JEDDAH: The administrative court here on Saturday closed a $15 million compensation lawsuit against Saudi Airlines over a dispute regarding the purchase of 11 planes valued at $30 million.
A Saudi businessman filed the case against the airline for not allowing him to complete the purchase after making a down payment of $1.5 million. Saudia canceled the deal after the man failed to pay the rest of the cash on time.
The court also heard that the man was reimbursed, something that it said was legal. Court sources said the man signed a contract with Saudia to buy 11 Airbus, A300-600s for $30 million and and promised to complete the payment after receiving delivery of the planes.
The complainant alleged he had incurred financial losses that prevented him from honoring the contract and so he wrote to the airline canceling the deal and asking for a reimbursement.
He said he did not receive any reply from Saudia at the time and that a tourist company offered to pay him $40 million for the planes, enabling him to complete the deal and make $10 million in profit.
He said in his complaint to the court that the airlines company refused to give him a copy of the contract under which he could have obtained a bank loan to complete the deal. He also said the company told him that he had no right to receive the advance payment because he was late in paying. The man was given rights to buy the planes in an open bid.
In his lawsuit, the businessman asked the court to compel Saudia to compensate him for the losses he incurred because of the deal that led to his company becoming bankrupt and damage to his reputation. He also asked the airline to pay his legal fees, estimated to be about 10 percent of the cost of the deal, and reimburse his advance payment.
According to court sources, the lawyer representing Saudia said the company obtained the approval of the Ministry of Defense and Aviation to sell the aircrafts to the plaintiff and asked him to pay the price of two planes that were ready for delivery, but he wrote to them that he did not wish to finish the deal. On this, the aircrafts were sold to another buyer.
The representative said that according to Saudia rules the full price of the contract should have been paid within 90 days, adding that unless a bank receipt was received showing that the full price had been paid the planes would be sold to another buyer.
Asked why Saudia prevented the businessman from making a profit of $10 million by selling the aircraft to the tourist company, the lawyer said he did not own them for him to make that decision.
Following a five-year lawsuit, the court closed the case by sticking to its previous ruling in favor of the national carrier.
