The Federal High Court in Lagos has ruled in favor of Export Development Canada (EDC), a Crown corporation wholly owned by the Government of Canada, allowing it to repossess a CRJ1000 aircraft (registration 5N-JEE, MSN 19037) leased to Arik Air.  

The judgment, delivered on November 27, 2024, by Justice Alexander Oluseyi Owoeye, represents a landmark application of the Cape Town Convention in Nigeria. The court upheld the validity of JEM Leasing Limited's sale of the aircraft to Alberta Aviation Capital in late 2022 and dismissed any objections to the jet’s export.

The decision was first reported by aeronautical data company Ch-aviation on January 2, 2025, and later confirmed by Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo. In a post on his official X page, Keyamo celebrated the ruling, stating, "First victory in court in Nigeria courtesy of the Cape Town Convention. The courts applied the CTC to the fullest and allowed instant repossession of an aircraft.”  

An EDC spokesperson described the ruling as a positive step, noting that the corporation has been exercising its rights as a creditor through the sale of the aircraft by JEM Leasing Limited, its former owner.  

The case was met with resistance from Nigeria’s Economic and Financial Crimes Commission (EFCC), which had been enlisted by some Arik Air shareholders to block the repossession and export of the aircraft. The EFCC argued that JEM Leasing's 2022 sale of the plane was invalid. However, Justice Owoeye ruled that the transaction was lawful and there were no legal grounds to prevent the jet's removal from the country. The aircraft had been deregistered in Nigeria in 2022, but an attempt to repossess it was obstructed by the EFCC in June 2023. This, the court found, violated Article 14 of the Cape Town Convention. The judgment comes in the wake of Nigeria’s September 2024 adoption of new Federal High Court guidelines aimed at enhancing compliance with the Cape Town Convention and its Protocol on International Interests in Mobile Equipment, particularly regarding aircraft. 

The new Practice Directions, signed by Vice-President Senator Kashim Shettima during a Presidential Enabling Business Environment Council (PEBEC) meeting, significantly improved Nigeria’s compliance score under the Cape Town Convention from 49 to 70.5. This boost, acknowledged by the Aviation Working Group (AWG)—co-chaired by Boeing and Airbus—has increased the country’s credibility with lessors and financiers.  

Arik Air, founded in 2006, has faced persistent financial challenges. In February 2017, it was placed under the administration of the Asset Management Corporation of Nigeria (AMCON) due to debts totaling 263 billion naira ($571.32 million), primarily owed to local entities. AMCON was tasked with restructuring the airline and resuming its operations, which it managed to do in 2018.  

AMCON planned to lift its administration of Arik Air by the end of 2024. One proposed strategy involves merging Arik Air with Aero Contractors—Nigeria’s oldest active airline—to form a new national carrier. In August 2024, AMCON’s Managing Director/CEO, Gbenga Alade, described this merger as the “best option” to save the struggling airlines from bankruptcy. Blade states, "Arik owes so much money that they cannot pay.” Citing a $52 million debt to Afreximbank, which the bank insists must be settled, Arik has only offered $8.5 million, which Alade questions the airline’s ability to produce. Afreximbank has since suggested seizing some of Arik’s aircraft engines and equipment as collateral, a move AMCON has resisted.  

Despite these financial woes, Arik Air continues to operate with a fleet of three aircraft: a Boeing 737-700, a 737-800, and a Dash 8-Q400. Plans are underway to expand this fleet to seven planes by February 2025. However, the airline's operations remain precarious. On July 19, 2024, the Lagos High Court ordered the seizure and sale of Arik's aircraft to settle a $2.5 million debt owed to Atlas Petroleum International. Intervention by AMCON and mediation by Minister Festus Keyamo temporarily stayed the order, allowing the airline to continue flights. Arik’s operations had been suspended between July 30 and August 8, 2024, after Keyamo grounded the fleet, but the airline has since resumed service.