Cessna files appeal over $27.4 million judgment in case over parts deal with Avcorp

06/10/2013 10:34 AM

08/08/2014 10:17 AM

Cessna Aircraft has filed an appeal with the U.S. Court of Appeals for the Tenth Circuit after a U.S. District judge upheld an award to Canadian supplier Avcorp Industries for $27.4 million.

Avcorp said Saturday that it had received notice of the appeal.

The court also had awarded interest at a rate of 10 percent per annum from Dec. 16, the date of the judgment, which totals about $1 million.

Cessna had disputed the award to Avcorp, made during arbitration last year. After a judge upheld the award last month, Cessna had 30 days to appeal the decision.

Avcorp alleged that Cessna breached an exclusivity agreement after it bought components from other sources.

Cessna alleged the contract between the parties had never been a “sole source” agreement or exclusive.

It also said Avcorp had breached the contract by shipping defective parts and that deliveries were late most of the time.

Beginning in 2001, Avcorp built major structural aircraft components, such as wing spars, center wing boxes and tails for various Cessna airplane models.

In 2003, Cessna began buying Sovereign empennages, or tails, from both Avcorp and Fokker. That continued for six years.

In 2005, Cessna also began building the center wing box for the Citation CJ3.

In late 2010, Cessna advised Avcorp that it would begin to transition to other suppliers and would begin to build some of the goods in-house.

Avcorp initiated arbitration against Cessna.

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