Kenya Airways (KQ) and a New York-based aviation parts distributor are locked in parallel lawsuits in Kenya and the United States, each accusing the other of breaching a multi-million-dollar agreement over aircraft components.
Kenya Airways filed suit in Nairobi’s High Court against Aero Industrial Sales (AIS), alleging the supplier failed to account for, remit proceeds from, or return inventory under a 2016 three-year consignment agreement covering surplus parts, tools and equipment from the airline’s Boeing 777 fleet. Under that deal, AIS was to guarantee minimum net proceeds of $2.75 million from the sale of the excess stock.
The airline argues the value of the stock may be higher than first estimated, citing air waybills showing shipments worth $17.64 million, though it applied a discount for used components to reach a disputed figure of $11.84 million. Kenya Airways is seeking either payment equivalent to the stock’s value or a full reconciliation of items received, sold and remaining, along with proceeds and unsold inventory.
AIS does not dispute the existence of the 2016 agreement but says it acted only as an agent in the transaction, and counters that Kenya Airways never delivered the full inventory list, requiring the airline to replace missing items under their master agreement.
The dispute took on a cross-border dimension after AIS filed a separate suit in the U.S. District Court for the Eastern District of New York on June 2, seeking more than $1 million in unpaid invoices for parts it says were delivered but never paid for. An initial conference in that case is scheduled before a magistrate judge in September. Kenya Airways has yet to respond in the U.S. proceedings.
Neither court has ruled on the merits of either claim. The legal fight comes as Kenya Airways works to shore up its finances following years of restructuring.
