Vietjet Aviation Joint Stock Company (Appellant) v FW Aviation (Holdings) 1 Limited (Respondent)

Permission to Appeal application lodged

Case summary
Permission to Appeal
Previous proceedings

Case summary

Case ID

UKSC/2025/0151

Parties

Appellant(s)

VIETJET AVIATION JOINT STOCK COMPANY

Respondent(s)

FW AVIATION (HOLDINGS) 1 LIMITED

Issue

Is the Respondent a “financial institution” capable of being assigned loans and security rights within the terms of this loan agreement?

Facts

This is a dispute concerning the purchase and lease of four Airbus A321 passenger aircraft. The appellant, VietJet Aviation Joint Stock Company (“VietJet”) is a Vietnamese airline. The Respondent, FitzWalter Aviation (Holdings) 1 Limited (“FWA”), is a Jersey registered company headquartered in the UK. In 2018 and 2019, the four aircraft in question were purchased under financing arrangements known as JOLCO (Japanese Operating Lease with Call Option). The purchase of the aircraft was funded by a combination of Japanese equity investors (the Owners) and loans from commercial banks (the Lenders). The aircraft were then leased to VietJet, who operated the aircraft. The debts of the Owners to the Lenders are secured through a mortgage over the aircraft and transfer of the debts to security trustees. The security trustees hold the security interests (the mortgage) for the Lenders and can enforce the security in the event of non-payment. Within the Loan Agreement, there was provision that these security rights held by the security trustees could only be passed to “financial institutions”. In 2021, VietJet fell behind on rental payments due to Covid restrictions. In response, in October 2021, the Lenders sold their positions to Fitzwalter Capital Partners (Financial Trading Limited) (“FWC”). This was a newly registered English company within the Fitzwalter Capital group, which was incorporated for the purpose of buying this debt (known as a ‘vulture fund’). In November 2021, the security trustees resigned and purported to transfer their rights as security trustees to FWC. FWC then purported to assign the loans and security rights to FWA. FWA then exercised the security rights and sold the four aircraft to different Fitzwalter entities. On 26 August 2022, FWA commenced proceedings in the High Court against VietJet. They sought possession of the aircraft and payment of various sums under the lease agreements. These payments included unpaid rent of approximately US$8 million and termination payments totalling approximately US$181.5 million. The trial was split into three. In the first trial, the High Court found that the leases had been validly terminated, and the loans and security interests validly assigned to FWA. VietJet were therefore liable to pay the sums sought by FWA. A second trial was held to determine the amount owed under this liability, and a third trial will be held in March 2026 to determine further claims for damages. The decision on the first trial, concerning liability, was appealed to the Court of Appeal. One of the grounds of appeal, amongst others, was whether FWC and FWA constituted a “financial institution” in the terms of the loan agreements. If not, the assignation of the loans and security rights would not be valid and FWA were not entitled to enforce these debts. The Court of Appeal dismissed the appeal on all grounds. The Court of Appeal considered that the interpretation of the term “financial institution” by the High Court was correct, and so the assignations were valid. VietJet now appeals this decision to the Supreme Court.