This judgment was handed down remotely at 10.00am on 6 August 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Mr David Railton KC:
- This is an application by the Second Claimant ("TUI BEL") and the Third Claimant ("TUI NED") against the Second Defendant ("SLX EST") and the Third Defendant ("SLX LAT") for summary judgment in respect of sums said to be due in respect of the business dealings between them in the period 2022 to 2024.
- The Claimants are airlines, and the Defendants operate airline flights. From 2022 to 2024 the Defendants provided the Claimants with aircraft for each summer season, broadly on the basis that the Defendants, as lessors, provided the aircraft, crew, maintenance and insurance.
- The arrangements between the parties were governed by a set of contracts, in particular:
(1) the Aircraft Supply Agreement dated 10 February 2022 (the "ASA");
(2) the Aircraft ACMI Common Terms Agreement dated 10 February 2022 (the "CTA"), which includes at Annex D the ACMI Service Level Agreement ("SLA"); and
(3) the individual Aircraft Specific Lease Agreements ("ASLAs") for each aircraft leased to the Claimants.
- There are five aircraft relevant to the present application. Out of these, four were leased by SLX EST to TUI BEL, and one was leased by SLX LAT to TUI NED. Each lease relates to the Summer season 2024, with the relevant ASLAs ending on 30 September 2024 or 6 October 2024.
- In addition to the claims which are the subject of the present application for summary judgment, there are other claims in the present action by the First Claimant ("TUI AIR") and TUI BEL against the First Defendant ("SLX MAL"). SLX MAL has not yet been served, and takes no part in these proceedings, and TUI AIR is not a party to the present application.
- The test for summary judgment is well known, and is not in dispute. The principles have recently been conveniently summarised by Nicklin J in Amersi v Leslie [2023] EWHC 1368 (KB) at [142]. The central question is whether the defendant has a realistic, as opposed to fanciful, prospect of successfully defending the claim.
- The detailed formulation and quantification of the claims by TUI BEL and TUI NED has varied during the course of the present application. As presented at the hearing of the application it consisted of essentially five elements:
(1) Deposit: under Clause 8.1 of the CTA, and Annex A, Clause 3.1, TUI NED paid SLX LAT a cash deposit of €400,000 in respect of aircraft YL-LCT, which was repayable at the end of the relevant lease. This element of the claim is not in dispute, and a credit note was issued by SLX LAT to TUI NED in respect of it on 30 November 2024.
(2) Block Hours reconciliation: under each ASLA the Claimants agreed to pay for a certain minimum number of hours utilisation of each aircraft (referred to as 'Minimum Guaranteed Block Hours'). The rent paid under each lease covered those minimum hours. If it turned out that the aircraft could not in fact fly when required, for example because of mechanical failure, or the absence of crew, the minimum hours would be reduced; equally if the aircraft flew more than the minimum, the relevant Claimant would be liable to make an excess payment to the relevant Defendant. It was accordingly necessary at the end of each lease for there to be a reconciliation of the amounts payable each way, as recognised by CTA Annex A, clauses 1.4 and 2.2. TUI BEL claims that it is owed €373,441.77 from SLX EST in respect of this reconciliation (inclusive of the €86,060.52 referred to below), and TUI NED claimed €21,843.18 (since reduced, as referred to below, to €21,709) from SLX LAT.
(3) Block Hours Utilisation Compensation: in the circumstances set out in Clause 8 of the ASA, it is possible for the Claimants to offset excess utilisation in respect of one aircraft (i.e. an excess over the minimum guaranteed hours) against an under utilisation on another aircraft. TUI BEL claims that it is entitled to an offset between two of the aircraft it leased from SLX EST, resulting in a claim for €86,060.52.
(4) SLA claims: the service level terms set out in Annex D to the CTA provide for various remedies if there were issues with the Defendants' performance, including fixed sums payable, e.g., for delays, or aircraft unavailability. This again required a determination at the end of the lease period of any amount payable. TUI BEL claims €603,535 from SLX EST in respect of these claims, and TUI NED claims €75,375 from SLX LAT.
(5) Costs: Clauses 20.7 and 20.8 of the CTA provide for indemnities to be paid by the Lessor to the Lessee (and by the Lessee to the Lessor) including in respect of reasonable legal costs incurred in connection with the enforcement or preservation of rights under the ASLAs. To the date of the issue of the Claim Form the costs incurred by the Claimants are said to be £36,000. An indemnity is sought in respect of them and further legal costs incurred until judgment.
The draft amendments
- In order to reflect fully the above claims in the Particulars of Claim, TUI BEL and TUI NED indicated at the hearing on 24 July 2025 that they intended to amend their pleading. In accordance with directions given by me at the hearing, on 25 July 2025 the Claimants provided a draft Amended Particulars of Claim. SLX EST and SLX LAT made short written submissions in respect of the draft on 29 July, to which the Claimants responded by further short written submissions on 30 July 2025.
- Save for a reduction (of €134.18) in the amount claimed by TUI NED from SLX LAT in respect of the Block Hours reconciliation (reducing that claim from €21,843.18 to €21,709), the draft amendments reflect the revisions made by TUI BEL and TUI NED at and before the hearing on 24 July 2025 to their claims against SLX EST and SLX LAT for which summary judgment is sought. I do not understand SLX EST or SLX LAT to object to these amendments to those claims. As they recognise, there is no prejudice to them in dealing now with those claims as reformulated in the amended pleading, which represents the claims as advanced in the last round of evidence adduced by TUI BEL and TUI NED, and addressed by them at the hearing. I accordingly give permission for these amendments.
- In addition to the amendments to the claims for which summary judgment is sought, the draft amended Particulars of Claim also seek to introduce amendments to claims, and new claims, against SLX MAL and SLX EST by TUI AIR and TUI BEL. As referred to above, TUI AIR is not a party to the application for summary judgment, and SLX MAL has not yet been served with the proceedings. In view of the latter point, it is said by SLX EST and SLX LAT that no amendment should be permitted against SLX MAL at this stage. It is also said that TUI AIR and TUI BEL should not be permitted to introduce an express claim against SLX MAL and/or SLX EST in respect of a 'LEAV' invoice (referred to below) which had originally formed part of the Block Hours claim. SLX EST however proposes that the constructive and proportionate way for these amendments to proceed is for them to be permitted against it (but not SLX MAL, for the reasons set out above), for it to plead back to them by its Defence and Counterclaim, and for it and SLX LAT to be permitted to bring counterclaims within the current proceedings.
- I do not consider that the fact that SLX MAL has not yet been served with the proceedings is a reason for not allowing the proposed amendments in respect of the claims against it. Indeed, pursuant to CPR 17.1, a party can amend its statement of case before service without permission. As to the amendments against SLX EST, I do not understand it to suggest that there is any prejudice to it in the amendments being made now in respect of claims for which summary judgment is not currently being sought. In so far as it is suggested that there may be prejudice if it or SLX LAT cannot bring counterclaims in the present proceedings, the Claimants have confirmed (in the further submissions made on 30 July 2025) that they will not object to SLX EST or SLX LAT bringing counterclaims in the present proceedings, even if summary judgment is entered against them. In so far as permission is needed, I therefore grant permission for these further amendments as well. All questions of costs in respect of the amendments (if not agreed) shall be addressed with other matters consequential to this judgment.
The claims made
- As will be apparent from what follows, there is now a large measure of agreement between the parties as to the figures claimed by way of summary judgment. SLX EST and SLX LAT however assert a number of defences to those claims, which defences comprise particular points in respect of individual heads of claim, and also defences of set off in respect of other related sums which they say are owed to them by TUI BEL or TUI NED, or which they say should in any event be taken into account in considering the present claims. In so far as they are not able to rely on set off, they assert cross claims, and contend that there should be a stay of execution in respect of any judgment which TUI BEL or TUI NED might otherwise be granted until those cross claims have been resolved.
- In addressing the matters arising, I consider first the four disputed heads of claim made by TUI BEL and TUI NED (i.e., Block Hours reconciliation, Block Hours Utilisation Compensation, SLA Claims and Costs), and then consider SLX EST's and SLX LAT's arguments that they have a defence by way of set off, or that there should be a stay pending the determination of their intimated cross claims.
Block Hours reconciliation
- As referred to above, TUI BEL claims €373,441.77 from SLX EST in respect of this reconciliation (inclusive of Block Hours Utilisation Compensation of €86,060.52), and TUI NED claims €21,709 from SLX LAT.
- As explained by Mr Martens on behalf of TUI BEL and TUI NED in paragraphs 11 and 12 of his witness statement dated 11 July 2025, the underlying figures in relation to the claim by TUI BEL against SLX EST are taken from the Defendants' spreadsheet sent to the Claimants on 25 November 2024. I do not understand them to be in dispute. Similarly in relation to the sum claimed by TUI NED from SLX LAT. As explained in paragraph 14 of Mr Martens' statement, this derives from an original agreed figure of €177,383.67, against which TUI NED originally gave credit for invoices totalling €2,781 and €28,258.49 from SLX LAT to TUI NED (amounting in total to €31,039.49), and a further invoice of €124,501 from SLX EST to TUI NED. At the time of the hearing TUI NED's claim under this head accordingly amounted to €21,843.18.
- By the draft amended Particulars of Claim TUI NED increased the total of the invoices from SLX LAT to it for which it was giving credit to €31,173.67, as itemised in Schedule 3 to the draft. While the difference has not been explained to me, there has been no objection to this revised figure from SLX LAT, and I therefore proceed on the basis that the revised figure is the correct one, and the appropriate amount of this claim is €21,709.
- By way of response to these claims, SLX EST and SLX LAT make the initial point that the claims originally pleaded in the Particulars of Claim were defective, and have not been supported. In particular, they point out that the original claim by TUI BEL was for a greater sum, and included (it now appears) a claim for the 'LEAV' invoice arising under a different agreement (now pleaded separately in the revisions to the Particulars of Claim), while giving credit for a number of other invoices which were not (and have not been) fully specified. Further, the pleaded claim by TUI NED was not explained until Mr Martens' reply evidence.
- There is some force in these criticisms of the original pleading, which was the basis for the summary judgment application. The full underlying position is however now apparent, and SLX EST and SLX LAT accept that they are not prejudiced in dealing with it now. Where there is in fact now agreement with the underlying figures, I do not consider that the background provides a defence to the claim as now formulated.
- By way of further response to these claims, SLX EST and SLX LAT contend that it was an express term within Clauses 8 and 21 of the ASA, or an implied term of each ASLA, that the parties would reasonably cooperate to facilitate all aspects of a Block Hours reconciliation. It is said that there is a real prospect of succeeding on a defence that such term was breached because of the way in which the claim has been presented from mid-November 2024, until the reply evidence served by Mr Martens. It is said that such conduct prevented the parties from completing the reconciliation.
- Even if there were such a term within the ASA, or implied within each ASLA (which I do not need to decide), I do not consider that this gives rise to a defence to the claim which is in respect of figures which are in fact agreed, and the product of the reconciliation process between the parties. I did not understand SLX EST or SLX LAT to be suggesting that they have suffered any loss (other than potentially in relation to costs) as a result of the way in which the claim has been presented.
- SLX EST and SLX LAT also contend that there was an implied term of the ASA that payment in respect of any adjustment in respect of Minimum Guaranteed Block Hours only fell due in a reasonable period following completion of the reconciliation. They contend that as there was no completion of reconciliation between the parties no amount could fall due. Even if such a term were to be implied (which again I do not need to decide), in circumstances where the amounts have been agreed, I do not consider that this gives rise to a defence to this aspect of the claim.
- While I do not consider that the above matters give rise to a defence to the claims now made, whether or to what extent they may be relevant to questions of interest or costs (on which I have not yet heard argument) will, if not agreed, be a matter for separate submissions consequential to this judgment. Similar considerations apply to the other heads of claim addressed in this judgment: all matters of interest and costs (if not agreed) are reserved.
Block Hours Utilisation Compensation
- The parties agree that if a sum is payable in respect of Block Hours Utilisation Compensation, the sum payable is €86,060.52. There is however a dispute as to whether it is payable at all. SLX EST contends that under the terms of the ASA there is a procedural notification requirement which required TUI BEL to notify SLX EST within a specified time, and that such notice (if given) would have to comply with a specified procedure. It is said that these provisions were not complied with, and as a result the claim by TUI BEL fails.
- The particular terms relied on by SLX EST are Clause 8.2 and 21 of the ASA. These provide (so far as relevant) as follows:
(1) Clause 8.2: "At the end of each Contracted Period, TUI shall inform Smart Lynx if it elects to proceed with the Block Hour Utilization Compensation. The Block Hour Utilization Compensation shall be effected at the latest one month after the end of the relevant Contracted Period".
(2) Clause 21.1: "All notices, requests, demands and other communications required or permitted by the terms of this Aircraft Supply Agreement to be given to either Party shall (unless otherwise specified) be given by any one of the following means: personal delivery, express delivery, e-mail to the address and numbers given Below or at such other address or number the recipient may have notified at least fifteen (15) calendar days in advance to the other Party in writing".
(3) Clause 21.2: "SmartLynx's address:
- SmartLynx address: Mazrudas, Marupe municipality, LV-21-67, Lativia
- Phone: +371 67207392 +371 67207398
- Email: [Mr Edvinas Demenius' corporate email address]; info@smartlynx.aero
- Represented by VP Sales & Development Edvinas Dememius".
- In relation to Clause 8.2, any claim for Block Hour Utilization Compensation would only be possible once it is known what the relevant hours were for each relevant aircraft. It is likely that the Claimants kept their own records, and would be able to make their own assessment promptly at the end of each lease as to whether a claim would be likely to arise. But the agreement envisages that there would be a process of reconciliation in relation to the hours flown. Clause 2.2 of CTA Annex A in terms refers to a preliminary reconciliation within 15 days of the Redelivery Date, with final reconciliation one month after the end of each lease pursuant to Clause 8 of the ASA.
- The process of reconciliation did indeed take place, albeit later than envisaged by the agreement, with the Defendants providing details of the relevant hours to TUI BEL on 25 November 2024, and TUI BEL notifying SLX EST within 3 days that it considered that compensation should apply. SLX EST did not consider that it was barred from seeking payment in respect of excess hours outside the period referred to in Clause 2.2. I do not consider that the time periods within Clause 8 of the agreement are to be construed as conditions to the underlying claims by either party, or bar those underlying claims should they not be met. The requirement in Clause 8.2 that the compensation should be effected within one month is directed to the intended timing of the payment of compensation, and does not bar any claim to compensation if not made within that period. In my view much clearer language would be necessary to produce that result.
- In circumstances where the claim to compensation was not (in my view) barred by its timing, and where the figures have in fact been agreed as a result of a reconciliation between the parties, I do not consider that the related point that TUI BEL failed to give formal notice of its compensation claim in accordance with the provisions of Clause 21 of the ASA takes matters any further. TUI BEL in fact engaged with the individuals dealing with block hours issues at the Defendants (one of whom in any event appears to have been the individual identified as the point of contact for operational issues under Clause 4.2.1 of the ASLAs between TUI BEL and SLX EST), and there is no suggestion that SLX EST was not in fact aware of the claim.
SLA claims
- TUI BEL claims €603,535 from SLX EST in respect of these claims, and TUI NED claims €75,375 from SLX LAT. The presentation of these claims has been complicated by reason of the Claimants originally claiming in the Particulars of Claim the full amount of them, totalling €1,528,025 (including sums said to be due to TUI AIR) from SLX EST. This total has now been broken down to its constituent elements, and the individual sums claimed by each of TUI BEL and TUI NED are pursued separately. The claim that the full sum can be recovered from SLX EST is no longer pursued.
- There is, as I understand it, no dispute as to the figures. The total of €1,528,025 was agreed as part of a reconciliation exercise described by Mr Martens in paragraphs 17 to 23 of his witness statement. The breakdown as between the different Claimants is a matter of calculation, as set out in paragraph 25 of Mr Martens' statement, the accuracy of which is not disputed.
- SLX EST and SLX LAT do however contend that it was an implied term of the CTA that TUI BEL and TUI NED would cooperate reasonably in the reconciliation of sums due under Annex D of the CTA, which it is alleged that TUI BEL and TUI NED were in breach of by demanding payment of the full amount from SLX EST, and not providing adequate supporting documentation. In circumstances where the figures were in fact agreed as part of the reconciliation process, I do not consider that this gives rise to a defence to this aspect of the claim.
- SLX EST and SLX LAT further contend that there was an implied term under the ASLAs that no sum would be payable by any Defendant to the Claimants under Annex D to the CTA until after "(1) the parties had reached agreement on such sum (such agreement not to be unreasonably withheld by either party) and (2) a further reasonable period had passed within which payment may be made; or alternatively only step (1)". I do not consider that there is scope for such a term to be implied, which would not seem to be necessary, or viable (including that it might lead to deadlock if two reasonable but different positions were held). But again, in circumstances where the underlying figures have in fact been agreed, I do not consider that this gives rise to a defence to this aspect of the claim.
Costs
- Both TUI BEL and TUI NED (on the one hand) and SLX EST and SLX LAT (on the other) rely on the provisions in Clauses 20.7 and 20.8 of the CTA as the basis for claiming an indemnity against each other in respect of the reasonable costs they have incurred, and will incur, in pursuing and defending their respective claims. They have however both agreed that the practical way in which this should be dealt with is through the Court making in due course such orders for costs as it considers appropriate, and for those costs then being assessed, if not agreed. The parties are also agreed that the basis of any such assessment should be the indemnity (as opposed to standard) basis.
Set off
- Clause 2.1 of Annex A to the CTA provides as follows:
"2.1.3. All payments shall be made without deduction or withholding and in immediately EUR.
2.1.4. All payments shall be deemed to have been made on the date on which they are received in Lessor's or Lessee's bank account as applicable.
2.1.5. Any set off or deduction is subject to written consent of Lessor and Lessee."
- It is not disputed that such clauses are in principle enforceable. As stated in Cargill International Trading v Uttam Galva Steels [2018] EWHC 2977 (Comm) at §18: "The purpose of such clauses is to ensure that sums which are otherwise due remain immediately due and payable notwithstanding that there may be other disputes between the parties; see Credit Suisse International v Ramot Plana OOD [2010] EWHC 2759 (Comm) at paragraph 43 per Hamblen J." Under the terms of the Clause any set off needs the written consent of both parties. The provisions of the CTA, including Clause 2.1 of Annex A, are incorporated into each of the ASLAs (see Clause 2.1 of the ASLA).
- There is only one set off (or group of set offs) in respect of which SLX EST say that written consent has been given by both parties. This is in respect of the sum of €141,168.02 which TUI BEL gave credit for in the calculations underlying the original claim at paragraph 41.2 of the Particulars of Claim, i.e. the claim for €555,902.63 in respect of TUI BEL's Block Hours reconciliation claim against SLX EST. It appears from Mr Martens' statement and further reconciliation work carried out by SLX EST that the credit applied of €141,168.02 consisted of three elements: (i) €37,609.38 in respect of invoices from SLX EST to TUI BEL; (ii) €21,840.15 in respect of invoices from SLX MAL to TUI BEL, and (iii) an unexplained balance of €81,178.
- I do not consider that it is right to say (within the meaning of Clause 2.1.5) that there has been the written consent of the relevant Claimants and Defendants that these amounts should be set off against the amounts claimed. The position is that the Claimants offered to give credit for these sums, but then resiled from that offer in the context of the claims for the pleaded amounts no longer being pursued, and being replaced by the lower sums referred to above. I do however accept that the fact that TUI BEL was willing to give credit for these amounts indicates that there is a claim with realistic prospects of success that the amounts are due from the relevant Claimant to the relevant Defendant.
- The other amounts which SLX EST or SLX LAT seek to set off, or raise by way of cross claim, are those set out in the Annex to the witness statement of Mr Adamaitis. This Annex summarises at the start the amounts said to be due to the individual Defendants from the individual Claimants, which are then detailed in the following pages. On the information provided to me there would seem to be a claim with realistic prospects of success that these sums are payable by the relevant Defendant to the relevant Claimant, and I did not understand TUI BEL or TUI NED to be suggesting otherwise.
- The relevant figures for present purposes set out in Mr Adamaitis's Annex are (i) €111,976.15 said to be owed by TUI BEL to SLX EST; (ii) €32,638.23 said to be owed by TUI NED to SLX LAT; (iii) €143,812.31 said to be owed by TUI NED to SLX EST, and (iv) €339,150.41 said to be owed by TUI AIR to SLX EST. According to the Annex there is no sum said to be owed by TUI BEL to SLX LAT. I have not been provided with a reconciliation between these sums and the sums comprising the €141,168.02 referred to above, but I understand that the amounts identified in Mr Adamaitis's Annex include all sums said to be owed to the Claimants by the Defendants, and that therefore they would include the €141,168.02 as appropriate.
- In the absence of written consent that these sums should be set off, I do not consider that any of these sums can be set off by way of defence to the present claims of TUI BEL and TUI NED. I do not however consider that Clause 2.1 of Annex A to the CTA prevents SLX EST or SLX LAT from seeking a stay of execution against the relevant Claimant in respect of any sum (up to the amount of the prospective cross claim) for which judgment is given against them. While the purpose of the Clause is to facilitate immediate payment of sums owing, it does not in terms prevent a stay of execution. In any event, the Clause does not exclude the Court's power to stay in appropriate cases (albeit the terms of the agreement between the parties, and the purpose behind it, are relevant to the exercise of the Court's discretion).
- In my view, in all the circumstances, it would be appropriate to grant a stay of execution in respect of claims by TUI BEL or TUI NED where there are cross claims with realistic prospects of success against them by SLX EST or SLX LAT. Such a stay would be only in respect of the amount of the relevant cross claim, and would be subject to the relevant Defendant pursuing its cross claim(s) with due expedition, with liberty to the relevant Claimant to apply should it not do so. The primary reason why it is in my view appropriate for such a stay to be granted is because it appears from the information before me that the overall business between the parties has been conducted on the basis that there would ultimately be an overall reconciliation between each contracting party of sums going both ways between them. In the normal course, it would be expected that the claims and cross claims would be resolved at the same time.
- As to the amounts in respect of which a stay should be granted:
(1) There should be a stay in respect of the €111,976.15 said to be owed by TUI BEL to SLX EST.
(2) There is no need for a stay in respect of the €32,638.23 said to be owed by TUI NED to SLX LAT: credit has been given for this sum by TUI NED in its claim against SLX LAT in the amendments to the Particulars of Claim for which I have given permission.
(3) I do not consider that there should be a stay in respect of the €143,812.31 said to be owed by TUI NED to SLX EST. This is because there is no identity of parties in respect of this claim, i.e. the only claim against SLX EST is by TUI BEL, and there is no claim by TUI NED against SLX EST. As a result the cross claim, if ultimately successful, would not reduce the liability of SLX EST to TUI NED (as there is none). The mere fact that the Claimant and Defendant companies are each part of groups which traded with each other is not, in my view, in the circumstances, a sufficient reason to stay the execution of a judgment against a different legal entity. I would however note that of this sum of €143,812.31, credit has in fact been given by TUI NED in its claim against SLX LAT for €124,501, being a sum accepted as being due by TUI NED to SLX EST. There is, as I understand it, no suggestion by SLX EST that this does not amount to a good discharge of that debt.
(4) For similar reasons as set out above, I do not consider that there should be a stay in respect of the €339,150.41 said to be owed by TUI AIR to SLX EST. TUI AIR is not a party to this application, and there is no question of there being a judgment in its favour at this stage against SLX EST in respect of which a stay could operate.
(5) I do not consider that there should be any stay in respect of costs payable under the indemnity provisions. As referred to above, it has been agreed that these are to be dealt with through the Court making in due course appropriate orders for costs, and those costs then being assessed on an indemnity basis, if not agreed. I accept that this may lead ultimately to costs orders going both ways, but I do not consider that there should be a stay in respect of any current costs liability which may be ordered in favour of TUI BEL or TUI NED by reason of costs estimated to be incurred in future, by SLX EST or SLX LAT, in pursuit of their cross claims. Any such potential cross liability is at best uncertain.
Conclusions
- In conclusion:
(1) There should be judgment for TUI BEL against SLX EST in the sum of €976,976.77 (being €373,441.77 in respect of Block Hours reconciliation, including Block Hours Utilisation Compensation, and €603,535.00 in respect of SLA Claims), with a stay in respect of the sum of €111,976.15.
(2) There should be judgment for TUI NED against SLX LAT in the sum of €497,084 (being €400,000 in respect of the Deposit, €21,709 in respect of Block Hours reconciliation, and €75,375 in respect of SLA Claims).
- I am grateful to the legal teams on both sides for their submissions in this matter, and I would ask them to draw up a draft Order (agreed as far as possible) reflecting this judgment.
