The extent of airlines’ liability has been given a wider meaning by a recent ruling delivered by the Court of Justice of the European Union (CJEU).

At issue was the Montreal Convention or, as it is formally known, the convention for the Unification of Certain Rules for International Carriage by Air. The CJEU was involved in interpreting the provisions of this multilateral treaty given that the EU and each of its member states individually are party to the Convention. The convention was approved by the Council and implemented into EU law by means of a regulation that has automatic applicability in all member states of the EU.

The Supreme Court of Lithuania enquired with the Luxembourg Court whether a carrier that had concluded a contract of carriage with an employer of persons carried as passengers is liable to that employer for damage occasioned by a flight’s delay and on account of which the employer incurs a disbursement.

The dispute that led to this preliminary reference to the CJEU arose between Air Baltic and the Specialist Investigation Service of the Republic of Lithuania. The latter had purchased two tickets to transport two of its personnel from Vilnius to Baku via Riga and Moscow, with the first two legs on Air Baltic and the last on another carrier.

There was a delay in the arrival of the flight in Moscow and the two employees missed the connecting flight, arriving in Baku a day late. The Specialist Investigation Service paid its two employees the travel expenses and the social security contributions as required by Lithuanian law amounting to a total of €338, and sought reimbursement from Air Baltic.

The Court of First Instance in Lithuania held in favour of Air Baltic and ordered it to pay the amount claimed by way of reimbursement. Dissatisfied with this decision, Air Baltic appealed to the Lithuanian Supreme Court arguing that, in terms of the Montreal Convention, the carrier can be held liable only to passengers and not to other persons, especially when they are not natural persons and hence cannot be considered as consumers.

The Montreal Convention lays down that carriers are bound by a general obligation to compensate for any damage occasioned by delay in the carriage by air of passengers, baggage or cargo. While specifying that damages are to be paid, the Convention does not specify to whom the carrier is liable in the event of delay.

In its judgment, the Luxembourg Court started off by establishing its jurisdictional role in interpreting the provisions of the Montreal Convention.

It ruled that the provisions of the Convention have been an integral part of the EU legal order from the date on which it entered into force and consequently the court had the necessary judicial authority to give a preliminary ruling concerning its interpretation.

In arriving at its conclusion, the CJEU interpreted the convention by giving the wording of its provisions an ordinary meaning within their context and in the light of the objects and purposes pursued by that convention.

Applying this plain but purposive construction approach, the court determined that the convention was deemed to apply not only to damage suffered by passengers themselves but also to damage suffered by an employer.

The court reasoned that, while the convention did not specifically mention that air carriers’ liability extended to parties other than passengers, there was no limitation in that sense and it lent itself to be interpreted as applying to parties who may not be passengers.

In applying its purposive reasoning, the CJEU considered that while there were variances in the translations of the wording of the convention with the French version referring to damage to passengers, the English, Spanish and Russian versions did not restrict the payment of damage to that suffered by passengers.

In response to the preliminary reference made by the Lithuanian Court, the Luxembourg Court ruled that in terms of the Montreal Convention, a carrier is liable to an employer who has contracted with the carrier for damage suffered as a result of delay to its personnel who are passengers on the flight.

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.

While the decision of the CJEU may open the door to similar claims from employers, air carriers will still be protected by the level of the compensation that they may be made to fork out, as that they will not have to pay more than what a carrier is required to pay to passengers claiming individually.

jgrech@demarcoassociates.com

Josette Grech is adviser on EU law at Guido de Marco & Associates.

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