Tuesday, March 21, 2017

Air India awarded $10mn in Dynamic Airways Hajj dispute

An arbitration proceeding in Delhi, India, has awarded Air India (AI, Mumbai Int'l) INR657.1 million (USD10.06 million) in its case against Dynamic International Airways (2D, Greensboro) concerning a failed Hajj pilgrimage contract.

Air India contracted Dynamic to provide it with India-Saudi Arabia charter capacity in 2013 and 2014. However, problems arose in 2014 when Dynamic allocated four instead of five aircraft to carry out the charter agreement, relying on a clause that Air India would make up the flights that Dynamic didn't undertake. As such, instead of ferrying nearly 72,000 pilgrims, it only transported roughly 47,000.

As a consequence of the inadequate capacity, numerous flights were either delayed or cancelled leading Air India to seek legal recourse.

Dynamic, in turn, filed a counter-suit for INR1.086 billion (USD16.6 million) citing a breach of contract. In the suit, Dynamic alleged Air India did not pay it for the roughly USD8.8 million it was due for the 2013/14 Hajj charter flights while also reneging on two future contracts covering the 2015 and 2016 seasons. Dynamic justified its claims on the grounds that it had already made "substantial" fleet investments by either acquiring or leasing additional aircraft in anticipation of demand.

However, Dynamic's petition to have the dispute heard in the United States and not India was also rejected by a US Federal Court.
21/03/17 ch-aviation