Draken International Takes Legal Action Against Denel for R124 Million in Cheetah Aircraft Dispute

Denel, a state-owned defence conglomerate, is presently confronting a R124 million lawsuit initiated by the US company Draken International. This legal action arises from Denel's inability to deliver nine out of the twelve Cheetah fighter aircraft ordered in 2017 for adversary air training purposes.

On August 19, Draken International commenced legal proceedings against Denel Aeronautics in the Florida Middle District Court. The lawsuit alleges a breach of contract, claiming a failure to fulfil a $35.2 million (R624 million) aircraft sale agreement.

The complaint, submitted by Simpson Thacher & Bartlett and Stearns Weaver Miller Weissler Alhadeff & Sitterson, states that Denel has delivered only three of the twelve contracted Cheetah aircraft over a period of seven years. Consequently, Draken is owed $7.1 million in advance payments, along with additional damages. Draken reportedly paid Denel $12.7 million (R225 million) for this project.

In a statement dated August 27, Denel announced its awareness of the legal proceedings in Florida and stated its intention to contest the case. The company plans to soon submit its legal notices to the court. “While the matter is before the courts, Denel will not provide any comments on the merits and demerits thereof. However, Denel wishes to assure all stakeholders that it remains committed to fulfilling its contractual obligations, strengthening its operational performance and ensuring the long-term sustainability of the business. Denel continues to focus on enhancing its capabilities and restoring confidence with all its partners and clients, both locally and internationally,” Denel stated.

In December 2017, Denel finalised an agreement to sell 12 decommissioned Cheetah fighter jets from the South African Air Force to Draken International. The contract encompassed the refurbishment of the jets to operational status, conducting flight tests in South Africa, and subsequently transporting them to the United States.

Draken International, based in Florida, intended to utilise the jets for air support, pilot training, and tactical exercises. The agreement encompassed nine single-seat Cheetah C jets and three dual-seat Cheetah D models. According to Scramble magazine, the serial numbers are 344, 345, 353, 361, 363, 369, 370, 375, 376, 845, 858, and 859. These aircraft were designated for adversary training with the US Air Force, US Navy, and US Marine Corps. Draken regarded the Cheetah jets as a valuable addition to its fleet of 22 upgraded, radar-equipped Spanish Mirage F1Ms.

Denel was responsible for the development of the Cheetah fighter aircraft, a local adaptation of the Mirage III, during the 1980s. These aircraft were retired from service in 2008 when South Africa introduced a new fleet of Saab Gripen fighter jets. By 2011, Denel had successfully delivered 12 Cheetah aircraft to the Ecuadorian Air Force.

In October 2019, Denel Aeronautics delivered the initial pair of refurbished Cheetah fighters to Draken International as part of Project Dragon, comprising one single-seater and one dual-seater. It is understood that the third aircraft was delivered around mid-2021.

Draken International has also acquired an extensive inventory of spare parts and equipment from Denel to support the Cheetah fleet, which includes the Cheetah simulator from Air Force Base Makhado.

Deliveries were hindered by delays at Denel in making the aircraft operational again, particularly due to the need for replacement ejection seat components. This was followed by capacity issues linked to state capture and the Covid-19 pandemic. Additionally, the US reduced outsourced adversary training, leading to decreased demand for the Cheetahs.