The Supreme Court of Zambia has ruled in favour of Airlink, setting aside an earlier arbitration award that held the airline liable for damages linked to the now-defunct Zambia Skyways.
The dispute stemmed from a failed 2014 joint venture between Airlink and Zambia Skyways, under which Airlink was to acquire a 49% stake in the carrier for $300 000 (R4,8 million). The agreement would have seen the airlines collaborate on domestic and international operations.
A disagreement over a hangar lease led Airlink to withdraw from the venture. Zambia Skyways and its shareholders then initiated arbitration proceedings, claiming that Airlink had breached the Shareholder Agreement and seeking damages for delayed performance and consequential losses.
The arbitrator awarded damages of $647 000 (R10,3 million), including $432 000 (R6,9 million) in “expectation damages”.
Airlink challenged the ruling in the High Court and Court of Appeal without success before escalating the matter to the Supreme Court.
On December 31, the Supreme Court overturned the earlier decisions, finding that the arbitrator had awarded damages that were not specifically pleaded or contemplated by the parties' submission to arbitration.
“The appellant (Airlink) has substantially succeeded in advancing the appeal. We accordingly allow it and set aside the judgments of the High Court and Court of Appeal. In doing so, we uphold the application to set aside both the award and supplementary awards,” Chief Justice M Malila ruled.
