The English Court of Appeal confirms the effectiveness of Certificates of Acceptance in aircraft leasing transactions

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The Court of Appeal’s recent decision in Olympic Airlines SA (in special liquidation) v ACG Acquisition XX LLC [2013] EWCA Civ 369 gives welcome comfort to lessors that properly drafted Certificates of Acceptance will provide an effective defence to claims that a leased aircraft did not meet the contractually agreed specifications.

Background -

In 2008 ACG, a major aircraft leasing company, leased a Boeing 737 to Olympic Airlines, the now-liquidated Greek flag carrier. As is usual industry practice, the aircraft was delivered to Olympic from the previous lessee following maintenance checks. Once the aircraft entered service it became clear that it had numerous defects and its airworthiness certificate was withdrawn. Olympic stopped making payments on the lease and ACG claimed against Olympic in the English courts. Olympic’s response was to counter-claim against ACG...

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