Court Finds Trial Issues In Aircraft Lease Dispute That Include Whether Lessor Prevented Lessee From Returning Engine

Posted: August 14, 2026 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Categories Breach of Contract, Summary Judgment, Commercial

Court Finds Trial Issues In Aircraft Lease Dispute That Include Whether Lessor Prevented Lessee From Returning Engine

On July 15, 2026, in Magnetic Parts Trading Limited v National Air Cargo Group, Inc., Index No. 653266/2020, Justice Robert R. Reed of the New York County Commercial Division denied plaintiff's motion for partial summary judgment on its breach of lease claim, in part because an issue of fact existed under the doctrine of prevention.

Plaintiff Magnetic Parts Trading Limited, as lessor, leased a Rolls-Royce aircraft engine to defendant National Air Cargo Group, as lessee. When the lease term ended, National had not returned the engine, and Magnetic moved for partial summary judgment on its breach of contract claim for the resulting rent. National argued that Magnetic could not fault it for failing to redeliver the engine when Magnetic itself withheld the redelivery location National needed to return it — invoking the doctrine of prevention. Magnetic countered that the location did not matter because National first had to repair the engine. The Court found a triable issue as to prevention among the several fact disputes that defeated summary judgment. The Court explained:

[U]nder the doctrine of prevention, ‘a party to a contract cannot rely on the failure of another to perform a condition precedent where he has frustrated or prevented the occurrence of the condition.’ . . . Defendant argues that, in accordance with the Lease, it attempted to return the Engine when it became unserviceable. Defendant asserts that Plaintiff frustrated or prevented it from returning the Engine by failing to provide a redelivery location until January 2021. Plaintiff claims that, under the Lease, Defendant was required to repair and service the Engine before it returned the item to Plaintiff, so the failure to provide the redelivery location before Defendant performed these repairs is inconsequential. The Lease provisions covering redelivery and unserviceability support both Plaintiff and Defendant's positions. Under the Lease, [Defendant] was obligated to return the Engine in serviceable condition at the end of the Lease term, but the Lease also provides that, if the Engine became unserviceable, [Defendant] could return it. The Lease also states that Plaintiff was not supposed to do any off-wing repairs, and Defendant insisted that Plaintiff fix the Engine and never clarified whether the LLP reserves from the Use Fees could be used. Accordingly, there are questions of fact surrounding how the Engine was to be handled once it became unserviceable, and the Court cannot conclude whether Plaintiff prevented Defendant from performing under the lease. (citation omitted)

The attorneys at Schlam Stone & Dolan LLP frequently litigate breach of contract disputes, including disputes over whether a party's own conduct excused the other side's performance. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.