France: French Court Applies Warsaw Convention To Claim By Manufacturer Against Airline

In a decision that will please many carriers and their insurers, a judgment of the Toulouse Court of Appeal issued in March 2013 has held that the Warsaw Convention applies not only to passenger claims brought directly against an airline, but also to an attempt by a manufacturer to join an airline as a third party to an action brought by passenger interests against the manufacturer of the aircraft involved in an accident. The purpose of such third party proceedings was effectively for the manufacturer to claim indemnity or contribution from the airline in respect of any liability the manufacturer may have to the passengers.

The case involved flight RNV967 from Yerevan in Armenia to Sochi in Russia on 2 May 2006, which tragically crashed into the Black Sea during an attempt to land in difficult weather conditions, killing all those aboard. Just three months after the accident, the families of nearly all the victims settled their claims with the airline and its insurers. As part of the settlement formalities, the families signed full release and indemnity documentation acknowledging that they had been compensated and releasing the airline and other parties, including the aircraft manufacturer, from all liability.

Some two years after settlement, a number of these same families began legal proceedings against the aircraft manufacturer in Toulouse, France, claiming further compensation on the basis that the aircraft had been a defective product with technical faults. Another two years passed before the manufacturer attempted to join the airline to the action as a third party, claiming crew error had caused the accident and not any product defect.

In May 2011, the Toulouse District Court declared that the manufacturer's claim was governed by the Warsaw Convention 1929 (to which both Armenia and Russia are signatories) and, accordingly, the Court did not have territorial jurisdiction to hear the claim against the airline. Under Article 28 of the Warsaw Convention 1929, an action for damages can only be brought in either the country where the carrier is ordinarily resident or has its principal place of business or has an establishment by which the contract was made (in this instance, Armenia), or in the country of destination (in this case, Russia). Unsurprisingly, the manufacturer appealed this decision.

In its appeal, the manufacturer argued that the Warsaw Convention was not applicable to its attempt to join the airline to the action, on the basis that a manufacturer has an obligation regarding product safety, which is not covered by the Convention. The manufacturer stated that the Convention only applies to parties linked by a contract of carriage (i.e. to the victims/their families and the airline) and not to manufacturers, thus making reference to prior decisions made by courts in the United States.

In reply, the airline stated that, in the event of death, Article 24 of the Convention states that any action for damages, however founded, can only be brought subject to the conditions and limits set out in the Convention and, the airline argued, this applied whether an action was brought by a victim's family or by a third party. Also, the Convention provides four jurisdictions in which an action can be brought against a carrier, none of which would be France in this instance.

In its decision on the manufacturer's appeal, the Toulouse Court of Appeal considered whether the proceedings brought by the manufacturer were governed by Article 24 of the Convention. It agreed that there was no contract of carriage between the victims' families and the manufacturer, or between the manufacturer and the airline. However, despite the manufacturer's arguments to the contrary, the Court decided that the manufacturer was not bringing a personal action against the airline, but was attempting to join the airline to the proceedings in order to establish the carrier's liability for the accident. The Court stated that the Convention does not make any distinction regarding the basis on which an airline is brought into proceedings or regarding the person seeking the airlines' liability. Accordingly, the Court decided that the Convention should govern any and all actions seeking to engage the airline's liability, regardless of who brought the action or the basis on which they claimed to be acting.

Given that the Court found that the Convention governed the proceedings, it followed that the French courts could not have jurisdiction to hear the claim, as France was not one of the four jurisdictions permitted under the Convention.

It remains to be seen whether the manufacturer will file a further appeal (which would have to be to the Cour de Cassation in Paris), but this is an encouraging decision for airlines and their insurers. In a jurisdiction which is sometimes seen to be increasingly claimant-friendly, this is particularly heartening as this judgment effectively prevents aircraft manufacturers from circumventing the provisions of the Warsaw Convention. If the Convention applies to any action attempting to find the carrier liable, then it is arguable that the potential defences provided by the Convention would also be available to carriers. Not only is there the possibility to argue that a court does not have territorial jurisdiction, but it might also be possible to argue that the right to damages has been extinguished two years after any accident and, under the Warsaw Convention, maybe even that the limit of liability of 125,000 Convention francs (most usually converted to US$10,000) should be applied. Moreover, it is conceivable that the French courts could apply similar reasoning when deciding cases under the Montreal Convention 1999.

This case was handled on behalf of the airline by Clyde & Co LLP London and Paris.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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