Norwegian Air says Boeing dispute to be decided in U.S. court

DUBLIN (Reuters) - Norwegian Air expects its dispute with Boeing over the cancellation of orders for 97 aircraft to be decided in U.S. legal proceedings and not as part of an Irish restructuring process, a lawyer for the airline said on Friday.

Norwegian was given protection from bankruptcy in both Norway and Ireland, where most of its assets are registered, late last year and is aiming to emerge from the process in April with fewer aircraft and less debt.

On Friday, the airline indicated to the Irish court that it was seeking to repudiate three aircraft sales contracts with Boeing.

But a lawyer for Norwegian later made clear to the court that any repudiation would not impact or prejudge ongoing legal proceedings linked to the contracts in the United States.

Norwegian last year unilaterally terminated its remaining orders with Boeing for 97 aircraft and sought compensation for the grounding of Boeing 737 MAX jets and technical problems with 787 Dreamliners.

"Clearly it is not proper for this court to interfere in those proceedings or to prejudge them in any way," Declan Murphy, representing Norwegian, told the court.

"We are not asking this court to exercise an exorbitant jurisdiction to interfere with those proceedings," he said.

Judge Michael Quinn said he understood the repudiation applications were being brought "out of an abundance of caution" and "without prejudice to the U.S. litigation."

Boeing has declined to comment on the legal process, but continues to show the Norwegian orders on its published order book.

Industry sources say this indicates that Boeing continues to assert its right in the contracts, partly to deter other airlines from walking away from deals amid the coronavirus crisis.

(Reporting by Conor Humphries and Tim Hepher; editing by David Evans, Kirsten Donovan)