European Union: Montreal Convention: To Whom Is The Carrier Liable In The Event Of Delay?

Last Updated: 8 July 2016
Article by John Balfour and Thomas van der Wijngaart

Most Read Contributor in UK, September 2017

It is clear from Article 19 of the Montreal Convention 1999 that the "carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo", but it is less clear to whom the carrier is liable in the case of passenger delay only to the passenger or also to other parties who may suffer damage? In a judgment delivered on 17 February 2016, the Court of Justice of the EU confirmed the latter alternative.

The CJEU held, in response to a request for a preliminary ruling from the Supreme Court of Lithuania, in Case C-429/14 Air Baltic v Special Investigation Service of the Lithuanian Republic (SIS), that the Montreal Convention was to be interpreted as meaning that a carrier which has concluded a contract of carriage with an employer of persons carried as passengers is liable to that employer for damage occasioned by delay in the carriage by air of those passengers.

The main proceedings and the questions referred

The reference arose from a claim brought by the SIS against Air Baltic for reimbursement of an amount equivalent to about Euro 338 which SIS had paid to two of its agents in respect of travel expenses and social security contributions, as required by Lithuanian law, in the light of delay which the two agents suffered in travelling on business for the SIS. The SIS had bought tickets for its two agents to travel from Vilnius to Baku via Riga and Moscow, with the first two sectors on Air Baltic and the last on another carrier. The late arrival of the flight at Moscow meant that they missed the connection to Baku, and Air Baltic put them on another flight, which arrived in Baku the following day.

The first instance court held that Air Baltic was liable to pay the SIS for the amount claimed. Air Baltic appealed to the Supreme Court, arguing that under Article 19 of the Montreal Convention the carrier can be held liable only to the passengers themselves and not to other persons, especially when they are not natural persons and hence not consumers.

The Lithuanian Supreme Court decided to refer to the CJEU the question whether Articles 19, 22 and 29 of the Montreal Convention are to be understood as meaning that an air carrier is liable to third parties, inter alia to the passengers' employer, a legal person with which a transaction for the international carriage of passengers was entered into, for damage occasioned by a flight's delay, on account of which the employer incurred expenditure. The Court also referred a second question, but as this was only to apply in the case of a negative answer to the first question, it became irrelevant.

The CJEU's reasoning

The Court started by stating that, as a result of Article 31 of the Vienna Convention, an international treaty must be interpreted in accordance with the ordinary meaning to be given to its terms in their context and in the light of its object and purpose.

As to the ordinary meaning of the provision in question, the Court found that, as Article 19 refers to "any damage occasioned by delay...", and does not specify who may have suffered that damage, although it does not explicitly so provide, it lends itself to being interpreted as applying not only to damage suffered by passengers themselves but also to damage suffered by an employer.

The Court then examined whether such an interpretation is supported by the context and objectives, and concluded that it is, for the following reasons:

  • The Convention exists in six authentic language versions (French, English, Arabic, Chinese, Spanish and Russian). Although the French language version in Article 22(1) restricts the concept of damage occasioned by delay to damage "for each passenger", the English, Spanish and Russian versions differ, in that they refer to damage caused by delay, without restricting the damage to that suffered by passengers
  • Article 1(1) of the Convention, which defines its scope of application, provides that it "applies to all international carriage of persons, baggage or cargo performed by aircraft...". While it does not define the persons who retain the services of an air carrier for such purposes, it is to be interpreted in the light of the third recital in the preamble, which mentions "the importance of ensuring protection of the interests of consumers in international carriage by air", and consumers for such purposes are not necessarily the same as passengers and may include persons who are not passengers. Given this objective, Article 1(1) cannot be construed as excluding consumers of international carriage by air, even though they may not be passengers
  • Several provisions of the Convention (eg, Article 1(2), which refers to "the agreement between the parties", Article 3(5), which provides that the carrier's noncompliance with the ticketing requirements shall not affect the existence or validity of the contract of carriage, Article 25, which provides that the carrier may stipulate that the contract of carriage shall be subject to higher limits of liability, and Article 33(1), which provides that one of the available jurisdictions is the court where the carrier has a place of business through which the contract has been made) establish a link between the carrier's liability and a contract of carriage, and it is not relevant for such purposes whether or not the other party to such contract is a passenger

Finally, the Court pointed out that, given the provision in Article 22(1) of a monetary limit for the liability of the carrier for each passenger, the amount of the carrier's liability to a non-passenger in respect of the delay of passengers cannot exceed "the cumulative amount of compensation that could be awarded to all of the passengers if they were to bring proceedings individually".

Why is the CJEU involved?

Some may wonder why the CJEU is involved in interpreting provisions of the Montreal Convention. The reason is that the EU (in addition to each of its member states individually) is a party to the Convention, and furthermore the Convention has been approved by the Council on behalf of the EU (by Council Decision 2001/539) and implemented into EU law (by Parliament and Council Regulation 889/2002, amending Council Regulation 2027/97).

Thus, as the Court points out, "the provisions of the Montreal Convention have been an integral part of the European Union legal order from the date on which it entered into force and ... consequently, the Court has jurisdiction to give a preliminary ruling concerning its interpretation". Indeed, the Court has done so on several previous occasions (e.g., in Walz v Clickair in 2009).

Comment

The Court's approach to the interpretation of the Convention generally, with its regard for the Vienna Convention principles and the different language versions, is to be welcomed (although one is left wondering how the Arabic and Chinese versions of Article 22(1) deal with the concept of damage), and is consistent with the careful approach adopted in previous cases, such as Walz v Clickair. Moreover, although some may not like it, it seems perfectly proper for the Court to interpret the Convention, for the reasons it gives.

One matter that merits some comment is that in its judgment the Court makes no mention whatsoever of any judgments of courts of other jurisdictions on the issue. It may well be that this is because the parties to the case did not raise any in their arguments, and this in turn may be due to the absence of any authoritative rulings on the issue from any courts. Although there do not appear to be have been many, the issue has arisen, and Shawcross & Beaumont reports a judgment of a New York appeal court in 1997 (in Pakistan Arts and Entertainment Corporation v PIA) holding that an employer of passengers which had bought tickets for the passengers was entitled to bring a claim in respect of delay.

Indeed, in none of the several cases in which it has examined provisions of the Montreal Convention has the Court referred to a single judgment of another court on the issue in question. As mentioned above, this may well be because the parties to the case have not cited any in their arguments. However, as the Court itself pointed out in Walz v Clickair, "in the light of the aim of [the Montreal Convention], which is to unify the rules for international carriage by air, [terms in the Convention] must be given a uniform and autonomous interpretation", and the courts of many of the main states party to the Convention have frequently stressed the desirability of comity in the interests of attaining uniform interpretation. Hence, it is to be hoped that in future references concerning the Convention the parties to the cases will cite in their arguments to the Court judgments relating to the issue from national courts of standing, and that the Court will give due consideration to such jurisprudence.

Another comment that may be made is that, although no mention of this was made by the Court, in common law jurisdictions at any rate the concept of subrogation is well known, and would permit a party other than the passenger, such as a travel insurer, to bring a claim for delay against an airline.

One questionable element of the Court's judgment is where it says that the compensation awarded to a non-passenger party cannot exceed the cumulative amount of compensation that could be awarded to all of the passengers concerned if they were to bring proceedings individually. As Article 22 of the Convention clearly provides that "In the case of damage caused by delay...in the carriage of persons, the liability of the carrier for each passenger [emphasis added] is limited to 4,694 Special Drawing Rights", it seems unequivocal that the limit applies per passenger and is not to be calculated cumulatively with regard to all passengers concerned.

Finally, lest this judgment might cause concern about this, the judgment should not open the way for other parties to bring claims against airlines in respect of passenger death and injury. There is little jurisprudence on the question of who is entitled to bring such claims, and Article 24 does leave the issue open, but, as Shawcross and Beaumont notes, provisions in the Convention, such as Article 22(1) concerning special contracts between the carrier and the passenger, suggest that the ability to bring a claim is limited to the passenger and his/her personal representatives unless a third party is clearly given such right by the substantive law of the forum.

Montreal Convention: To Whom Is The Carrier Liable In The Event Of Delay?

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