Sukhoi Civil Aircraft (SCA) to sue Armavia

 Sukhoi Civil Aircraft (SCA) Company is filing a lawsuit to the International Commercial Arbitration Court against Armavia air carrier, Gazeta.ru reports. 

SCA demands forced fulfillment of the contractual commitments for SSJ-100 No.95007 (Armenia's first SSJ-100) and compensation for the losses caused by termination of the supply contract. Citing a source at the company the paper writes that the lawsuit will be filed within the coming days. The plaintiff's claim totals around $1.385 million, the source is quoted as saying.

As of Dec 31 2012 the air company's debt was 540.708 million roubles ($17.376 million), says the accounting report of SCA for 2012.  The debt accumulated after sale of the SSJ-100 N0.95007 in 2011.

Under the terms of the contract, the liner was mortgaged with SCA until the full price was paid by Armavia. However the carrier failed to pay the full sum for the aircraft and decided to terminate the sales contract and return the aircraft to the manufacturer.  The airline sealed an amendment to the sale contract and returned the airplane to Sukhoi Civil Aircraft. According to  SCA's statement Armavia mortgaged the aircraft to third parties while it was in their possession.

The manufacturer hopes the International Commercial Arbitration Court will help solve the disparities.

"Taking into account the financial state of the Armenian airline and a high probability of its bankruptcy, the prospects for a full implementation of the above-mentioned contract look rather uncertain," SCA statement says. "In case of bankruptcy, the courts in Armenia may seize the aircraft..."

Armavia halted flights on April 1 and launched bankruptcy proceedings. Armavia is owes money to Russian airports, banks and Russia's civil aviation authority. VTB bank has already filed a lawsuit against Armavia and Mika Limited owned by Mikhail Bagdasarov to claim a reported debt of $22 million. The bank was refinancing the airline's loan for the purchase of the SSJ-100 airplane. Mikhail Bagdasarov, announced his intention to sell the company last year, however he failed to find a buyer.