Cleary Gottlieb successfully represented Garuda Indonesia Holiday France (Garuda France), the French subsidiary of the flag air carrier of Indonesia Garuda, against Greylag Goose Leasing 1410 Designated Activity Company and Greylag Goose Leasing 1446 Designated Activity Company (Greylag), two Garuda’s aircraft lessors, in French appeal proceedings against a Paris Civil Court’s judgement that had ordered the release of precautionary seizures performed by Greylag on Garuda France’s bank accounts.
On June 27, 2022, the Jakarta Commercial Court ratified Garuda’s restructuring plan of approximately $9.58 billion of bank, bond, lease, and other indebtedness to address the ongoing challenges presented by the COVID-19 pandemic (homologation judgement).
On the same day, Greylag obtained ex parte the authorization from the enforcement judge of the Paris Civil Court to perform precautionary seizures on Garuda France’s bank accounts as a security for the amounts due under the aircraft lease agreements entered into with Garuda France (who then subleased the aircrafts to Garuda). Greylag seized a total amount of about €6 million.
Garuda challenged those precautionary seizures on the grounds that by virtue of Garuda’s restructuring plan, as ratified by the homologation judgement, Greylag did not have a claim that appeared grounded in principle against Garuda France, which is the threshold to meet to be authorized to perform precautionary seizures under French law.
On February 9, 2023, the Paris Civil Court ordered the release of the precautionary seizures, holding that Greylag no longer had a claim that appeared grounded in principle against Garuda France since Garuda’s restructuring plan provided for a release of all aircraft lessors’ claims against Garuda’s subsidiaries.
Greylag applied before the Paris Court of Appeal to overturn the judgement and claimed that Garuda’s restructuring plan, as ratified by the homologation judgement, could not have any legal effect in France, as the homologation judgment has not obtained recognition in that country.
On February 22, 2024, the Paris Court of Appeal ruled that although the homologation judgement is neither res judicata nor enforceable in France, it nonetheless constitutes a legal fact that calls into question the very existence of Greylag’s claims against Garuda France, which no longer appears to be grounded in principle. Therefore, Greylag is not entitled to perform precautionary seizures on Garuda France’s assets.
The Paris Court of Appeal therefore rejected Greylag’s appeals and confirmed the release of all the precautionary seizures. It also ordered Greylag to pay damages to Garuda France.