. I therefore decline to grant relief from sanctions. But I am also confident that the admission of Mr Mandavia’s evidence would have made no difference to the outcome of the hearing, and that FlyBig’s repeated promise that if given “just a little more time” some new answer to this application might emerge is misconceived and inconsistent with the overriding objective. As HHJ Pelling KC’s order made transparently clear: the time is now. Summary judgment: the legal test

26. Under CPR 24, the court may give summary judgment for the whole of the claim, or a particular issue, if (a) the defendant has no real prospect of successfully defending the claim or issue and (b) there is no other reason why the case or issue should be disposed of at trial. A “realistic prospect” stands in contrast to a “fanciful” one. So far as issues of fact are concerned, the court will not embark upon a mini trial, and will bear fully in mind the possibility that the processes of disclosure and trial may lead to factual discoveries; but it will not regard trial as justified unless there is a factual issue whose resolution may make a difference, or simply on the off-chance that something might turn up. So far as issues of law are concerned, a summary judgment application will usually not be the right opportunity to address difficult legal issues that deserve extensive argument and citation of authority. But it can provide an opportunity to grasp the nettle to decide straightforward points of law, especially points of construction. Those principles, familiarly set out by Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15], approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098 , [2010] Lloyd’s Rep. IR 301 at [24] were not in dispute. The claims: prima facie liability and quantification

27. Mr Uddin’s first argument was that the claims on which summary judgment is sought are not reliably quantified, and that trial is necessary to determine what amounts (by way of rental, supplemental rental, late payment charges, and costs indemnities) are due under the sub-leases.

28. I am satisfied that this is not the position. As far as the rental, supplemental rental and late payment charges are concerned, the claimants’ position was clearly set out in Mr Flaux’s original (second) witness statement. Mr McAllister took no issue with it. Mr Mandavia, although he says there are errors, does not identify what they are, and the only admissible evidence before me (Mr McAllister’s statement) not only fails to identify any error, but implicitly accepts that the calculations are correct. None of this is the sort of inquiry that would normally require disclosure or trial: it is a simple matter of accounting, and one can confidently expect that a lessee will know the state of the account and, with several months’ notice, would be able to identify errors if they existed. Where it has not identified an error, the right inference is that no arguable error exists.

29. The same, in my judgment, applies to the costs claimed under the indemnity provision. Mr Uddin did not submit that the claimants are not entitled, in principle, to be indemnified for the costs of enforcement under clause 10.4 of the sub-lease, coupled with clause 1.3 of the sub-lease, which provides that each “Principal Indemnitee” (a term that includes the claimant) may enforce the indemnity given in clause 10.4 for the benefit of a related indemnitee. Clause 10.4 in turn provides that FlyBig will indemnify any indemnitee (including both the claimants and their affiliates, against “all Losses which may at any time be incurred … as a consequence of … the occurrence of any Default or Event of Default” and “the enforcement or preservation of any of its rights under the Relevant Documents”. Whether, technically, their claim sounds in debt or in damages does not make a material difference.

30. Mr Uddin submitted that there were reasons to investigate how the costs had been incurred and that insufficient detail had been provided. That is not the case. Mr Flaux’s third statement (served on 15 July 2025) contained both precision and, in the form of an exhibit, detailed evidence which FlyBig has now had four months to scrutinise. But neither in evidence nor in argument did FlyBig raise any specific point on which it is doubtful or in relation to which there is any prospect that trial would alter the position.

31. I raised one point of potential doubt with Mr Alliott about this item, which is that it might be argued that the Claim Form does not clearly raise the indemnity against costs as a head of claim. Mr Alliott, however, submitted that it could be encompassed in the relief claimed in the claim form (either as damages, or as costs) and reminded me that there could be nothing amounting to more than the most arid technical objection, since it had been made transparently clear when the application was issued that these costs were being claimed, and that they had been fully and precisely quantified in Mr Flaux’s third statement.

32. I agree. The highest this could be put—even as a technical quibble—would be that the summary judgment application should have identified one other paragraph in the prayer for relief (namely that claiming “damages”). That defect, if it were a defect, could be resolved by amendment. There is no reason to think that FlyBig was left in any doubt about what was being claimed, or put in any difficulty about addressing it (which Mr Uddin did, albeit I cannot accept the submissions he made).

33. I would therefore, subject to the defences that I will consider next, grant summary judgment on all the claims. The suggestion that a trial is required to determine prima facie liability or quantum is no more than an unreasonable hope that “something may turn up”. That is not, on the authorities, sufficient to give rise to a realistic prospect of successfully defending the claim. The assignment

34. The assignment may well be irrelevant to the indemnity claims, given the terms of clause 10.4 of the sub-lease and the third party rights granted by clause 1.3, which together give the claimants a direct right of enforcement. But it is relevant to the other claims, and the claimants did not invite me to draw any distinction in this regard.

35. On behalf of FlyBig, Mr Uddin advanced two main arguments about the assignment. The first, which he developed orally, was to the effect that there may be some factual uncertainty about the assignment. He was, however, unable to identify anything specific; and there is no reasonable prospect of finding one. The documents are completely clear, and FlyBig has not identified any factual issue which would make trial a worthwhile exercise (even, I should say, in the letter sent to the court on 6 August 2025, much less in Mr McAllister’s witness statement, or Mr Mandavia’s witness statement).

36. Mr Uddin’s second point, which he made briefly in his skeleton and oral submissions and developed further in post-hearing written submissions was that even taking the assignment on its terms, it was not an absolute assignment capable of taking effect in law under section 136 of the Law of Property Act 1925 , but an equitable assignment. As such, he contended, it is elementary that the assignor (i.e. here, Vman) is a necessary party to the proceedings, either as claimant or defendant. That is essential to ensure that the debtor obtains a good discharge, and because (as Mr Uddin submitted) it enables the debtor to raise cross-claims against the assignor even if they cannot be deployed defensively by way of set-off.

37. There are, then, two questions. Does FlyBig have reasonable prospects of establishing at trial that the assignment here takes effect (in whole or in part) only in equity? And if it does, does that give it either a defence that has a realistic prospect of success, or constitute some other reason why trial should take place? The issues were not canvassed by Mr McAllister’s evidence, but they were open to FlyBig simply as legal argument from the material in evidence. However, as they took the claimants by surprise, I permitted both parties not only to make oral submissions but to develop their arguments in brief written submissions after the hearing.

38. As to the first point, I could not conclude—despite Mr Alliott’s submissions—that it is clear beyond argument that the assignment takes effect as an absolute assignment within the meaning of section 136 of the Law of Property Act 1925 . That section applies to “[a]ny absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action”. Working out whether a particular assignment meets these criteria is not always straightforward. The fact that the purpose of the assignment is to provide security is not decisive, for it is possible to devise a scheme which will convey title “absolutely”, but serve to secure an obligation. On the other hand, the language is not decisive, and an assignment may be expressed to be absolute and yet be accompanied by terms which make it clear that it cannot operate absolutely, but only by way of charge.

39. The assignment in this case was expressed to be absolute: clause 4.1 provided that Vman “assigns and agrees to assign absolutely … all of its rights … from time to time in and to the Assigned Property”. However, there were elaborate mechanisms for the assignment to take effect as a “floating” security interest, until notice was given of its crystallisation, or it crystallised automatically. It is also clear that it was created as a security. Although notice of the assignment was given to FlyBig, those notices expressly stated: “Provided that the assignee has not delivered a notice to the effect that a Default or an Event of Default has occurred and is continuing … all amount payable by [FlyBig] in respect of the Assigned Property shall continue to be payable by [FlyBig] to [Vman] in accordance with the Sub-Lease and [Vman] shall be entitled to exercise any and all rights in or in relation to the Assigned Property in accordance with the terms of the Sub-Lease”

40. On the face of it, this schema (of a “floating” security interest, under which FlyBig remained accountable to Vman, not the claimants) would seem to me to be hard to square with an “absolute” assignment. They seem to assume that Vman retains an interest in the rights that are being assigned.

41. The Enforcement of Assignment Notices given to FlyBig however, arguably changed that. They contained express instructions “to make all payment of rent and other amounts … to, or to the order of” the claimants, and “to the exclusion of [Vman], to perform, observe and comply with all the … undertakings and obligations under the Sub-Lease in favour of and for the benefit of [the relevant claimant] as if [the relevant claimant] were named in place of the “Lessee” in respect of the Sub-lease”. They informed FlyBig that “[a]ll rights, powers and discretions of [Vman] under the Sub-Lease are now exercisable by, and notices must be given to, the [relevant claimant] or as it directs”. They informed FlyBig that “[a]ll amounts due and payble to [Vman] under the Sub-Lease, including outstanding Rental and Supplemental Rental Amounts, must be paid to [the relevant claimant]”.

42. Mr Alliott submitted, in his post-hearing written submissions, that I could be satisfied under this scheme that, whether or not there was initially an “absolute” assignment for the purposes of section 136 , such an assignment undoubtedly sprang into being when the Enforcement of Assignment Notices were given. Mr Uddin, on the other hand, in his post-hearing written submissions, emphasised that the dividing line involves consideration of the substance of the obligations set out in the instrument of assignment as a whole ( Bexhill UK Ltd v Razzaq [2012] EWCA Civ 1376 at [45] (Aikens LJ) and the cases there cited), and that it is therefore sensitive to the particular facts of the case. He submitted that it was not appropriate for summary judgment in this case.

43. Mr Alliott may turn out to be right, but I would be cautious about granting summary judgment without a far more thorough examination than the application before me offered of how the assignments operate, and the rights to which they relate, bearing in mind that the assignment is only expressed to operate “for the full payment, performance and discharge of the Secured Obligations for the time being and from time to time”. I do not want to be understood to have reached or expressed any concluded view on this point; but if the grant of summary judgment depended on my being satisfied that there is no reasonable prospect of FlyBig establishing that the assignment was, in whole or in part, equitable, I would not have been prepared to grant summary judgment without more thorough argument.

44. Mr Uddin also submitted, in his written submissions, that there was a further (arguable) defect in the notice of assignment, which he said lacked essential detail in terms of the address of the assignee and the rights assigned. I do not agree with that submission. The notices here were given in the context of a detailed tripartite relationship, and contained (in themselves, and in the documents they referred to) all the necessary information.

45. I therefore proceed on the basis that the claimants have satisfied me that the rights on which they rely were unquestionably assigned to them, but that there is an arguable case that the assignment (at least in relation to some of the rights to which it related) may not have been an absolute assignment within section 136 . It may therefore have been an equitable assignment, and if so the usual practice would be for Vman to be joined—either as claimant or defendant.

46. However, the practice of joining the assignor to any action in which the assignment is equitable is a “rule” of procedure, not a rule of substance. So much is clear from Etherton LJ’s decision in National Westminster Bank plc v Kapoor [2011] EWCA Civ 1083 . He said, at [43]: “As the authorities I have cited clearly show, the consistent line of authority, binding on this court, is that the equitable assignee of a debt, and not the equitable assignor, has the substantive legal right to sue for the assigned debt. Although there is a procedural requirement that the assignee should join the assignor in order to protect the debtor from successive actions and to prevent conflicting decisions, even that procedural requirement will not apply or may be dispensed with by the court in appropriate circumstances, most particularly where those concerns do not apply.”

47. It follows that the non-joinder of Vman, even assuming that the assignment here was equitable only, does not give rise to a substantive defence. It gives rise, potentially, to an objection that the claimants have not (yet) complied with a procedural requirement. But that procedural requirement is one that the court may in appropriate circumstances dispense with. The circumstances in which it would, or might, be appropriate to dispense with that procedural requirement are, in particular, where it is clear that the joinder is not required to protect the debtor from successive actions or to prevent inconsistent decisions.

48. Mr Uddin submitted that I could not be so satisfied here. However, I am, at least as far as the claims that are the subject of this application are concerned. (I say, deliberately, nothing about the other claims in the case.) Four things, in my view, take this case outside the normal run, and provide sound reasons to displace the usual procedural rule. First, although the assignment is between Vman and the claimants, it was contemplated by the sub-lease and specifically agreed by FlyBig. FlyBig signed acknowledgements (for each assignment) in which it “irrevocably and unconditionally consents to the assignment and undertakes to be bound by its terms”. To that extent, the assignment was not merely bilateral but trilateral. Second, the terms of the assignment itself—to which FlyBig consented and undertook to be bound, expressly provide that the claimants are to have the power to “collect, receive or compromise and give good discharge for any and all monies and claims for monies due and to become due for the time being comprised in the Assigned Property”, so that there is no question that the claimants can give good discharge or that the assignment covers the claims that are before me. Thirdly, the Enforcement of Assignment Notices expressly made that position clear. Fourthly, that has—until the morning of the hearing before me—been FlyBig’s stated position, most notably in Mr McAllister’s evidence, and there is not the slightest evidence of any risk of double-claim, double-recovery, or double-payment.

49. Mr Uddin also submitted that the strict application of the conventional procedural rule is necessary so that Vman should be joined as a party to enable claims (for example, for return of the security deposit) to be made against it. I cannot agree, not least because I do not think this is the rationale of the rule. If FlyBig have a claim that could validly be set off against the sums they owe, then that point could be raised defensively here. (I explain, below, why I consider that it does not have such a claim.) If FlyBig has a claim or claims that are not subject to set-off, then it is no injustice for this case to proceed without Vman’s involvement. If FlyBig wishes to sue Vman, it can do so under the sub-lease, which contains an English jurisdiction agreement.

50. Accordingly, even assuming in FlyBig’s favour that the assignment might not be a section 136 assignment, (i) I do not consider that the non-joinder of Vman provides FlyBig with any substantive defence to the claim; (ii) I do not consider that, in the particular circumstances of this case, and in relation to the claims I am considering, the normal procedural rule should apply (even if, which I do not decide, the assignment here operates in equity only); (iii) I do not consider that those procedural objections give rise either to a realistic prospect of defending the claims for which summary judgment is sought or a compelling reason for trial. Termination

51. Mr Uddin submitted that it could be argued that the termination of the sub-leases was in breach of the Cape Town Convention. That Convention on International Interests in Mobile Equipment is, pertinently to this case, given effect by the International Interests in Aircraft Equipment (Cape Town Convention) Regulations 2015. The provision to which FlyBig refers is Article IX(3) of the Protocol to the Convention specific to aircraft equipment, which provides that “any remedy given by the Convention in relation to an aircraft object shall be exercised in a commercially reasonable manner”. As I understand it the submission is that the termination in this case was not reasonable.

52. I do not consider that this gives rise to any defence which would have a realistic prospect of success. Let it be supposed (a point that I agree with Mr Alliott is doubtful, but will for the sake of argument assume) that the Cape Town Convention, which is concerned with security interests in identifiable objects, has any bearing on the contractual financial consequences of the exercise of a contractual right to terminate a lease. That could not help FlyBig at all, so far as unpaid rental, supplemental rental, and late payment charges are concerned, since their incidence does not depend on the termination of the lease. They are sums due regardless of termination. At most it might go to the indemnity against the costs of enforcement. More importantly, I do not think that FlyBig would have any prospect, let alone a realistic one, of persuading a court at trial that it was anything other than commercially reasonable to terminate an aircraft lease where the lessee is and remains in default. On the contrary, it is self-evidently commercially justifiable to do so, and Article IX(3) of the Protocol expressly states that “A remedy shall be deemed to be exercised in a commercially reasonable manner where it is exercised in accordance with a provision of the agreement except where such a provision is manifestly unreasonable” (see also the International Interests in Aircraft Equipment (Cape Town Convention) Regulations 2015, regulation 24). A provision permitting termination of a lease for uncured non-payment cannot, in my view, be so regarded. Penalty

53. Mr Uddin submitted that the late payment charges, which amount to an interest rate of 10 percent, are so high as to amount to a penalty. I do not consider that this is an argument that has any realistic prospect of success. There is no realistic basis on which a court would conclude that interest at that rate, in the circumstances of a lease such as this, is penal so as to invalidate the late payment charges. Set-off

54. It is common ground that FlyBig paid security deposits to Vman. The amount of those deposits is disputed. FlyBig say that they total USD 585,000. The claimants say that total security deposits of USD 670,000 were paid, but that USD 170,000 have already been appropriated by Vman to unpaid sums due under the sub-leases so that the balance of the security deposit is USD 500,000.

55. The sub-leases contain no express provision for the return of security deposits at the end of the lease. But it is certainly realistically arguable (as the claimants accept) that the termination of the leases must carry with it, at least by implication or by operation of law, the right for FlyBig to be repaid the security deposits by Vman. I proceed on that basis. It follows that FlyBig does have, against Vman, a claim for the return of those deposits.

56. The question, however, is whether FlyBig can assert that claim as a defence to this application. It can do so if, but only if, it is entitled to set off the sum due to it against the sums claimed herein. If so, then it can assert them equally against the claimants as Vman’s assignees. If not, these are claims (however valid) which do not give rise to any realistic prospect of success.

57. It is convenient to start with the position during the normal operation of the lease. The security deposit is a sum of money that becomes Vman’s own money, not held as trustee, agent, or fiduciary: see clause 9.5(a). Clause 9.5(b) then provides: “In addition to all rights and remedies of the Lessor elsewhere in this Agreement, the Lessor may: (i) deduct from the Security Deposit … any amount due and payable from the Lessee (a Lessee Obligation) under any Relevant Document or any Other Relevant Document; or (ii) apply or appropriate the Security Deposit and apply or retain such amount towards payment of any Lessee Obligation in any order that it deems fit.”

58. Clause 9.5(c) then specifies that if the security deposit is used in this way, the Lessor may require FlyBig to top it back up. That right is not directly in issue. But clause 9.5(b) is significant because it is drafted in terms which give the Lessor the power, but not any obligation, to use the security deposit to discharge FlyBig’s obligations (“the Lessor may ”). And its terms give the Lessor expressly unfettered obligation to decide, if it does use the security deposit for this purpose, which obligations are to be met in this way and in what order (“any Lessee Obligation in any order that it deems fit”). Such a scheme is fundamentally inconsistent with the idea that FlyBig has any right to require its obligations to be met from the security deposit.

59. Clause 12.3 of the sub-lease says that FlyBig’s obligations under it are “absolute”, which in this context is being used in contrast to “conditional”, including by reference to “any right of set-off, counterclaim, defence”. That in itself goes only so far, not least because specifying that a right is not conditional upon a “right of set-off” (whatever it might be intended to mean) does at least seem to suggest the possibility that there might be rights of set-off. However, clause 12.4 is more definite. It provides: All payments by the Lessee under the Relevant Documents shall be made in full without any deduction or withholding (whether in respect of set-off, counterclaim, duties, Tax, charges or otherwise) unless a deduction or withholding is required by any applicable law …

60. That is crystal clear. It becomes still clearer when one contrasts the provisions of clauses 12.3 and 12.4 (which concern payments due from FlyBig) with those of clause 26.10 which expressly provide that the lessor “may” set off any matured obligation owed by FlyBig against any obligation owed to FlyBig.

61. The scheme is therefore clear beyond any argument with a reasonable prospect of success. It is by design lop-sided. Vman (and, standing in its shoes, the claimants) may choose to use the security deposit to discharge obligations, and may meet FlyBig’s claims with a defence of set-off. But FlyBig cannot insist on that, and is obliged to make all payments without withholding (unless required by law), including set-off.

62. Does it make any difference that the lease has been terminated? Making the most favourable of assumptions in FlyBig’s favour, it might be said that termination arguably affects the scheme under clause 9, and prima facie entitles FlyBig immediately to the return of the security deposit. But even if that is correct, the contractual obstacle to set-off posed by the terms of clause 12.4 remains. Moreover, in circumstances where the parties’ express agreement is that the security deposit “may” (not must) be used by Vman to meet any obligations it chooses, in whatever order it chooses to meet them, to afford rights of set-off to FlyBig would subvert the agreed contractual scheme. The claimants remain entitled either (a) to decline to use the security deposit as the fund to meet any obligations to them and (b) to prefer, if they choose, to use it to meet obligations other than those that are the subject of the summary judgment application as Mr Flaux’s fourth witness statement explained.

63. For all these reasons, FlyBig has no reasonable prospect of establishing as a defence that it is entitled to set-off any part of its claim (against Vman) for the security deposit’s return against any sum owed to the claimants (or Vman). It follows that I do not need to resolve any dispute about the amount of the security deposit that remains unpaid. Other points

64. I have set out above the main points that Mr Uddin developed orally at the hearing. His skeleton argument added some others, which I can address briefly: i) Although FlyBig accepts that the rights under the sub-lease are governed by English law, Mr Uddin submitted that Indian law might be relevant because any judgment would or might be enforced in India. That is manifestly not correct. The fact that the judgment may be subject to enforcement proceedings in India (which will, of course, be a matter for the Indian courts) does not make Indian law relevant to the merits. Nor has FlyBig deployed any evidence of Indian law, either in Mr McAllister’s witness statement or in the additional evidence that FlyBig wanted to rely on at the hearing. ii) Mr Uddin’s skeleton argument submitted that the case raised complex legal issues. Although the sub-lease and security documents are long and intricate documents, I do not consider that any critical issue relevant to the parts of the claim for which summary judgment is sought is complex. The only significantly complex issue among them would be the question whether the assignment is legal or equitable. But since I am satisfied that summary judgment is appropriately granted on either assumption, the complexity of that issue offers no reason for trial. iii) Mr Uddin’s skeleton argument suggested that there might be other evidence available at trial which would significantly affect the position. However, as a placeholder in his skeleton argument made clear (“[Take instructions and set out the nature of the evidence, its source and its relevance to the issues before the court]”), despite the opportunity that FlyBig has had to give instructions to the lawyers who have been acting for it since August, no such information is forthcoming, and there is—in the light of HHJ Pelling KC’s order, no good reason to allow FlyBig further time to search for such an issue. To meet an application for summary judgment, the defendant must be able to say something more concrete than merely that something might turn up. iv) Mr Uddin submitted that there was some other reason for trial, even if there did not appear (at the moment) to be any reasonable prospect of successfully defending the parts of the claim for which summary judgment is sought. He gave four reasons. First, the amount at issue, of more than USD 900,000. That sum—far from unusual in this court—is no reason for a trial if there is no realistically arguable defence. Second, the background in “Indian law, tax, and aviation regulation”. He has, however, identified no issue of Indian law (which is not the law of the case), or tax law, or aviation regulation that bears on the recoverability of the sums for which summary judgment is claimed, whether or not those matters may have some general relevance to the background or the rest of the case. These are straightforward contractual claims admittedly governed by English law. Third, the “live factual disputes on quantum, termination, and assignment”. For the reasons I have given, there are no “live factual disputes” on those issues which give rise to any reasonable prospect of defending the claim, and they offer no compelling reason for trial. Fourth, the fact that the claimants seek judgment for enforcement abroad, which is said to “heighten the need for a full evidential process”. I do not agree. There has been a “full evidential process”, for FlyBig has had every opportunity to put forward any evidence that it thinks would show that it had a reasonable prospect of defending this claim. That it has, despite that opportunity, not been able to do so does not speak to any unfairness or superficiality in the process, but to the clear conclusion that—so far as the simple quantified claims with which this application is concerned—no amount of stone-turning has a reasonable prospect of identifying a colourable defence. Mr Uddin submitted that it is “not necessary for a defendant in a summary judgment application to advance the whole of their case … but they must raise enough evidence to raise a real prospect of having some sort of defence”. I do not disagree. But FlyBig has not done even that. Conclusion

65. For the reasons I have given, FlyBig has not identified any defence to the claims for which summary judgment is sought that has a realistic prospect of success, nor any other compelling reason for trial. The claimants are entitled to summary judgment on those claims, with interest.

66. So far as costs are concerned, the claimants claim their costs pursuant to the indemnity provisions of the agreement. In those circumstances, the question for the court is one of causation, since I am not assessing whether costs are reasonable or proportionate for the purpose of recovery under the CPR. Mr Uddin’s points—in particular as to the rates charged by the claimants’ solicitors—which might have had force if I had been carrying out a summary assessment on a standard basis, are therefore not relevant. In my judgment the claimants are contractually entitled to those costs.

67. I shall hear counsel, if necessary, as to the form of my order.