Aerotree Defence and Services Sdn Bhd has filed a RM353 million lawsuit against the government over the cancellation of a five-year lease involving four US-made Blackhawk UH-60A helicopters.
The suit, filed through law firm Messrs Hafarizam, Wan Aisha & Mubarak at the Kuala Lumpur High Court today, also names the defence ministry and its secretary-general as defendants.
Aerotree is seeking a court order to compel the government to proceed with the deal, based on an acceptance letter dated April 17, 2023.
If not, it wants RM17.5 million in special damages, RM38.7 million in further damages and US$38.7 million (RM297.3 million) in compensation. It is also seeking general, exemplary and aggravated damages.
Aerotree is also seeking to stop the government from using a RM1.87 million bank guarantee, and a declaration that the Oct 31, 2024 termination is null and void.
In its 31-page statement of claim, the company said the government had agreed to lease four helicopters for RM187.5 million under a private finance initiative, with the company to own, operate and maintain the aircraft.
Under the deal, two helicopters were to be delivered within six months of the acceptance letter and the remaining two within nine months. Aerotree also provided a RM1.87 million performance bond, secured from Perwira Affin Bank.
The company said it signed agreements with Turkey’s Havelsan for simulator training for 14 army pilots, and with Slovakia’s Training Academy to buy and upgrade the helicopters.
However, it said, delivery was delayed by technical modifications, pilot training requirements, and supply chain disruptions from the Russia-Ukraine war. It requested three extensions up to Oct 30, 2024, but remained subject to late delivery penalties.
It also accused the ministry of failing to help secure a loan from SME Bank, which was undergoing a board restructuring. A change of defence minister further delayed paperwork, it said.
On Oct 31, 2024, Aerotree received the termination letter for failure to deliver the helicopters.
It said this was unfair, arguing that the helicopters had already been registered with the US state department and were awaiting export clearance under the International Traffic in Arms Regulations.
It argued that penalties should apply, not cancellation, and claimed that the termination violated the letter of acceptance terms requiring negotiations first.
Aerotree also alleged that a key financing document – the deed of assignment – had been submitted to the ministry’s legal division in June 2024, but no action was taken.
It claimed that the government later seized the RM1.87 million bond and ignored appeal letters sent in December 2024.
It said the move damaged its reputation and exposed it to legal action from its Slovakian supplier.
It also noted that the ministry had issued a fresh helicopter rental tender on Aug 4, 2025, worth RM185.2 million, closing on Sept 23.
While Aerotree is eligible to reapply, it said, there was no guarantee of success, and warned of a repeat of the same obstacles.
With export approvals now secured, Aerotree said the termination was done in bad faith, causing major financial and reputational losses.
The suit is fixed for case management on Oct 23.
