FW Aviation (Holdings) 1 Ltd v VietJet Aviation Joint Stock Company [2025] EWHC 928 (Comm) (17 April 2025)

Executive Summary

FW Aviation (Holdings) 1 Ltd ("FWA") succeeded in its claim against VietJet Aviation Joint Stock Company ("VietJet") regarding four aircraft leased under Japanese Operating Lease with Call Option (JOLCO) arrangements.
The current judgment addresses unresolved quantum issues, including VietJet’s liability to pay termination sums totaling approximately US$164.8 million and related claims under the Sub-Leases.
VietJet disputes these claims, arguing no contractual right for FWA to possession or export of the aircraft, and contests payment obligations post-sale of aircraft to third-party Trustee Owners.
The case involves complex lease structures with Japanese investors holding equity and banks holding debt, with security interests governed under New York law and the Cape Town Convention.

Sanctions implications arise due to the involvement of multiple jurisdictions and international financial arrangements (matched: bis).
The aircraft transactions and ownership structures implicate cross-border regulatory compliance, particularly concerning export controls and asset transfers.
FWA’s entitlement to export aircraft may be restricted under international conventions, potentially triggering sanctions or regulatory scrutiny.
The case highlights risks of sanctions exposure when aircraft assets are transferred or repossessed across jurisdictions including Vietnam, Japan, and third-party Trustee Owners.

Potential delays in aircraft export and deregistration may expose parties to contractual penalties or regulatory sanctions.
VietJet’s refusal to recognize FWA’s possession and export rights could lead to protracted litigation and operational disruptions.
The complex ownership and financing structure involving Japanese investors and international lenders increases risk of conflicting claims and enforcement challenges.
Uncertainty over the application of the Cape Town Convention and export eligibility creates legal and compliance risks for asset recovery.

The dispute involves key jurisdictions: United Kingdom (venue), Vietnam (operator and defendant), Japan (investors and lease origin), and indirectly Canada, India, US, and UK through financial and legal frameworks.
The case underscores the geopolitical complexity of aviation asset financing amid evolving international sanctions and export controls.
Cross-border enforcement of judgments and asset repossession may be complicated by differing national laws and geopolitical tensions.
The involvement of multiple Western legal firms and Japanese investors reflects the globalized nature of aircraft leasing and associated geopolitical sensitivities.

The financial stakes are significant, with termination sums exceeding US$160 million and additional claims for rent and breakage costs.
Aircraft leasing under JOLCO structures remains a critical financing mechanism, leveraging Japanese tax benefits and international capital markets.
VietJet’s potential liabilities could impact its financial stability and creditworthiness, with knock-on effects on regional aviation markets.
The case highlights the economic risks of lease defaults and asset repossession in a volatile global aviation sector.

Monitor developments in the 2026 trial concerning export delays and culpability to anticipate further financial exposure.
Assess compliance risks related to aircraft export under the Cape Town Convention and applicable sanctions regimes.
Engage with cross-jurisdictional legal experts to navigate enforcement complexities involving Japan, Vietnam, and UK law.
Consider proactive negotiation or settlement to mitigate prolonged litigation costs and operational disruptions.
Review and strengthen due diligence and contractual protections in future JOLCO and international aircraft leasing arrangements.

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**Source Notes:**

Case Title: *Sanctions Intelligence Digest*

Link: https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/928.txt