A former would-be investor of Austrian Airlines (OS, Vienna), Arab businessman Mohamed bin Issa Al Jaber, intends to sue Lufthansa Group for damages exceeding USD1.1 billion after winning a long-running legal dispute with the Austrian flag carrier.
The Saudi-born billionaire and Austrian citizen, also known as Sheikh Al Jaber, is founder, chairman, and chief executive of MBI International Holdings, which has invested in multiple hotel properties across Europe, including in Austria, since the 1980s as well as in oil field services and food companies in the Middle East.
In April 2008, he signed an investment contract offering to help then-cash-strapped Austrian Airlines (AUA) by taking a 20% stake in the company via a capital increase for about EUR150 million euros (USD232 million at the time), only to withdraw his offer that May when the carrier published poor quarterly results. He claimed the company had intentionally withheld the true scale of its financial troubles. Austrian Airlines, whose main shareholder was state holding company OeIAG, agreed with Lufthansa later that year for the German carrier to buy it.
A verdict at Vienna Commercial Court on March 31, 2023, vindicated the position of Al Jaber in the legal dispute with Austrian Airlines after almost 15 years of proceedings, MBI recounted in a statement released on April 14. The court ruled that he had been entitled to withdraw from the investment contract due to “clear misconduct” on the part of AUA, the statement said.
The court dismissed the lawsuit for payment of EUR156.4 million (USD171.3 million) plus 12.2% interest per year that the Austrian carrier had brought against Al Jaber in the autumn of 2008. The verdict also said the behaviour and communications of the airline’s management at the time were incorrect, misleading, and in violation of market rules.
In light of the verdict, Al Jaber will now file a lawsuit against Austrian Airlines, he said, “to compensate for the business and reputational damage his group of companies suffered as a result of AUA’s baseless lawsuit in the course of the over 14 years of court proceedings. According to preliminary estimates, this damage amounts to more than EUR1 billion” (USD1.1 billion).
A major share of the compensation, if awarded, would go towards the philanthropic activities of the MBI Al Jaber Foundation, he added, namely to supporting universities and medical centres and funding scholarships, as well as to realising commercial investments in Europe that were previously hampered by this lengthy legal battle.
“I was always supremely confident in the Austrian judicial system. Due to the long-term damages done by AUA’s absurd legal battle against my entrepreneurial interests, I will be seeking compensation from Lufthansa Group,” he said.
Lufthansa Group did not immediately respond to a request for comment from ch-aviation.
