A listed Taiwanese company that leased an Airbus helicopter in 2016 to a local company that defaulted on rent has vowed to fight the legal challenges it now faces all the way to the Supreme Court.
The Chailease Group, with a market capitalization of $11 billion and assets of more than $21 billion, said it has “overwhelming documentary evidence” to prove CAPP Industries Inc. of Christopher Pastrana was not the owner of the subject helicopter but was instead a lessee.
The lease agreement, Chailease said in a statement, was signed at the Alabang office of Pastrana in the presence of his lawyers. It also said that Singapore or New York should be the venue in resolving any dispute between the parties.
But Chailease said, Pastrana got the Pasay City prosecutor’s office to issue a resolution late last year saying CAPP was the owner.
It added the prosecutor based its finding partly on an unsigned bill of sales, saying it was enough to show an agreement “in principle.”
The prosecutor then filed a case of qualified theft — which is the taking of property from an owner — against the officials of Chailease based in Manila.
Aside from fighting in the local court, Chailease is planning of taking Pastrana to arbitration in New York as required in the agreement.
Jose Bernas, legal counsel of Chailease, said the findings were “without basis” since “we have all the documents that would show Chailease as the owner, that it was a financial lease, that we notified Mr. Pastrana of his several failures to pay rent on time, and informed him that we had to cover for his failure to pay the insurance premiums since the unit must be insured at all times, among other default events.”
Pastrana had the option to buy the unit at the end of the contract or at any time a payment is due by paying a residual value of $1.2 million which was clearly provided for in the lease contract, Bernas said.
Chailease eventually declared on Oct. 21, 2021 Pastrana in default, terminated the contract, took back the unit, and got a re-export permit from the Civil Aviation Authority of the Philippines which listed Chailease as the owner.
“As in a car loan where you are the buyer and owner only after full payment, just as an example to follow his thinking, if you fail to pay the periodic dues, the unit will be taken away,” Bernas said.
Bernas said a financial lease is no different from leasing a car or heavy equipment, with the lessor buying the equipment and leasing it to the lessee who is freed from shelling out a substantial amount upfront. The lessee has to pay an initial amount as equity, which in this case was $700,000.
Chailease, he said, bought the helicopter for $3.7 million and extended to CAPP a lease facility of $3 million. Pastrana offered as guarantor his other corporations such as JAM Liner, Philtranco Service Enterprises, and Archipelago Philippines Ferries Corp.
According to Chailease, Pastrana, in his complaint, said he thought all along that the documents he signed were just needed for the importation of the unit into the Philippines and that he would be the owner not the lessee.
Bernas said Pastrana, in August 2016, two months before the lease agreement was signed, emailed Chailease asking for a copy of the draft lease agreement, adding that the “contents…is (sic) very important to us to understand our obligation and the terms and conditions required…”
Bernas added Pastrana also executed under oath in July 2016 an affirmation that “I accepted and gave my conformity to the ‘H130 finance lease offer letter’ from Chailease…by affixing my signature thereon.”
