Edinburgh's Menzies Aviation awarded $26m in damages following Afghanistan dispute

London-based tribunal rules in company's favour following termination of its subsidiary’s aviation services concession in 2020

Menzies Aviation provides air cargo services, fuel services and ground services at airports on six continents. Photo: Menzies Aviation

Menzies Aviation, one of the world’s biggest aviation services companies, has been awarded more than $26 million in damages by an international tribunal following a dispute with the Afghan government.

The Edinburgh-based aviation company on Wednesday said that London’s International Chamber of Commerce tribunal had ruled in its favour following the illegal termination of its subsidiary’s aviation services concession by Afghanistan in 2020.

The tribunal has awarded NAS Afghanistan — National Aviation Services, now part of the Menzies Aviation group — damages and compensation of $26 million plus interest, it added.

“I am delighted that justice has finally been served,” said Hassan El-Houry, chairman of Menzies Aviation.

Afghanistan “illegally terminated NAS’s contract, expropriated our assets and staff and took our management team hostage”, he added.

“Governments are not above the law, and we will always take the necessary steps to protect our staff and business interests.”

NAS had been providing ground services at Kabul, Kandahar and Herat international airports in Afghanistan since 2013 through a contract awarded following an open tender process.

It fulfilled its contractual obligations and invested more than $7 million, bringing in updated systems and equipment, and improved the operating standards and service levels within each airport of operation, Menzies said in a statement.

However, in October 2019, the government of Afghanistan, Ariana Afghan Airlines and the Ministry of Transport and Civil Aviation expropriated NAS’s operations in the Asian country and replaced it with a new operator.

They also took “active and hostile” steps to force NAS to surrender its assets and personnel including the sudden imposition of a travel ban on expatriate employees, Menzies said.

“Following these unjust actions, NAS suffered considerable losses and therefore sought retribution as available under the legally binding contract entered into by all parties.”

In August, Kuwait-based Agility — one of the largest logistics companies in the Middle East and North Africa region — announced that it has finalised its acquisition of UK-based John Menzies and will combine the business with NAS to provide aviation services in 58 countries.

Operating as Menzies Aviation, the combined company provides air cargo services, fuel services and ground services at airports on six continents. The combined revenue of Menzies and NAS exceeded $1.5 billion last year.

The new company has about 35,000 employees and operations at 254 airports, handling 600,000 aircraft turns, two million tonnes of air cargo and 2.5 million fuelling turns per year.

Some of the company’s customers include Air Canada, Air China, Air France-KLM, America Airlines, British Airways, Cathay Pacific, easyJet, Emirates, Ethiopian, flydubai, Frontier Airlines, Qantas Group and Qatar Airways.