Business News of Thursday, 29 September 2011
Source: Business Analyst
…Halt operations or be cited for contempt
By J. Ato Kobbie, Managing Editor
Two indigenous commercial air transport operators, Antrak Air Limited and CTK Network Aviation Limited have threatened to cite Ghana Civil Aviation Authority (GCAA) and Starbow Limited for contempt if the latter did not cease commercial operations with a transferred Air Carrier Licence (ACL) it operates with.
The warning was contained in two separate letters, fired by counsel for the two indigenous airlines, Stanley Amarteifio of Stanley Amarteifio Associates, to the Director-General of the state-owned GCAA and the Chief Executive Officer of Starbow Limited.
Referring to a motion against GCAA and Starbow, which has now been scheduled for hearing at the Industrial and Labour Division of the High Court on October 13th, 2011 Mr. Amarteifio states:
“As a matter of law, to do the very thing that the application seeks to restrain whilst the application is pending, amounts to an act of contempt.”
He said his clients wanted Starbow Airlines, to cease operating with the said ACL No. 205 by Tuesday, September 27, 2011 or the two risked facing contempt proceedings against them.
“We shall be grateful if you would confirm to us in writing by the close of day Tuesday, the 27th of September, 2011 that all such operations have ceased, failing which we shall have no other alternative than to carry out our clients’ instructions,” Mr. Amarteifio warned.
Antrak and CTK have dragged GCAA, which is the aviation industry regulator and issuer of licences and Starbow Ltd, another commercial air transport operator, to court over what they say are clear violation of the provisions of Section 18 of Legislative Instrument (L.I.) 1075, which regulates the transfer of licences.
The said Section 18 of L.I. 1075 states:
‘No licence granted under these Regulations shall be transferred by the holder to any other person: except that in the event of the death, incapacity, bankruptcy, or insolvency of the holder, the Licencing Authority may transfer such licence to any person who is lawfully appointed to manage the business of such holder, if such person applies in writing to the Licencing Authority and satisfies the Licencing Authority of his ability to operate the business.”
According to Mr. Amarteifio, since there was an application in court to restrain the use of Air Carriers Licence (ACL) No. 205 granted to Aero Survey Limited for the operation of Starbow Airlines until the determination of the application, it was unlawful for GCAA to consent to Starbow Airlines’ continued operation with that licence.
In the original suit, ANTRAK Air Limited and CTK Network Aviation Limited, First and Second Applicants respectively, are praying the court to stop GCAA from allowing Starbow Limited and Abedair Aviation Limited to carry out commercial air transport operations in Ghana without an Air Carrier License (ACL).
According to the Applicants, contrary to the requirements that particulars of an airline’s ownership, together with its technical and management team, be vetted and gazette notification published before Air Operator Certificate (AOC) and Air Carrier Licence (ACL) were issued them that did not happen in the case of Starbow Limited.
The Applicants contend that by GCAA allowing Starbow Limited, also a commercial air transport service provider, to operate with ACL No. 0205 and AOC No. 026, originally granted to Aero Surveys Limited (ASL), the Respondents were engaged in an illegality, since the certificates are non-transferrable.
The Applicants said the GCAA granted to ASL the said certificates when the latter had only one shareholder, Chaka Azu, who on or around August 31, 2010, sold and transferred his entire shares to ASF Limited, which from then on became the sole shareholders of ASL.
From 1st September, 2010 the directors and secretary of ASL were changed and Mr. Chaka Azu, whose details were used to apply for ACL No. 0205 and who was Accountable Manager for the AOC No. 026, ceased to have effective ownership or control in ASL, they contend.
In an affidavit in support of their motion, signed by the Managing Director of CTK Network Aviation Limited, Tei Azu, the Applicants argue that by the provisions of the Civil Aviation (Air Transport Licensing) Regulations 1976 LI. 1075, no person shall use an aircraft in Ghana for the carriage of passengers for hire or reward upon scheduled journeys unless that person has been granted an air carriers licence (ACL) by the 1st Respondents.
The Applicants argue that by that legislation, an applicant for an ACL, must first hold an AOC, and the GCAA must also first publish in the Gazette the following particulars of the applicant: name and address; business name; the proposed routes; the proposed times and frequency of the service; the proposed date of commencement of the service; and the period for which the licence is required.
The legislation confers a right on anybody who has an objection to the application for an ACL to do so within 21 days after the publication of the particulars and GCAA shall not grant the licence applied for until the objection has been determined, the Applicants averred.
They argue further that to the extent that the entire shareholding in ASL has changed, that company should have re-applied for a fresh ACL and for the First Respondent to have published in the Gazette to have afforded them the opportunity to exercise their right of objection conferred by the said legislation.
The applicants said it has recently come to their notice however, that Starbow Limited as well as a Kenyan Company, known as Abedair Aviation Limited, are both operating in Ghana on the same ACL No. 0205 issued to Aero Surveys Limited.
Antrak and CTK argue that despite petitions to the Minister of Transport, and nothing had been done to halt that unlawful practice.
The two argue further that since their petitions to the GCAA and the Minister of Transport, requesting for a halt to the said anomaly regarding the issuance of the said certificates, they prayed the court “for an order of perpetual injunction to restrain Starbow Limited from using an aircraft in Ghana for the carriage of passengers for hire or reward based on the Air Carriers Licence No. 0205 granted to Aero Surveys Limited.”
In separate rebuttals, however, the two respondents have denied engaging in any irregularities as far as Starbow Limited’s operation under ACL 0205 is concerned.
GCAA argues that the ACL granted to the ASL has not been transferred, adding further that the Rules nonetheless provides for it to transfer licences under certain conditions.
According to GCAA, the licence was granted to the corporate body ASL, and that the Authority’s Regulations and Procedures do not require a withdrawal, revocation or suspension of the ACL on any change in the shareholding of a corporate body.
“As a practice developed by the Authority, it will normally request for the CVs of new shareholders/Directors for the purposes of background checks by the relevant authorities”, it said, adding that in the case of the ASL, the Authority demanded and obtained the CVs of the new shareholders and Directors which have since been forwarded to the relevant authorities for the necessary background checks.
It vehemently denies that Starbow Limited as well as a Kenyan Company known as Aberdair Aviation Limited (AAL) is operating in Ghana on the same ACL No.0205 issued to ASL.
Explaining further, the GCAA states that AAL is an Aircraft Maintenance Organization (AMO) providing aircraft maintenance services to ASL which was approved by the GCAA.
GCAA says the ASL has an Aircraft Utilization Agreement with AAL in respect of its Embraer EMB 110 P1 with registration mark 9G-FWC that it has leased from AAL.
The GCAA records, according to its Acting Director of Safety Regulations, per affidavit, show that Starbow Airlines is a registered Business name replacing “Air Shuttle” which used to be the Registered Business Name of Aero Surveys Limited.
The GCAA maintains, per the affidavit, that it has never permitted Starbow Limited and Aberdair Airlines to operate unlawfully using the ACL of ASL, adding that Starbow Limited has not applied to it for any Licence or authorization to operate airline business in Ghana.
According to the 2nd Respondent, ASL was granted an AOC on August 13, 2009 to operate an Airline under the trading name of ‘Air Shuttle’ and on August 25, 2009, was granted also Commercial Air Carriers Licence (ACL)to operate services thereon listed, subject to stated conditions, which ACL was renewed on August 25, 2010.
“At all material times, the shareholders of ASL were Messrs Chaka Azu and Carl Palmer until the 12th of July, 2010 when Carl Palmer transferred his 10% shareholding to Chaka Azu”, stated the second Respondent, adding that ASL as a duly incorporated corporate entity has a separate legal personality, distinct from its shareholders.
According to Starbow Limited, there is no known special legal restriction on the sale and purchase of the shares of a company in the aviation industry.
Continuing, the affidavit stated that AAL is a duly certified Aircraft Maintenance Organization (AMO) providing aircraft maintenance services to ASL by virtue of an Aircraft Maintenance Services Agreement dated 24th October, 2010 being the most current of such Agreements between the parties.
It said AAL’s present AMO Approval Certificate numbered 080 issued by the GCAA subsists until 31sth March, 2012, adding that the ASL also has an Aircraft Utilization Agreement with AAL in respect of Embraer EMB 110 P1 with current registration mark 9G-FWC until 31st December, 2011.
Starbow Limited denies the allegations, describing the application as misconceived, not based on known legal principles and brought in utmost bad faith.
Starbow Limited averred that when a change occurred in ASL’s management and shareholding, the First Respondent was notified under the cover of a letter dated 13th September, 2010 and it received a response in a letter dated 6th October, 2010 indicating that it had nothing against the management change but required further information before it could approve the said change.
The Second Respondent said ASL provided the information required by the First Respondent, which by a letter dated 4th November, 2010 approved the change in management and required further information on the new shareholders to be submitted to the National Security for the necessary background checks.
GCAA said on the 17th of May 2011, after the necessary checks, it renewed ASL’s AOC numbered 026 permitting ASL to operate its airline service business under the trading name of Starbow Limited and reflecting the change in management at ASL. [email protected]