Aircraft leasing company stymied by Foreign Sovereign Immunities Act

October 25, 2006

BCI Aircraft Leasing, Inc. v. Republic of Ghana and Ghana Airways Ltd. (N.D. Ill. Oct. 13, 2006).  BCI, an Illinois company, leased two DC-10 aircraft to Ghana Airways, which is wholly owned by the government of Ghana.  Ghana Airways defaulted on its lease payment obligations, but the government of Ghana repeatedly promised that it would pay the airline’s debts, which exceeded $5 million.

After payment was not made, BCI sued the Republic of Ghana and Ghana Airways in an Illinois federal court.  The defendants moved to dismiss the case under the Foreign Sovereign Immunities Act.  Under that Act, a U.S. court can only obtain jurisdiction over a foreign state if it engaged in commercial activities that bear a significant relation to the U.S. 

The court held that the Republic of Ghana engaged in commercial activities by guaranteeing the airline’s debts but that such activities neither occurred, nor had a direct effect, in the U.S.  Thus, the court dismissed the case on the grounds that the defendants had immunity under the FSIA.

Ouch!


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