FW Aviation (Holdings) 1 Limited v VietJet Aviation Joint Stock Company

In a JOLCO aircraft sub-lease, termination and return provisions do not necessarily form an exclusive code of remedies. A liquidated sum fixes recovery for the particular loss and period it addresses, but other indemnities may cover distinct losses. A general indemnity covering matters such as aircraft condition, maintenance, export and re-registration can extend to direct first-party costs. Broad wording referring to direct and indirect loss does not require proximate causation. A return-condition indemnity permits recovery of reasonable costs actually incurred, not hypothetical costs. An assignee’s recovery remains limited to the capacity in which it acquired the contractual rights. Post-redelivery lost rent was recoverable for the NEO aircraft, but not pre-redelivery rent governed by the liquidated remedy or losses claimed only as an owner in relation to the CEO aircraft.

FW Aviation (Holdings) 1 Limited v VietJet Aviation Joint Stock Company was the third trial in litigation concerning the termination of four aircraft leases. Liability had been determined in the first judgment, [2024] EWHC 1945 (Comm), with an unsuccessful appeal in [2025] EWCA Civ 783. A first quantum judgment followed in [2025] EWHC 928 (Comm).

At this trial, FWA claimed repair, maintenance, storage, export, re-registration, lost-rental and enforcement losses under several contractual indemnities, together with alternative conversion and mesne-profit claims. VietJet counterclaimed for the use of engine stands. The central issues concerned the construction and interaction of the termination, return and indemnity provisions, FWA’s capacity as assignee and owner, the causes of delay in exporting the aircraft, and the recoverability and reasonableness of the claimed losses.

1. Disposition. FWA succeeded in part, principally in relation to the NEO aircraft. It recovered qualifying incurred costs, an alternative diminution-in-value claim, specified storage, maintenance, re-registration, insurance and flight costs, and lost rent after redelivery. Most CEO claims failed because FWA was enforcing clause 23.1 only as successor or affiliate of a Financing Party, not as owner or Sub-Lessor. The enforcement-cost claim failed for want of proof. The conversion claims failed, and VietJet’s counterclaim was dismissed for circuity of action.
2. Contractual scheme. Applying the unitary approach in Wood v Capita [2017] AC 1173 and Bunge SA v Nidera BV [2015] UKSC 43, clauses 19 and 20 did not create an exclusive code of every remedy following default and termination. Other indemnities could cover distinct losses. However, where those clauses fixed a liquidated amount for a particular head of loss and period, that amount was exclusive for that loss. Clause 23.1 was not limited to third-party claims. It covered direct first-party costs and losses, and its wording did not require proximate cause.
3. Capacity and export. FWA could recover under the CEO agreements only for loss suffered in its Financing Party capacity. Its later ownership of the aircraft did not enlarge its assigned contractual rights. Under the Cape Town Convention, the Protocol on Matters Specific to Aircraft Equipment and the International Interests in Aircraft Equipment (Cape Town Convention) Regulations 2015, the IDERA machinery required administrative co-operation and did not itself require an export certificate of airworthiness from the exporting authority where the receiving registry did not require one. FWA’s deregistration, re-registration and flight-ready maintenance decisions were reasonable; the resulting NEO losses fell within clause 23.1.
4. Return condition. Clause 20.4 permitted recovery only of costs actually incurred in putting the NEO aircraft into the Return Condition. The costs had to be reasonable in amount, but the reasonableness requirement did not permit rejection of work required by the contractual Return Condition merely because it was commercially unnecessary or added no value. Where work was not carried out, FWA’s alternative remedy was diminution in value.
5. Other claims. Clause 20.7 was not an exclusive storage remedy. Clause 20.4(c) fixed the remedy for lost use or rent between termination and redelivery, preventing a second claim for that period, but did not bar post-redelivery NEO lost-rent claims under clause 23.1. A claimant in conversion must prove possession or an immediate superior right to possession and consequential loss. FWA’s right to take possession did not establish a continuing right to exploit the aircraft or prove the claimed loss. The parties were directed to agree the remaining calculations, with unresolved calculations, interest, costs and consequential matters reserved for further determination.

1. High Court (Commercial Court): liability determined in [2024] EWHC 1945 (Comm) .
2. Court of Appeal: appeal from the liability judgment unsuccessful, [2025] EWCA Civ 783 .
3. High Court (Commercial Court): first quantum judgment, [2025] EWHC 928 (Comm) .
4. High Court (Commercial Court): the present third-trial judgment, [2026] EWHC 1996 (Comm) , determined the remaining claims and counterclaim, subject to further calculations and consequential orders.