The Kuala Lumpur High Court ordered the immediate release of the plane after both sides said they had reached an amicable settlement to the dispute, involving two planes leased to PIA, according to a lawyer representing the airline.

"Peregrine has agreed to withdraw its suit against PIAC (Pakistan International Airlines Corp) and for the injunction orders to be set aside," said PIA counsel Kwan Will Sen.

"With this, the two Boeing aircraft operated by PIAC would be released with immediate effect."

National carrier's plane Boeing 777 was held by authorities in the Southeast Asian country on January 15 after a court allowed a petition by the plane's lessor, Peregrine Aviation Charlie Limited, to keep it grounded pending the outcome of a $14 million lease dispute with PIA in a UK court.

PIA had reacted strongly to the decision and had asked for diplomatic assistance from the government of Pakistan.

"A PIA aircraft has been held back by a local court in Malaysia taking one-sided decision pertaining to a legal dispute between PIA and another party pending in a UK court. The passengers are being looked after and alternate arrangements for their travel have been finalized. It is an unacceptable situation and PIA has engaged the support from the Government of Pakistan to take up this matter using diplomatic channels."

The aviation minister Ghulam Sarwar had said that the national airline could not pay the amount to the lessor due to COVID-19.