The Supreme People's Court ruled Tuesday (December 13) that the owner and general director of Vietnam's first private airline to run flights, now grounded, has to personally repay a US$1.3 million debt the carrier owes a local bank.
Asia Commercial Bank (ACB) had appealed after a lower court prevented it from auctioning a property Indochina Airlines chief Ha Hung Dung had mortgaged as security for a letter of credit it issued to the carrier in 2008.
On Indochina's request, ACB had paid $1.19 million to Komercni Banka A.S of the Czech Republic in January last year.
The airline had until August 2010 to repay the amount with interest. But by then it had long been grounded in November 2009 both its Boeing aircraft wet-leased from Travel Service in the Czech Republic had been repossessed, and two months later its company's right to transport passengers in Vietnam was revoked.
The bank tried to sell a house Dung had mortgaged - belonging to his associate and situated on Ba Huyen Thanh Quan Street in Ho Chi Minh City's District 3 but was foiled by a local court.
The HCMC People's Court prevented it on the grounds that the mortgage contract was null and void because it was not notarized.
Indochina Airlines was set up in May 2008 and launched its first flight six months later.
But a year later it stopped flying due to financial difficulties.
Indochina sought a delay in the revocation of its license in January this year and loans from the government.
The Civil Aviation Authority of Vietnam was sympathetic but required the company to submit detailed plans for operations and financing, especially plans to repay its debtors, and procure an air operator's certificate.
When Indochina Airlines failed to obtain the AOC, it finally revoked the license earlier this month.