As the great and the good of the airline industry gather today (Wednesday) in Brussels for the first day of their annual airline IT conference, the organisers have been left reeling after losing a £20 million court battle over an IT deal that went wrong.
All the agreements made by the Federal Airport Authority of Nigeria (FAAN) with airline and airports industry IT systems co-operative SITA will have to be halted and deployments stopped a federal high court in Lagos has ruled.
Justice Ibrahim Buba awarded N5 billion (about £20 million) in damages in favour of Maevis Nigeria Ltd, in a lawsuit it brought against SITA.
Maevis had filed the lawsuit against SITA for "willfully inducing" FAAN to breach an existing technology agreement it had with it from 2007.
The contract was for the supply of an airport operations management system (AOMS) to four airports in Nigeria, including Lagos. Under the public-private partnership arrangement, Maevis collected revenue on behalf of the FAAN, and installed equipment that provided airlines with boarding cards, bag tags and other travel services at the Lagos and Abuja airports.
At this week's SITA Air Transport IT Summit, SITA, which is owned by the airlines and airports as a co-operative, is unveiling a host of similar updated airport operations management systems.
In its lawsuit Maevis said, “It was agreed that the contract would last for ten years and would be renewable every five years subject to satisfactory performance."
The plaintiff said that it had already supplied and installed equipment and software at two airports, whilst facilities were deployed at two others for installation.
According to Maevis, five years into the agreement and after the company had ploughed N5 billion into the project, FAAN terminated the agreement in February 2011, claiming "it had lost N17 billion due to the incompetence of Maevis".
“FAAN then employed the services of the defendants, SITA, who had intentionally negotiated for patronage," said Maevis. It claimed SITA had converted all the equipment supplied by Maevis for replacement SITA systems in March 2012.
“FAAN forcefully chased us out from its premises to pave the way for SITA’s takeover and enable it to use the equipment provided by Maevis," the plaintiff said.
The plaintiff sought an injunction, restraining the defendant from executing any of the agreement with FAAN, as well as N5 billion in general damages for conversion of equipment, which Justice Buba granted.
At the Air Transport IT Summit, attended by around 300 delegates, SITA will reveal the extent of air transport IT expenditure in the last 12 months and make predictions for the coming year. In recent years IT spending in the industry has been almost stagnant, although SITA has a significant chunk of it, generating over $1 billion in revenue.
The organisation told ComputerworldUK.com, "SITA is extremely surprised by this finding. Following a dispute with their previous provider and termination of contract, the airport authority asked SITA to supply services to ensure operation of the airports - we entered into a contract with the authority in good faith."
SITA went on, "It is our intention to appeal what we consider to be a perverse outcome. To comply with the court's order without appeal and to withdraw from airport operations would bring immediate disruption to air travel in Nigeria and be detrimental to its economy."