Fundamentals of International Aviation Law and Policy 2019033591, 2019033592, 9781138588783, 9781138588806, 9780429492075

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Fundamentals of International Aviation Law and Policy Fundamentals of International Aviation Law and Policy offers students a systematic, tailored and dynamic approach to understanding the legal scenario concerning international civil aviation. The book dynamically covers the major areas of international aviation law, and provides an introduction to the multifaceted international regulation of aviation activities in the sphere of public and private law. The book is designed to provide the reader with the fundamental notions concerning international aviation law. It adopts an interactive approach, which aims at engaging the reader by way of using learning tools. The main areas of public and private aviation law are dealt with from a regulatory and practical perspective, and include detailed analyses of existing and applicable legislations, as well as landmark court cases and decisions. Each chapter is tailored to give readers a thorough knowledge of the international and, if any, the European applicable legislation. Delivery of these aims is attained through a dynamic and balanced use of didactic instruments and immediate information. The book is intended for a varied audience of students and professionals involved in the aviation world, without requiring the possession of specific legal knowledge or background. It also aims to constitute useful reference material for those who are familiar with legal terminology and aviation specifics. Benjamyn I. Scott has an LLB (Hons) from the University of Kent, an LLM in International Commercial Law from the University of Kent, an LLM (Adv.) in Air and Space Law from Leiden University, and a PhD in aviation cybersecurity from the University of Cologne. Benjamyn has a strong background in developing aviation technologies, having worked for several years in this area, and having written numerous journal articles and book chapters on the subject. Andrea Trimarchi graduated in law (LLM) from the University of Roma Tre. In 2016, he further obtained an LLM (Adv.) in Air and Space Law from the International Institute for Air and Space Law at Leiden University. Andrea has a strong background in competition and private international law, having had several years of experience in airlines and private aviation law firms.

Aviation Fundamentals Series Editor: Suzanne K. Kearns

Aviation Fundamentals is a series of air transport textbooks that incorporate instructional design principles to present content in a manner that is engaging to the learner, at an accessible level for young adults, allowing for practical application of the content to real-­world problems via cases, reflection questions and examples. Each textbook will be supported by a companion website of supplementary materials and a test bank. The series is designed to help facilitate the recruitment and education of the next generation of aviation professionals (NGAP), a task which has been named a ‘Global Priority’ by the ICAO Assembly. It will also support education for new air transport sectors that are expected to rapidly evolve in future years, such as commercial space and the civil use of remotely piloted aircraft. The objective of Aviation Fundamentals is to become the leading source of textbooks for the variety of subject areas that make up aviation college/university degree programmes, evolving in parallel with these curricula. Fundamentals of International Aviation Suzanne K. Kearns Fundamentals of International Aviation Law and Policy Benjamyn I. Scott and Andrea Trimarchi For more information about this series, please visit: www.routledge.com/Aviation-­ Fundamentals/book-­series/AVFUND

Fundamentals of International Aviation Law and Policy Benjamyn I. Scott and Andrea Trimarchi

First published 2020 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 52 Vanderbilt Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2020 Benjamyn I. Scott and Andrea Trimarchi The right of Benjamyn I. Scott and Andrea Trimarchi to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-­in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-­in-Publication Data Names: Scott, Benjamyn I., author. | Trimarchi, Andrea, author. Title: Fundamentals of international aviation law and policy / Benjamyn I. Scott and Andrea Trimarchi. Description: Abingdon, Oxon ; New York, NY Routledge, 2020 | Series: Aviation fundamentals | Includes bibliographical references and index. Identifiers: LCCN 2019033591 (print) | LCCN 2019033592 (ebook) Subjects: LCSH: Aeronautics–Law and legislation. | LCGFT: Textbooks. Classification: LCC K4095 .S36 2020 (print) | LCC K4095 (ebook) | DDC 343.09/7–dc23 LC record available at https://lccn.loc.gov/2019033591 LC ebook record available at https://lccn.loc.gov/2019033592 ISBN: 978-1-138-58878-3 (hbk) ISBN: 978-1-138-58880-6 (pbk) ISBN: 978-0-429-49207-5 (ebk) Typeset in Minion Pro by Wearset Ltd, Boldon, Tyne and Wear

Contents

Foreword Acknowledgements Acronyms and Abbreviations Biography Learning Tools Legal texts Court cases   1 Foundations of Aviation Law

xv xvii xviii xxi xxii xxiii xxvii 1

Learning Objectives  1 1.1 Introduction 1 1.1.1  Aviation v. Air Law  1 1.1.2  What is Aviation Law?  2 1.2 Key Elements in Aviation Law  4 1.3 Sources of Aviation Law  6 1.3.1 International Law 6 1.3.2  European Union Law  11 1.3.3 National Law 14 1.3.4  Binding Law and Non-­Binding Instruments  14 Recommended Literature  15 Points for Further Research  15   2 Early Development in Aviation Law

17

Learning Objectives  17 2.1 Introduction 17 2.2 Prior to the Paris Convention 1919  20

v

CONTENTS

2.3 Paris Peace Conference  22 2.3.1  World War I and the Treaty of Versailles  22 2.3.2  Paris Convention 1919  24 2.4 Madrid Convention 1926  25 2.5 Havana Convention 1928  26 2.6 Time for a New Era  28 Recommended Literature  30 Points for Further Research  30 3 Convention on International Civil Aviation Learning Objectives  31 3.1 Introduction 31 3.2 Applicability of the Chicago Convention 1944  33 3.2.1 International 33 3.2.2 Aviation 36 3.2.3 Civil 38 3.3 War and Emergency Conditions  42 3.4 Purpose of the Chicago Convention 1944  43 3.4.1 Preamble 43 3.4.2  Misuse of Civil Aviation  44 3.4.3  Use of Weapons Against Civil Aircraft  44 3.5 Breakdown of the Chicago Convention 1944  47 3.5.1  Part I Air Navigation  47 3.5.2  Part II International Civil Aviation Organization  48 3.5.3  Part III International Air Transport   48 3.5.4  Part IV Final Provisions  49 3.6 Transfer of Responsibility  49 3.7 Amendments 50 3.8 Dispute Settlement  51 3.8.1 Role of the International Civil Aviation Organization Council 51 3.8.2 Appeals after the International Civil Aviation Organization Council  54 3.8.3 Penalties 56 Recommended Literature  56 Points for Further Research  56

vi

31

CONTENTS

4 International Civil Aviation Organization

57

Learning Objectives  57 4.1 Introduction 57 4.2 Bodies of the International Civil Aviation Organization  62 4.2.1 Secretariat 62 4.2.2 Council 65 4.2.3 Assembly 67 4.2.4  Air Navigation Commission  69 4.3 Annexes to the Chicago Convention 1944  71 4.3.1  Standards and Recommended Practices  71 4.3.2 Overview of the Annexes to the Chicago Convention 1944 75 4.3.3 Adoption of Standards and Recommended Practices  76 4.3.4 Departures from International Standards and Procedures 77 4.4 Regional Cooperation under the Chicago Convention 1944  79 Recommended Literature  81 Points for Further Research  82 5 International Air Transport

83

Learning Objectives  83 5.1 Introduction 83 5.1.1 Sovereignty: Article 1 Chicago Convention 1944 and a Closed Airspace  83 5.1.2  Non-­Scheduled International Air Services  84 5.1.3  Regulation of International Scheduled Air Services  86 5.1.4  Notion of Cabotage  87 5.1.5  Operation of Pilotless Aircraft  89 5.1.6 Prohibited Areas: Article 9 Chicago Convention 1944 91 5.2 Freedoms of the Air  93 5.2.1 First Freedom 94 5.2.2 Second Freedom 94 5.2.3 Third Freedom 95 5.2.4 Fourth Freedom 95 5.2.5 Fifth Freedom 95 5.2.6 Sixth Freedom 96 5.2.7 Seventh freedom 96

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CONTENTS

5.2.8  Eight Freedom: ‘Relative’ or ‘Quasi’ Cabotage  97 5.2.9  Ninth Freedom: ‘Absolute’ or ‘Pure’ Cabotage  97 5.3 Rise of Bilateralism  99 5.3.1 Pre-­Liberalisation: Bermuda I and Bermuda II Air Services Agreements 99 5.3.2  Early Multilateral Developments  101 5.3.3  ‘Open Skies’ Agreements  102 5.3.4  Recent Multilateral ‘Open Skies’ Attempts  105 5.4 Key Themes in Bilateral Air Services Agreements  106 5.4.1  Airline Nationality Requirements  106 5.4.2 Licensing 110 5.4.3  Designation of Airlines  111 5.5 Airline Commercial Cooperation and Alliances  112 5.5.1  Rationale for Airline Cooperation  112 5.5.2 Interlining 112 5.5.3 Code-­ Sharing 113 5.5.4 Global Alliances 115 Recommended Literature  117 Points for Further Research  117 6 Criminal Aviation Law Learning Objectives  118 6.1 Introduction 118 6.2 Background and Prohibited Acts  120 6.2.1  Tokyo Convention 1963  121 6.2.2  Hague Convention 1970  123 6.2.3  Montreal Convention 1971  124 6.2.4  Montreal Protocol 1988  128 6.2.5  Beijing Convention 2010  130 6.2.6  Beijing Protocol 2010  133 6.2.7  Montreal Protocol 2014  134 6.3 Applicability 136 6.3.1 Religious Motivation 136 6.3.2  In Flight and In Service  137 6.3.3 Surface of the High Sea and other Areas Outside Territory of a State  138 6.3.4 Non-­ Military 138 6.3.5 International Element 139

viii

118

CONTENTS

6.4 Jurisdiction 139 6.5 Obligations of Contracting States  142 6.6 Powers of the Aircraft Commander  144 6.6.1 Restraint 144 6.6.2 Disembarkation 146 6.6.3 Delivery 146 6.7 In-­Flight Security Officer  147 6.8 Dispute Settlement  148 6.9 Issues of Entry into Force  149 Recommended Literature  151 Points for Further Research  151 7 Contractual Liability

152

Learning Objectives  152 7.1 Introduction 152 7.2 Historical Background  153 7.2.1  Warsaw Convention 1929  154 7.2.2 Amendments and Additions Following the Warsaw Convention 1929  154 7.2.3  Montreal Convention 1999  159 7.3 Scope of Application  160 7.4 Documentation 164 7.4.1 Documentation Relating to Passengers and Baggage 164 7.4.2  Documentation Relating to Carriage of Cargo  166 7.5 Liability of the Air Carrier in Case of Death or Injury of Passengers 167 7.5.1  Article 17 Montreal Convention 1999  168 7.5.2 Accident 169 7.5.3  Causal Link between the Accident and the Damage  170 7.5.4  Death or Bodily Injury  171 7.5.5  Embarkation and Disembarkation  172 7.5.6  Damage to Baggage  173 7.6 Two-­Tier Liability Regime of the Montreal Convention 1999  174 7.6.1  Limited, but Strict, Liability  174 7.6.2  Exposure to Unlimited Liability  176

ix

CONTENTS

7.7 Carrier Liability in Case of Delay  177 7.8 Liability Regime Concerning the Carriage of Cargo  179 7.9 Exclusivity Principle  180 7.10 Jurisdiction 183 7.10.1  Court of the Domicile of the Carrier  184 7.10.2 Court of the Principal Place of Business of the Carrier 184 7.10.3 Court where the Carrier has a Place of Business through which the Contract has been Made  184 7.10.4  Court at the Place of Destination  185 7.10.5 Fifth Jurisdiction  186 7.10.6 Concluding Remarks on Jurisdiction  187 7.11 Regional or Local Regimes Concerning Air Passenger Rights: Example of the Regulation 261/2004  187 7.11.1  Geographical Scope of Application  188 7.11.2  Material Scope of Application  189 7.11.3 Compensation Scheme 190 7.11.4  Duty of Assistance and Right to Care  190 7.11.5  Compatibility with the Montreal Convention 1999  191 7.11.6  Extraordinary Defence for the Air Carrier  192 Recommended Literature  194 Points for Further Research  194 8 Third-­Party Liability and Damage on the Surface Learning Objectives  196 8.1 Introduction 196 8.2 Early Development: Rome Convention 1933  198 8.3 Rome Convention 1952  200 8.3.1 Scope 200 8.3.2  Operator of the Aircraft  201 8.4 Montreal Protocol 1978  204 8.5 International Civil Aviation Organization Conventions for Damage to Third Parties  205 8.5.1  Unlawful Interference Convention 2009  206 8.5.2  General Risks Convention 2009  207 8.6 Mid-­Air Collisions  208

x

196

CONTENTS

Recommended Literature  210 Points for Further Research  210 9 Aviation Insurance

211

Learning Objectives  211 9.1 Introduction 211 9.2 Definition of ‘Insurance’  212 9.3 Applicable Law  214 9.4 Process 217 9.5 Compulsory Insurance  219 9.5.1  Rome Convention 1952  220 9.5.2  Montreal Convention 1999  220 9.5.3 European Union Regulation 1008/2008 and Regulation 785/2004 221 9.5.4  Other Sources of Law  222 9.6 Types of Insurance  223 Recommended Literature  225 Points for Further Research  225 10 Aviation Competition Law

226

Learning Objectives  226 10.1 Introduction 226 10.2  Application of Competition Law to Air Transport  231 10.3  European Union Competition Law Framework  231 10.3.1 Prohibited Agreements 231 10.3.2  Abuse of Dominant Position  234 10.3.3 Application of Articles 101 and 102 Treaty on the Functioning of the European Union to the Aviation Sector 235 10.3.4 State Aid 239 10.3.5  Airline Merger Control in the European Union  242 10.4  United States Antitrust Regime  244 10.4.1 Introduction 244 10.4.2  Sherman Act 1890  245 10.4.3  Institution of the Antitrust Immunity  246 10.4.4  Airline Merger Control in the USA  249

xi

CONTENTS

10.5 Development of Fair Competition in International Air Transport: Role of the International Civil Aviation Organization  250 Recommended Literature  252 Points for Further Research  253 11 Regulation of Environment in Aviation

254

Learning Objectives  254 11.1 Introduction 254 11.2  Need for a Sustainable Aviation  259 11.3  Regulation of Environment in Air Transport  261 11.3.1 United Nations Framework Convention on Climate Change and the Kyoto Protocol  261 11.3.2 International Civil Aviation Organization and Annex 16 262 11.3.3 Carbon Offsetting Reduction Scheme for International Aviation 264 11.4  Air Service Agreements and Recent Developments  266 11.5  European Union Emissions Trading Scheme  267 11.6 Aircraft Noise 271 Recommended Literature  273 Points for Further Research  274 12 Suborbital Transportation and the Link to Space Law Learning Objectives  275 12.1 Introduction 275 12.2 Historical Overview 277 12.3  Overview of the Industry  277 12.3.1  Types of Vehicles  277 12.3.2  Suborbital Vehicles Concepts  278 12.3.3  Types of Activities  279 12.3.4  Types of Participants  279 12.4 Legal Regime 280 12.5 Applicable Laws 284 12.5.1 Spatialist Approach 284 12.5.2 Functionalist Approach 286

xii

275

CONTENTS

Recommended Literature  290 Points for Further Research  290 Annex I – List of Main International Aviation Law Treaties

291

I.I  Public Aviation Law  292 I.II Contractual Liability 293 I.III Third-­Party Liability 294 I.IV Criminal Law 294 I.V  Rights in Aircraft  295 Index

295

xiii

Foreword

The international growth projected for the aviation industry will result in a tremendous need for the next generation of aviation professionals in future years. To meet the needs of the future, it is critical to establish accessible educational materials for youth from any part of the world. A key element is to have effective and engaging introductory educational materials written from an international perspective. Historically, aviation education was focused on operations within a certain country. Educational texts would explore the laws, regulations and operational implications specific to that country. The challenge of this approach is twofold: first, smaller countries often lack any appropriate resources for their classrooms and use those from larger countries (often causing additional work for teachers who must adapt the content and confusion among students about how things work in their part of the world). Second, it is limiting to conceptualise aviation only within the confines of one country’s borders. Many key elements of aviation operations are rooted within international agreements. Learning only one country’s aviation laws is roughly equivalent to an architect learning about building the framing for a home without consideration of the foundation which it is built upon. Air law is a topic that provides the foundation for all aviation activities around the world. Touching navigation, airport management, flight operations, manufacturing, licensing, and many other issues, harmonised international standards are critical for a sustainable aviation industry. Writing a book that is effective for students is deceptively challenging, as the examples and anecdotes typically offered by a skilled instructor in a classroom setting must be deliberately and strategically incorporated within the writing. It is far easier to write a book that is a simple listing of facts. Writing a good textbook requires the author to meet the needs of teachers, who will use the text as a supportive aid in their classrooms, as well as students who need the book to achieve the ideal balance of depth of content with ease of readability. The learning tools incorporated into each chapter of this book will support both teachers and students as they explore key definitions, interesting examples and cases and key documents for further reading on law topics. Benjamyn Scott and Andrea Trimarchi have done a great job presenting key concepts in international air law, while maintaining an engaging and interesting reading experience.

xv

FOREWORD This book will be an excellent resource for teachers and for youth beginning their journeys in aviation. Dr Suzanne Kearns Series Editor of ‘Aviation Fundamentals’ Textbook Series Associate Professor, University of Waterloo

xvi

Acknowledgements

We would first like to express our deep gratitude to Dr Suzanne Kearns, who is the editor of this series, for allowing us to write this text and for her suggestions, guidance, enthusiasm, encouragement and critiques, which have been most helpful in guiding us through this endeavour. We wish to thank each and every person who has dedicated their free time, patiently dealt with our requests and provided fascinating information. In particular, we would like to pay special thanks to PJ Blount, Elena Carpanelli, Arthur Eberg, Laura Hughes-­Gerber, Matina Jozi, Krzystof Kędzierski, Youngkyu Kim, Monika Kopoczyńska, Thomas Leclerc, Jae Woon Lee, George Leloudas, Jeroen Mauritz, Rodrigo Fernández Navarrete, Mateusz Osiecki, Anja Nakarada Pecujlic, Wolf Müller-Rostin, Martin Schwamborn, David Vajnai, Jan Walulik, Luping Zhang and Pai Zheng. A special thank you must go to Mark Jeffrey ([email protected]) for providing all of the pictures in this book. It was a pleasure to work with Mark, who is a diligent, professional and creative graphic designer. Finally, Benjamyn would like to express his deep gratitude to his parents who have supported and encouraged him throughout his life. Andrea also extends his truthful gratitude to his parents, whose unconditional support and encouragement stand as the reason behind his achievements. Without all of these people, this work would never have come into fruition; thank you!

xvii

Acronyms and Abbreviations

xviii

AAP

Allied and Associated Powers

ACI

Airports Council International

ADIZ

Air Defence Identification Zone

AOC

Air Operator Certificate

Art./Arts

Article/Articles

ASEAN

Association of Southeast Asian Nations

ATM

Air Traffic Management

CAA

Civil Aviation Authority

CAB

United States Civil Aeronautics Board

CAD

Canadian Dollar

CAEP

Committee on Aviation Environmental Protection

CBDR

Common But Differentiated Responsibilities and Respective Capabilities

Cir.

Circular

CITEJA

Comité Internationale Technique d’Experts Juridique Aériens

CJEU

Court of Justice of the European Union

CNY

Chinese Yen

CO2

Carbon Dioxide

COPUOS

Committee on the Peaceful Uses of Outer Space

CORSIA

Carbon Offsetting and Reduction Scheme for International Aviation

COSCAP

ICAO Cooperative Development of Operational Safety and Continuing Airworthiness Programme

DGCA

Directorate General of Civil Aviation

Doc.

Document

DOJ

United States Department of Justice

DOT

United States Department of Transportation

Acronyms and Abbreviations DVT

Deep Vein Thrombosis

EASA

European Aviation Safety Agency

ed./eds

Editor/editors

EC

European Community

ECAA

European Community Aviation Area

ECJ

European Court of Justice

EFTA

European Free Trade Agreement

ELFAA

European Low Fares Airline Association

et al.

And others

ETS

Emission Trading Scheme

EU

European Union

EUR

Euro

FAA

Federal Aviation Administration

FTC

Federal Trade Commission

GA

General Assembly

GATS

General Agreement on Trade in Services

GATT

General Agreement on Tariffs and Trade

GBP

Great Britain Pound

GHG

Greenhouse Gas

GM

Guidance Materials

HHI

Herfindahl-­Hirschman Index

IATA

International Air Transport Association

Ibid.

Ibidem (previous source cited)

ICAN

International Commission for Air Navigation

ICAO

International Civil Aviation Organization

ICJ

International Court of Justice

ILC

International Law Commission

ILM

International Law Material

IMO

International Maritime Organization

IPCC

Intergovernmental Panel on Climate Change

JPY

Japanese Yen

kg

Kilogramme(s)

km

Kilometre(s)

km/h

Kilometre(s) per hour

m

Metre(s)

xix

Acronyms and Abbreviations

xx

MALIAT

Multilateral Agreement on the Liberalization of International Air Transportation

MBM

Market-­Based Measure

MEIP

Market Economy Investor Principle

NAA

National Aviation Authority

NASA

National Aeronautics and Space Administration

No.

Number

NOTAM

Notice to Airmen

OJ

Official Journal of the European Union

PAN

Procedures for Air Navigation Services

Para./Paras

Paragraph/paragraphs

RES

Resolution

RPAS

Remotely Piloted Aircraft System

SARP

Standards and Recommended Practices

SDR

Special Drawing Right

SUPP

Regional Supplementary Procedures

TCAS

Traffic Alert/Collision Avoidance System

TEU

Treaty on the European Union

TFEU

Treaty on the Functioning of the European Union

UAS

Unmanned Aircraft System

UN

United Nations

UNFCCC

United Nations Framework Convention on Climate Change

USA

United States of America

USD

United States Dollars

UNTS

United Nations Treaty Series

v.

Versus

VCLT

Vienna Convention on the Law of Treaties

Vol.

Volume

WP

Working Paper

WTO

World Trade Organization

ZLW

Zeitschrift für Luft- und Weltraumrecht

Biography

Benjamyn I. Scott Benjamyn I. Scott studied his Bachelor’s in Law LLB (Hons) at the University of Kent and the University of Amsterdam. Further, he obtained an LLM in International Commercial Law from the University of Kent and then an LLM (Adv.) in 2014 in Air and Space Law from the International Institute for Air and Space Law at Leiden University. Finally, he holds a PhD from the University of Cologne where his thesis focused on the regulation of aviation cybersecurity. Benjamyn has a strong background in developing aviation technologies, having worked for several years in this area, and having written numerous journal articles and book chapters on cybersecurity, unmanned aircraft, suborbital transportation and roadable aircraft, as well as teaching at different universities.

Andrea Trimarchi Andrea Trimarchi graduated in law (LLM) from the University of Roma Tre. In 2016, he further obtained an LLM (Adv.) in Air and Space Law from the International Institute for Air and Space Law at Leiden University. He is pursuing a PhD in Aviation Law at the University of Cologne where his research focuses on the international regulation and harmonisation of labour standards and conditions in the airline industry. Andrea has a strong background in competition and private international law, having had several years of experience in airlines and private aviation law firms. He has published various articles and book chapters on competition, trade and investment, airline relations and private international law. He regularly delivers presentations both at universities and international aviation law conferences.

xxi

Learning Tools

This book has been designed to introduce key topics, concepts and terminology used in the aviation industry. Each chapter incorporates recurring features that serve as an orientation to the topic area. These features include: Learning Objectives – A list of targets that each chapter sets out to achieve. Recommended Literature – A list of recommended literature is provided to facilitate further study on a specific topic. Points for Further Research – A list of further research topics to provide direction towards important areas that need further analysis, such as for a thesis. Did You Know? – Short facts or stories that relate to the chapter content. Definitions – Key terms are defined using key international, regional and national sources. Case Report – Short summaries of important court cases from international, regional and national judicial proceedings. Treaty Information – The core treaty information is provided. The list of State Parties is correct as of August 2019. Acronyms and Abbreviations – Acronyms are heavily used within the aviation industry, therefore a table with all of the acronyms featured in the book has been provided. A note for readers: This book uses the grammar, vocabulary, spelling and style of British English, unless otherwise used by the relevant source. Units of measurement have been expressed in the metric system, unless otherwise used by the ­relevant source.

xxii

Legal Texts

INTERNATIONAL TREATIES Declaration Concerning the Prohibition of the Discharge of Projectiles and Explosives from Balloons or by Other New Analogous Methods, 1899 Declaration Prohibiting the Discharge of Projectiles and Explosives from Balloons, 1907 Treaty of Versailles, 1919 Convention Relating to the Regulation of Aerial Navigation, 1919 (Paris Convention 1919) Ibero-American Air Navigation Convention, 1926 (Madrid Convention 1926) Pan-American Convention on Air Navigation, 1928 (Havana Convention 1928) Convention for the Unification of Certain Rules Relating to International Carriage by Air, 1929 (Warsaw Convention 1929) International Convention for the Unification of Certain Rules to Damage Caused by Aircraft to Third Parties on the Surface, 1933 (Rome Convention 1933) Protocol Supplementary to the Convention for the Unification of Certain Rules Relating to Damage Caused by Foreign Aircraft to Third Parties on the Surface, 1938 (Brussels Protocol 1938) Convention on International Civil Aviation, 1944 (Chicago Convention 1944) International Air Services Transit Agreement, 1944 (Two Freedoms Agreement) International Air Transport Agreement, 1944 (Five Freedoms Agreement) Charter of the United Nations, 1945 (UN Charter) Statute of the International Court of Justice, 1945 (ICJ Statute) Air Services Agreement between the United States and the United Kingdom, 1946 (Bermuda I Agreement) Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface, 1952 (Rome Convention 1952) Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, 1955 (The Hague Protocol 1955) Convention on the High Seas, 1958 Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other Than the Contracting Carrier, 1961 (Guadalajara Convention 1961) Convention on Offences and Certain Other Acts Committed on Board Aircraft, 1963 (Tokyo Convention 1963) Treaty Banning Nuclear Weapon Tests in the Atmosphere, in Outer Space and under Water, 1963 Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, 1967 (Outer Space Treaty)

xxiii

LEGAL TEXTS Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space, 1968 (Rescue and Return Agreement) Vienna Convention on the Law of Treaties, 1969 (VCLT) Convention for the Suppression of Unlawful Seizure of Aircraft, 1970 (The Hague Convention 1970) Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, 1971 (Montreal Convention 1971) Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as Amended by The Hague Protocol, 1971 (Guatemala City Protocol 1971) Agreement Relating to the International Telecommunications Satellite Organization, 1971 Agreement on the Establishment of the INTERSPUTNIK International System and Organization of Space Communications, 1972 Declaration of the United Nations Conference on the Human Environment, 1972 Convention on International Liability for Damage Caused by Space Objects, 1972 (Liability Convention) Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite, 1974 Convention for the Establishment of a European Space Agency, 1975 Convention on Registration of Objects Launched into Outer Space, 1975 (Registration Convention) Agreement of the Arab Corporation for Space Communications, 1976 Agreement on Cooperation in the Exploration and Use of Outer Space for Peaceful Purposes, 1976 Convention on the International Mobile Satellite Organization, 1976 Agreement Concerning Air Services, United States–United Kingdom, 1977 (Bermuda II Agreement) European Convention on the Suppression of Terrorism, 1977 Protocol to Amend the Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface Signed in Rome on 7 October 1952, 1978 (Montreal Protocol 1978) Agreement Governing the Activities of States on the Moon and Other Celestial Bodies, 1979 (Moon Agreement) United Nations Convention on the Law of the Sea, 1982 (UNCLOS) Convention Establishing the European Telecommunications Satellite Organization, 1982 Convention for the Establishment of a European Organization for the Exploitation of Meteorological Satellites, 1983 Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of the Netherlands Concerning a Scottish Trial in The Netherlands, 1988 Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, Supplementary to the Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation, 1988 (Montreal Protocol 1988) Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation, 1988 Convention on the Marking of Plastic Explosives for the Purpose of Detection, 1991 United Nations Framework Convention on Climate Change, 1992 (UNFCCC) International Telecommunication Constitution and Convention, 1992 Marrakesh Agreement Establishing the World Trade Organization, 1994 General Agreement on Trade in Services, 1994 (GATT) General Agreement on Tariffs and Trade, 1994 (GATS) Additional Protocol No. 1 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, 1996 (Montreal Additional Protocol No. 1) Additional Protocol No. 2 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, 1996 (Montreal Additional Protocol No. 2) Additional Protocol No. 3 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, 1996 (Montreal Additional Protocol No. 3) Additional Protocol No. 3 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, 1996 (Montreal Additional Protocol No. 4) Kyoto Protocol to the United Nations Framework Convention on Climate Change, 1997 (Kyoto Protocol 1997)

xxiv

LEGAL TEXTS Convention for the Unification of Certain Rules for International Carriage by Air, 1999 (Montreal Convention 1999) Convention on Cybercrime, 2001 Convention on Compensation for Damage to Third Parties Resulting from Acts of Unlawful Interference Involving Aircraft, 2009 (Unlawful Interference Convention 2009) Convention on Compensation for Damage Caused by Aircraft to Third Parties, 2009 (General Risks Convention 2009) Agreement on Air Transport between Canada and the European Union and its Member States, 2009 (European Union-Canada ASA) Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation, 2010 (Beijing Convention 2010) Protocol Supplementary to the Convention for the Suppression of Unlawful Seizure of Aircraft, 2010 (Beijing Protocol 2010) Protocol to Amend the Convention on Offences and Certain Other Acts Committed on Board Aircraft, 2014 (Montreal Protocol 2014) Paris Agreement under the United Nations Framework Convention on Climate Change, 2015 (Paris Agreement) Consolidated Version of the Treaty on the Functioning of the European Union, 2016 (TFEU)

EUROPEAN UNION LEGISLATION Council Regulation (EEC) No. 295/1991 Establishing Common Rules for a Denied Boarding Compensation System in Scheduled Air Transport, 1991 Agreement on the European Economic Area, 1992 Regulation (EC) No. 889/2002 on Air Carrier Liability in the Event of Accidents, 2002 Council Regulation (EC) No. 1/2003 on the Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty, 2003 Regulation (EC) No. 261/2004 Establishing Common Rules on Compensation and Assistance to Passengers in the Event of Denied Boarding and of Cancellation or Long Delay of Flights, 2004 Regulation (EC) No. 785/2004 on Insurance Requirements for Air Carriers and Aircraft Operators, 2004 Council Regulation (EU) No. 139/2004 on the Control of Concentrations between Undertakings, as Implemented by the Following Instruments: Commission Regulation (EU) No. 802/2004; Commission Regulation (EU) No. 1033/2008, 2008 Regulation (EC) No. 300/2008 of on Common rules in the Field of Civil Aviation Security and Repealing Regulation (EC) No. 2320/2002, 2008 Regulation (EC) No. 1008/2008 on Common Rules for the Operation of Air Services in the Community, 2008 European Parliament and Council Directive 2008/101 amending Directive 2003/87/EC so as to Include Aviation Activities in the Scheme for Greenhouse Gas Emission Allowance Trading within the Community, 2009 Council Regulation (EU) No. 487/2009 on the Application of Article 101(3) of the TFEU to Certain Categories of Agreements and Concerted Practices in the Air Transport Sector, 2009 Commission Regulation (EU) No. 285/2010 Amending Regulation (EC) No. 785/2004 of the European Parliament and of the Council on Insurance Requirements for Air Carriers and Aircraft Operators, 2010 Regulation (EU) No. 421/2014 amending Directive 2003/87/EC Establishing a Scheme for Greenhouse Gas Emission Allowance Trading within the Community, in View of the Implementation by 2020 of an International Agreement Applying a Single Global Market-Based Measure to International Aviation Emissions, 2014

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LEGAL TEXTS Regulation (EU) No. 598/2014 on the Establishment of Rules and Procedures with Regard to the Introduction of Noise-Related Operating Restrictions at Union Airports within a Balanced Approach and Repealing Directive 2002/30/EC, 2014 Regulation (EU) 2018/1139 on Common Rules in the Field of Civil Aviation and Establishing a European Union Aviation Safety Agency, and amending Regulations (EC) No. 2111/2005, (EC) No. 1008/2008, (EU) No. 996/2010, (EU) No. 376/2014 and Directives 2014/30/EU and 2014/53/ EU of the European Parliament and of the Council, and Repealing Regulations (EC) No. 552/2004 and (EC) No. 216/2008 of the European Parliament and of the Council and Council Regulation (EEC) No. 3922/91, 2018

NATIONAL LEGISLATION Sherman Act, 1890 (United States) Clayton Act, 1914 (United States) Federal Trade Commission Act, 1938 (United States) Airline Deregulation Act, 1978 (United States) Australian Space Activities Act, 1998 (Australia) Belgium Law on the Activities of Launching, Flight Operations or Guidance of Space Objects, 2005 (Belgium) Space Development Promotion Act, 2005 (Republic of Korea) Austrian Federal Law on the Authorisation of Space Activities and the Establishment of a National Registry, 2011 (Austria) Law of the Republic of Kazakhstan on Space Activities, 2012 (Kazakhstan) Danish Outer Space Activities Act, 2016 (Denmark) Space Industry Act, 2018 (United Kingdom)

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Court cases

COURT OF JUSTICE OF THE EUROPEAN UNION CASES Aeroport de Paris v. EU Commission, Case C-82/01P, 1978 Ahmed Saeed Flugreisen and Silver Line Reisebüro GmbH v. Zentrale zur Bekämpfung unlauteren Wettbewerbs e.V., Case 66/86, 1989 Air Transport Association of America (ATA) and United States Airlines v. the United Kingdom Secretary of State for Energy and Climate Change, Case 366/10, 2010 AKZO, Chemie B.V. v. European Commission, Case C-62/86, 1991 Alitalia v. European Commission, Case T-296/97, 2000 Cityflier Express Ltd v. European Commission, Case T-16/96, 1998 European Commission v. France, Case T-167/73, 1974 Folkerts v. Air France, Case C-11/11, 2013 Hoffmann-La Roche & Co. AG v. European Commission, Case C-85/76, 1979 International Air Transport Association and European Low Fares Airline Association v. Department of Transport, Case C-33/04, 2006 Krusemann and Others v. TUIFly GmbH, Joined Cases C-195/17, C-197/17 to C-203/17, C-226/17, C-228/17, C-254/17, C-274/17, C-275/17, C-278/17 to C-286/17 and C-290/17 to C-292/17, 2018 Lassooy v. Finnair, Case C-22/11, 2012 McDonagh v. Ryanair, Case C-12/11, 2013 Miller International Schallplatten GmbH v. European Commission, Case C-19/77, 1978 Ministère Public v. Asjes & Others, Joined Cases C-209 to C-213/84, 1986 Nelson and Others v. Lufthansa and TUI Travel and Others v. Civil Aviation Authority, Joined Cases C-581/10 and C-629/10, 2012 Peskova and Peska v. Travel Air Services A.S., Case C-315/15, 2017 Sturgeon v. Condor and Böck and Lepuschitz v. Air France, joined Cases C-402/07 and C-432/07, 2009 Telemarketing c. CLT & IPB, Case C-311/84, 1985 Tetra Pak v. European Commission, Case C-333/94, 1996 The Distillers Co. Ltd v. European Commission, Case C-30/78, 1980 Van Der Lans v. KLM Royal Dutch Airlines, Case C-257/14, 2014 Viho Europe BV v. European Commission, C-73/95P, 1996 Wallentin-Hermann v. Alitalia, Case C-549/07, 2008

INTERNATIONAL COURT OF JUSTICE CASES North Sea Continental Shelf Cases (Federal Republic of Germany v. Denmark; Federal Republic of Germany v. Netherlands), 1969

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COURT CASES The Case Concerning the Aerial Incident of 3 July 1988 (Islamic Republic of Iran v. United States of America), 1996 The Mavrommatis Palestine Concessions (Greece v. United States), 1924

UNITED STATES CASES American Airlines v. Hope, 1974 American Airlines Inc. v. United States, 1984 American Tobacco Co. v. United States, 1946 Arkin v. New York Helicopter Corp., 1989 Booker v. BWIA West Indies Airways Ltd, 2007 Cerqueira v. American Airlines, 2008 Chan v. Korean Airlines Ltd, 1989 Day v. Trans World Airlines, 1975 Demarines v. KLM Royal Dutch Airlines, 1978 Eid v. Alaska Airlines, 2010 Floyd v. Eastern Airlines, 1991 Friend v. Hertz Corp., 2010 Hipolito v. Northwest Airlines, 2001 Hornby v. Lufthansa German Airlines, 2009 Husain v. Olympic Airways, 2003 Husserl v. Swissair, 1972 Kesel v. UPS, 2002 Klos v. Polskie Linie Lotnicze, 1997 Lisi v. Alitalia, 1965 Loyd v. American Airlines, 2002 MacDonald v. Air Canada, 1971 Martin v. Pan American World Airways, 1983 Medina v. American Airlines, 2006 Mfrs. Hanover Trust Co. v. Alitalia Airlines, 1977 Mullaney v. Delta Air Lines, 2009 Polansky v. KLM Royal Dutch Airlines, 2005 Potter v. Delta Air Lines, 1996 Price v. British Airways, 1992 Re Air Disaster Near Cove Neck, 1991 Re Mexico City Aircrash of October 31, 1979, Haley v. Western Airlines, 1983 Republic National Bank v. Eastern Airlines, 1986 Richards v. Singapore Airlines Ltd, 2013 Ricotta v. Iberia, 1990 Ryanair v. Brian Lake, 2017 Sakaria v. Trans World Airlines, 1993 Saks v. Air France, 1984 Stone v. Continental Airlines, 1995 Swaminathan v. Swiss Air Transport Company Ltd, 1992 The Standard Oil Company of New Jersey et al. v. The United States, 1911 Transvalue v. KLM Royal Dutch Airlines, 2008 Tseng v. EL AL Israel Airlines Ltd, 1999 Tsevas v. Delta Airlines, 1997 United States v. Causby, 1946 United States v. Cordova, 1950

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COURT CASES United States v. Topco Associations, (1972) Victoria Sales Corp. v. Emery Air Freight, 1990 Vinotica v. Air New Zealand Ltd, 2004 Wallace v. Korean Air, 1999 Warshaw v. Trans World Airlines, 1977 Wyler v. Korean Air Lines, 1991 Zhang v. Air China, 2012

UNITED KINGDOM CASES Abdelbaset Ali Mohmed Al Megrahi v. Her Majesty’s Advocate, 2008 Bernstein of Leigh (Baron) v. Skyviews & General Ltd, 1978 Bury v. Pope, 1587 Department of Trade and Industry v. St Christopher’s Motorists Assn Ltd, 1974 Dyer’s Case, 1414 Edward Darcy Esquire v. Thomas Allein of London Haberdasher, 1602 Evgeny Dogaev (a.k.a. Evgeny Rotshtein) v. Czech Republic, 2014 Lucena v. Crauford, 1806 Morris v. KLM Royal Dutch Airlines, 2002 Prudential Insurance Co v. Inland Revenue Commissioners, 1904 R. v. Heather Susan Tagg, 2001 Sidhu and Other v. British Airways PLC, 1997 Stott v. Thomas Cook Tour Operator Ltd, 2014

OTHER DOMESTIC CASES Amtsgericht Frankfurt Case No. 30 C 1370/06–25, 2007 Ayache v. Air France, 1984 Herfroy v. Cie Artop, 1962 Hook v. British Airways, 2011 Ludecke v. Canadian Pacific Airlines Ltd, 1979 Reale Mucelli v. Air New Zealand, 2006 Teichner v. Air France, 1984 Thibodeau v. Air Canada, 2012 Zikry v. Air Canada, 2006

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Chapter 1

Foundations of Aviation Law LEARNING OBJECTIVES  List the different sources of international aviation law.  Distinguish between public and private international aviation law.  Identify the key legal areas of study in international aviation law.  Know the basic definitions and terms used in international aviation law.  Identify the different aviation stakeholders.

1.1 Introduction 1.1.1 Aviation v. Air Law There are two prevailing terms used to name this area of study: • Air Law • Aviation Law If the term ‘aviation’ is consulted in the dictionary, it can be defined as “[t]he flying or operating of aircraft”.1 Thus, the focus is on the activity – the operation of aircraft. Alternatively, the term ‘air’ corresponds to the “invisible gaseous substance surrounding the earth, a 1  Oxford Dictionaries, online edn (Oxford University Press, 2018), ‘Aviation’.

1

FOUNDATIONS OF AVIATION LAW mixture mainly of oxygen and nitrogen.”2 The focus is the geographical location in which the activities are taking place. The differences in the ordinary meaning of these words suggest that the terms ‘aviation law’ and ‘air law’ correspond to different fields of study.

Did You Know? The use of terminology used to label the field of law is not unique to aviation. For example, the law governing the use of the seas and oceans is called either ‘maritime law’ or ‘law of the sea’. However, these terms are used to denote different content. Generally, ‘maritime law’ is used for national law and ‘law of the sea’ is the body of international rules.

However, while this may be the case linguistically, in practice, this distinction is often overlooked as the two terms are used interchangeably in the literature to correspond to the same area of law. To provide consistency between this book and the rest of the books in this series, the term ‘aviation’ has been adopted.3

1.1.2  What is Aviation Law? Before beginning an introductory study of aviation law, the scope of the topic must be defined. This will stop the book from drifting off course into unrelated areas and will, on the other hand, prevent fundamental themes from being overlooked that are vital for the successful study of this area of law. The development of aviation law could have taken place in two ways: • Option 1: Introduce aviation related content into existing legal instruments. • Option 2: Create a sui generis legal regime consisting of distinct and specialised rules for aviation. Depending on how aviation law is defined, elements of both options can be found. For example, aircraft insurance is generally handled through insurance contracts tailored to the subject matter and are governed by national contract and insurance law.4 Whereas, aviation safety is generally regulated via specific instruments unique to the subject material. This then leads to the next hurdle in trying to define aviation law. There are three competing theories as to what aviation law is.

2 Ibid., ‘Air’. 3 The term ‘aeronautical law’ is sometimes used, often within the Roman languages as the French ‘droit aéronautique’ and the Italian ‘diritto aeronautico’. Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017), at 1. 4 See, Chapter 9.

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FOUNDATIONS OF AVIATION LAW Table 1.1  Theories on aviation law Existing

Separate

Autonomous

Aviation law is simply a part of existing larger divisions of law, such as contract, criminal and tort, which concern aviation stakeholders.

Aviation law is separate from other areas of law and stands by itself.

Whatever its origins (Existing or Separate), aviation law has evolved into an autonomous body of law that allows for the production of new laws.

Depending on the definition, elements of all three can be identified. This is because aviation law can be defined in a way that fits the users’ purpose; it is malleable. For the purpose of this book, aviation law is used in a broad way to include rules, whether international or national, that have as their object or subject, stakeholders involved in aviation transport. Stakeholders can include different natural and legal persons, such as: • Aerodromes/Airports • Aircrew • Airlines • Air Navigation Providers/Air Traffic Controllers • General Aviation (Private Non-­Commercial) • Ground Handling • International Governmental Organisations • International Non-­Governmental Organisations • Manufacturers • Members of the Public • Passengers • States5 • Tour Operators • Training Organisations This is a non-­exhaustive list and could include other stakeholders depending on the context. Throughout the book, elements of the three theories will be evident.

5 This can include lawmakers (i.e. Parliament), interpreters and adjudicators (e.g. courts), law enforcement (e.g. police), and administrators and oversight authorities (e.g. aviation authorities).

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FOUNDATIONS OF AVIATION LAW

1.2  Key Elements in Aviation Law This book focuses on international aviation law. As international aviation “is an international activity regulated by a combination of public and private international law”,6 it is therefore important to distinguish between the two areas (public and private).

Definitions International: The term ‘international’ features in different aviation conventions and has a specific meaning for each body of law. Therefore, caution must be given when using this term. When using the term outside the context of a specific convention, this book uses it to refer to activities between more than one State. Public international law is the collection of rules that legally binds a State in its interaction with other States. With the evolution of public international law, the traditional State-­toState scope has been broadened and new entrants can include individuals and international organisations. Traditionally, public international aviation law involves: • Sovereignty (including Transit and Traffic Rights) • Safety (including Accident Investigation and Incident Reporting) • Security • Criminal • Environment • Competition Rules Public international law is to be distinguished from private international law. The latter is sometimes called the ‘conflict of laws’ as it determines: the applicability of a certain law or certain rules of law in situations involving a choice between the laws of different countries. In this context, the term international does not refer to the internationality of the source of law but to the internationality of the cases covered.7 Traditionally, private international aviation law involves: • Death or Bodily Injury of Passengers 6 Max Planck Encyclopedia of Public International Law (MPEPIL), online edn (MPEPIL, 2008), ‘Air Law’. 7 Ibid., at ‘Private International Law’.

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FOUNDATIONS OF AVIATION LAW • Delay, Cancellation and Denied Boarding of Passengers • Damage to or Loss of Cargo, Mail and Baggage • Third-­Party Liability on the Ground • Insurance • Aircraft Financing Certain legal principles from each system may be adopted by the other, but public and private international law are generally to be treated separately.

Definitions Safety: This generally refers to the measures introduced for the protection of others from one’s own activities, such as through airworthiness certification, training and air space management. Security: This generally refers to measures aimed at protecting oneself from external forces, such as terrorism. Criminal: This is the categorisation of certain undesired acts as offences under penal law. Environment: This is divided into two core areas. First, the emissions of greenhouse gases, such as carbon dioxide and methane gas. Second, the management of noise levels, such as making aircraft quieter, managing the land around airports and introducing operating restrictions. Liability: This involves a natural or legal person compensating another for an injury, such as, in the case of passenger death or injury, loss of baggage and damage to cargo. Commercial: This is the relationship between two or more parties for financial reasons. This typically includes aviation insurance, and the buying, selling or leasing of aircraft and engines. These are general definitions and specific rules may define them differently.8 International law is not stagnant; it evolves, covers a diverse subject matter, involves numerous stakeholders and is not always monothematic. For example, an aircraft crash may involve elements of safety and security.

8 See, for example, the definition of ‘security’ used in the European Union, Regulation (EC) No. 300/2008 of the European Parliament and of the Council of 11 March 2008 on Common rules in the Field of Civil Aviation Security and Repealing Regulation (EC) No 2320/2002, OJ L 97, 9 April 2008, Art. 3(2).

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FOUNDATIONS OF AVIATION LAW

Did You Know? The scope of ‘safety’ and ‘security’ is open to debate and the two can overlap. For example, the Germanwings 9525 crash had elements of hijacking (e.g. unauthorised control of the aircraft), which is traditionally treated as a security and criminal issue. Further, there are links to the pilot’s medical fitness and the cockpit door design, which is traditionally handled under the safety regime.

Furthermore, there may also be private claims for compensation based on liability. Therefore, while studies on aviation law often clearly demark certain topics as either public or private, with further subcategories, caution should be given in practice and knowledge of both areas is required.

1.3  Sources of Aviation Law 1.3.1 International Law The sources of international law are identified in Article 38(1) of the Statute of the International Court of Justice (ICJ).9 • Treaties • Customary international law • General principles of law recognised by civilised nations • Judicial decisions and the teachings of the most highly qualified publicists are subsidiary means for determining international law The first three are labelled as formal sources of international law as they constitute what is the law. On the other hand, the final point pertains to those sources labelled as ‘material sources’, ‘secondary sources’ or ‘legal sources of knowledge’, as they highlight where the law can be found.10 Caution must be given to Article 38(1), while the list is generally accepted as the established list of the sources of international law, the Treaty has a specific and limited scope (i.e. the establishment and function of the Court).

1.3.1.1 Treaties The main source of international aviation law is treaties. The Vienna Convention on the Law of Treaties (VCLT), pursuant to Article 1(a), provides a definition of the term ‘treaty’.

  9 Statute of the International Court of Justice 3 Bevans 1179; 59 Stat. 1031; T.S. 993; 39 AJIL Supp. 215 (1945). 10 The role of the ICJ in ruling on aviation related cases will be discussed in more detail in Section 3.8.

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FOUNDATIONS OF AVIATION LAW ‘Treaty’ means an international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation.11 The ICJ Statute uses the term ‘convention’, while the VCLT uses the term ‘treaty’. Other terms are also used, such as ‘international agreement’, ‘protocol’, ‘covenant’, ‘pact’ and ‘exchange of letters’. These are to be regarded as treaties and should be treated under international law as such.

Did You Know? The term ‘protocol’ features in aviation law to specifically refer to a treaty that amends an existing treaty. This is notable in the criminal law and liability regimes of international aviation law.12   Aviation law utilises two different types of treaties. Within aviation law, these are commonly referred to as ‘bilateral’ and ‘multilateral’ treaties. Bilateral: These are treaties concluded between two contracting State Parties. A prominent example of bilateral treaties in aviation are the over 5,000 bilateral air service agreements that govern international air transport.13 Multilateral: These are treaties involving more than two contracting States. The number of contracting parties can vary, for example, the Convention on International Civil Aviation currently has 193 State Parties, whereas the Suppression of Unlawful Acts Relating to International Civil Aviation of 2010 has only seventeen ratifications.

The study of international aviation law is dominated by treaties that cover a wide range of topics. The most important are listed in Annex I of this book and the majority will be discussed in this book, with the omission of those centred on aircraft financing. The VCLT is an important document when dealing with the corpus of international aviation treaties. For example, according to Article 31 of the VCLT, treaties “shall be interpreted in good faith in accordance with the ordinary meaning given to the terms of the treaty in their context and in the light of its object and purpose.” In addition, pursuant to Article 32 of the VCLT, supplementary means of interpretation can be used, such as the travaux préparatoires.14 As a result, the VCLT gives instructions on how the aviation treaties should be interpreted.

11 Vienna Convention on the Law of Treaties, 23 May 1969, 1155 UNTS 331 (1969). 12 See, Chapter 6 and 7. 13 See, Chapter 5. 14 See, for more information on treaty interpretation, the International Law Commission (ILC), ‘Draft Articles on the Law of Treaties with Commentaries 1966’, Yearbook of the International Law Commission, Vol. II, 1966..

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FOUNDATIONS OF AVIATION LAW

Did You Know? Pursuant to Article 4 of the VCLT, the VCLT is only applicable “to treaties which are concluded by States after the entry into force of the present Convention with regard to such States.” The VCLT entered into force on 27 January 1980, so any aviation treaty that came into force prior to this date is not subject to its Articles. However, some of the Articles constituted customary international law before the entering into force of the VCLT and were, therefore, already binding upon States.

It can be noted from the list of treaties in Annex I that not every treaty has entered into force. This is because each of the treaties listed requires a certain number of State ratifications, acceptances, approvals or accessions. A treaty may not have entered into force for a number of reasons, such as States do not agree with its content. Alternatively, ratification can be a long process at the national level as, for example, approval by parliament may be required. Therefore, the treaties may eventually come into force and because of this, they will be discussed in this book.

Definitions Acceptance and Approval: These terms have the same legal effect as ratification, thus they express the consent of the State to be bound by the treaty.15 Accession: This “is the act whereby a State accepts the offer or the opportunity to become a party to a treaty already negotiated and signed by other States. It has the same legal effect as ratification. Accession usually occurs after the treaty has entered into force.”16 Ratification: This “defines the international act whereby a State indicates its consent to be bound to a treaty if the parties intended to show their consent by such an act.” “The institution of ratification grants States the necessary time-­frame to seek the required approval for the treaty on the domestic level and to enact the necessary legislation to give domestic effect to that treaty.”17 Reservation: This is “a unilateral statement, however phrased or named, made by a State, when signing, ratifying, accepting, approving or acceding to a treaty, whereby it purports to exclude or to modify the legal effect of certain provisions of the treaty in their application to that State”.18 Signature: Once an agreement has been reached upon the text of a treaty, it will usually be signed by representative of the State which expresses the intention of that State to comply with the treaty. This is merely an expression of intent and is non-­binding.19 15 VCLT, Arts 2 (1)(b) and 14(2). 16 Ibid., Arts 2 (1)(b) and 15. 17 Ibid., Arts 2 (1)(b), 14 (1) and 16. 18 Ibid., Art. 2 (1)(d) and Section 2. 19 Ibid., Arts 10 and 18.

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FOUNDATIONS OF AVIATION LAW

Third States: This is any State that is not party to the treaty. A treaty cannot create obligations for a third State without its consent.20 Finally, a State may be able to make a unilateral statement, which may exclude or modify the legal effect of a provision of a treaty for that State. This is called a ‘reservation’ and it cannot be incompatible with the object and purpose of the treaty.21 A treaty may allow, forbid or limit reservations. Many of the aviation treaties provide for such a possibility, so each treaty must be individually assessed.

1.3.1.2  Customary International Law The second source of international law is international custom or customary international law. Customary international law refers to international obligations arising from established State practice, as opposed to obligations arising from formal written international treaties. This is determined through two factors: • Objective Element: The existence of State practice. In other words, the action of a State must support the customary rule. This is referred to as ‘consuetudo’. • Subjective Element: Acceptance as law. In other words, a State performing the act must do so because of a conviction that it is legally bound to perform that act. This is referred to as ‘opinio juris’.22 Customary international law is less dominant than treaties in aviation, however, it is present and relevant. A key example of this is Article 1 of the International Convention on Civil Aviation of 1944,23 which resonates with Article 1 of the Paris Convention 1919, which “recognize[s] that every State has complete and exclusive sovereignty over the airspace above its territory.” The term ‘recognize’ is used, rather than ‘establish’ or ‘provide’, as Article 1 is a codification of an already existing principle of customary international law. Arrigo Cavaglieri stated in 1929 at The Hague Academy of International Law: the opinion of the complete sovereignty of the subjacent State over the atmosphere at whatever height, has been accepted without question as a general rule of law, which henceforth has all the elements of international custom, because it gives, above all,

20 Ibid., Art. 34. 21 Ibid., Arts 19–23. 22 North Sea Continental Shelf Cases (Federal Republic of Germany v. Denmark; Federal Republic of Germany v. Netherlands), 20 February 1969, ICJ Reports 1969, at 3. 23 See, Section 3.2.1.2.

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FOUNDATIONS OF AVIATION LAW satisfaction to the essential interests of States and seems best from the point of view of legal precision.24 As this example shows, customary international law rules can be codified through treaties in addition to being recognised solely as customary law.

1.3.1.3  General Principles of Law Treaties and customary international law do not cover every situation and the development of new rules can be slow and can contain compromises. In order to fill the gaps, general principles of law were included as a source of international law. General principles do not refer to aviation, however, they are applicable when applying aviation law. For example, pacta sunt servanda25 is a general principle of international law that declares that agreements, such as treaty obligations, must be kept and is, therefore, applicable to State Parties of international aviation treaties. 

1.3.1.4  Judicial Decisions and Teachings of the Most Highly Qualified Publicists Judicial decisions may be a tool for locating international law. There is currently no international specialised aviation law court adjudicating on conflicts between States, natural or legal persons, or other entities arising out of treaties concerning air transport. Nevertheless, an aviation dispute may be brought to an international court, such as the ICJ,26 or to arbitration.

Did You Know? In June 2014, China established the Shanghai International Aviation Court of Arbitration. It is the only arbitration court in the world that focuses on aviation disputes; it “deals with various types of disputes in the aviation industry field, including but not limited to air transportation, aircraft manufacturing, aircraft sales, aircraft financial leasing, aviation insurance, general aviation trusteeship, ground services and air ticket agents.”27

24 Arrigo Cavaglieri, ‘Les règles du droit de la paix’, Cours Académie de Droit internationale de la Haye, Vol. 1 (1929), at 400. Original: L’opinion de la pleine souveraineté de l’Etat sous-jacent, sur l’atmosphère à quelque hauteur que ce soit, a été acceptée sans contestation par une règle de droit général, qui a désormais tous les éléments d’une costume internationale, parce qu’elle donne, plus que toute autre, satisfaction aux intérêts essentiels des Etats, et paraît le meilleure au point de vue de la précision juridique. 25 See, VCLT, Art. 26. 26 See, Chapter 3. 27 Shanghai International Aviation Court of Arbitration, ‘Introduction of Shanghai International Aviation Court of Arbitration’, www.shiac.org/Aviation/aboutus_E.aspx?page=2.

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FOUNDATIONS OF AVIATION LAW Alternatively, a dispute may also be brought before a national court for application or interpretation or to a regional court, such as the Court of Justice of the European Union (CJEU) for interpretation of European Union (EU) Law. Therefore, the specifics of each court must be examined in order to understand fully the context of any judicial decision and its wider influence in the field of aviation law. Writers have played a considerable role in the development of international law, which has been due, in part, to the absence of an executive and a legislative body, and to the youth of the international legal system.

Did You Know? The main journals, which contain topical aviation law articles are:

 Air & Space Law28  Annals of Air and Space Law29  Issues in Aviation Law & Policy30  Journal of Air Law and Commerce31  The Aviation & Space Journal 32  Zeitschrift für Luft- und Weltraumrecht (German Journal of Air and Space Law)33 Such writings are not a source of international law in themselves but are a means of ascertaining what the law actually is on a given subject. It could be argued that authoritative documents from aviation organisations, as well as academic writings from experienced scholars, may constitute supplementary means of interpretation under international law.

1.3.2 European Union Law 1.3.2.1  Primary Legislation The relevant primary legislation for aviation in the EU law is the Treaty on the Functioning of the European Union (TFEU).34 The starting point for EU competencies in aviation is found in Article 4 TFEU.

28 Kluwer Law Online, ‘Air & Space Law’, www.kluwerlawonline.com/toc.php?pubcode=AILA. 29 McGill, ‘Annals of Air and Space Law’, www.mcgill.ca/iasl/annals. 30 DePaul, ‘Issues in Aviation Law & Policy’, https://law.depaul.edu/about/centers-and-institutes/ international-aviation-law-institute/issues-in-aviation-law-policy/Pages/default.aspx. 31 Southern Methodist University, ‘Journal of Air Law and Commerce’, https://scholar.smu.edu/jalc. 32 Aviation and Space Journal, ‘The Aviation & Space Journal’, www.aviationspacejournal.com. 33 Wolters Kluwer, ‘Zeitschrift für Luft- und Weltraumrecht’, www.zlw.heymanns.com. 34 Consolidated Version of the Treaty on the Functioning of the European Union, OJ C 202 of 7 June 2016.

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FOUNDATIONS OF AVIATION LAW The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6. Article 4(2)(g) of the TFEU then states that such shared competencies include ‘transport’ which is to be read to include aviation. Therefore, in the field of aviation transport, the EU and its Member States are able to “exercise their own competence where the EU does not exercise, or has decided not to exercise, its own competence.”35 Article 100(2) of the TFEU then expands upon the EU’s aviation competencies. The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may lay down appropriate provisions for sea and air transport. They shall act after consulting the Economic and Social Committee and the Committee of the Regions. As aviation transport is a shared competence, as opposed to an exclusive competence pursuant to Article 3 of the TFEU, Member States have been free to develop national rules where EU law is silent.

1.3.2.2  Secondary Legislation In addition to primary EU law found in the Treaties, the EU institutions have the capacity to adopt five different types of secondary legislations.36 Regulations, Directives and Decisions constitute binding legal instruments.

Definitions Regulations: “Regulations are legal acts that apply automatically and uniformly to all EU countries as soon as they enter into force, without needing to be transposed into national law. They are binding in their entirety on all EU countries.”37 The Council or Parliament has the capacity to authorise the Commission to adopt two types of non-­ legislative acts:  Implementing Acts: These introduce measures to EU law and are implemented uniformly throughout the EU Member States. Delegated Acts: These amend or supplement existing EU law, such as to add new, non-­ essential rules. Directives: “Directives require EU countries to achieve a certain result, but leave them free to choose how to do so. EU countries must adopt measures to incorporate them into national law (transpose) in order to achieve the objectives set by the directive. National 35 EU, ‘Division of Competences within the European Union’, 26 January 2016, www.eur-lex.europa. eu/legal-content/EN/TXT/?uri=celex%3A12012E%2FTXT. 36 TFEU, Art. 288. 37 See, for the definitions of all five types of secondary legislations, European Commission, ‘Types of EU Law’, www.ec.europa.eu/info/law/law-making-process/types-eu-law_en.

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FOUNDATIONS OF AVIATION LAW authorities must communicate these measures to the European Commission. Transposition into national law must take place by the deadline set when the directive is adopted (generally within 2 years). When a country does not transpose a directive, the Commission may initiate infringement proceedings.” Decisions: “Decisions are binding legal acts that apply to 1 or more EU countries, companies or individuals. The party concerned must be notified and the decision comes into effect upon such notification. They don’t need to be transposed into national law.” In addition to binding legal instruments, Article 288 TFEU provides for two non-­binding instruments called Recommendations and Opinions.

Definitions Recommendation: “Recommendations allow the EU institutions to make their views known and to suggest a line of action without imposing any legal obligation on those to whom it is addressed. They have no binding force.” Opinion: “An ‘opinion’ is an instrument that allows the EU institutions to make a statement, without imposing any legal obligation on the subject of the opinion. An opinion has no binding force.” Recommendations and Opinions have moral and political significance, without being legally binding.

Did You Know? All EU Primary and Secondary legal acts are available in their official form in the EU’s EUR-­Lex database. Link: www.eur-­lex.europa.eu/.

All five types of secondary legislation have relevance for EU aviation law. Further, some may have extra-­territorial effect, so they should be considered when studying international aviation law.

1.3.2.3  Court of Justice of the European Union The CJEU interprets EU law to make sure it is applied in the same way across all EU Member States, settles legal disputes between Member States and EU institutions, and can be used by natural and legal persons to take action against an EU Institution.38 The CJEU is divided into two courts:

38 See, Consolidated version of the Treaty on European Union, OJ C 202 of 7 June 2016, Art. 19 and TFEU, Art. 256.

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FOUNDATIONS OF AVIATION LAW • European Court of Justice • General Court The CJEU is extremely important to EU aviation law and its jurisprudence should not be overlooked.

1.3.3 National Law As international law does not cover every aspect of aviation and, in some cases, directs States to implement rules at a national level, the role of national law is extremely important. This has produced a fragmented regulatory landscape around the world in which the national law of the relevant State should be consulted.

Definitions National Aviation Authority (NAA): This is a governmental statutory authority of a State that has responsibilities for overseeing and regulating aspects of civil aviation. States give different names to their NAAs. Some of the most common are: • • • •

Civil Aviation Authority (CAA) Air Transport Agency Directorate General of Civil Aviation (DGCA) Federal Aviation Administration (FAA)

Each State regulates aviation differently, however, they usually designate responsibility to a NAA.

1.3.4  Binding Law and Non-­Binding Instruments In order to conduct international aviation transport, a collection of binding laws (‘hard law’) and non-­binding documents (‘soft law’) are required. The terms ‘hard law’ and ‘soft law’ are highly debated39 and not universally accepted. However, hard law generally refers to legally binding obligations. Therefore, this includes: • Treaties • Customary International Law • Selected Case Law (e.g. Judicial Precedent) • EU secondary Legislation (i.e. Regulations, Directives and Decisions) • National Law • Contracts 39 See, as an example in the EU, EASA, ‘Regulations’, www.easa.europa.eu/regulations.

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FOUNDATIONS OF AVIATION LAW Within aviation, soft law is often of a technical nature and consists of:40 • Standards and Recommended Practices • Procedures for Air Navigation Services • Regional Supplementary Procedures • Certification Specifications • Acceptable Means of Compliances • Guidance Material Within aviation, an instrument is often defined as ‘soft law’ when it defines the level of ­compliance that should be reached in order to satisfy or is used as a tool that assists in attaining compliance with ‘hard law’. Thus, it is not simply an instrument that provides an interpretative tool, but actually facilitates compliance with hard law. Industry standards, such as those provided by ASD-­STAN, EUROCAE, JARUS and RTCA also play an important role. These bodies create best-­practices, drawing resources from industry experts, known as ‘standards’. These standards may be referenced in or converted into hard law or soft law.

Recommended Literature John Balfour and Mark Bisset (eds), Air Transport (Getting the Deal Through, 2018). Ron Bartsch, International Aviation Law: A Practical Guide, 2nd edn (Routledge, 2018). Paul S. Dempsey, Routledge Handbook of Aviation Law (Routledge, 2016). Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law (Kluwer Law ­International, 2011). Brian F. Havel and Gabriel S. Sanchez, The Principles and Practice of International Aviation Law (Cambridge University Press, 2014). Stephan Hobe, Nicolai von Ruckteschell and David Heffernan, Cologne Compendium on Air Law in Europe (Carl Heymanns Verlag, 2013). Suzanne Kearns, Fundamentals of International Aviation (Routledge, 2018). Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017).

Points for Further Research • What are the differences between ‘safety’ and ‘security’ in aviation? • What role do courts play in shaping international aviation law?

40 See, for more information on SARPs, PANs and SUPPS, Chapter 4. See also, for more information on CS, AMC and GM, Benjamyn I. Scott, ‘Regional Aviation Safety’, in Mendes de Leon, Introduction to Air Law (2017), at 329–330.

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FOUNDATIONS OF AVIATION LAW • What role does regional law, such as European Union aviation law, play in shaping the international aviation law regime? • How does the European Union utilise different types of secondary legislation in aviation? • What is the role of ‘soft law’ in international aviation?

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Chapter 2

Early Development in AVIATION Law

LEARNING OBJECTIVES  Identify early national legislation and court cases on aviation.  List key events in international civil aviation.  Know what the concerns of States were with the growth of international aviation law.  Become familiar with the first international treaty on aviation law.  Have the context behind the current legal framework.

2.1 Introduction The first example of aviation law is debatable. For example, classic Roman Law is often cited as the origins of aviation law for producing the maxim “Cuius est solum, eius est usque ad coelum et ad inferos” (whoever’s is the soil, it is theirs all the way to Heaven and all the way to Hell). The maxim’s Roman origins are questionable as its first reference appears to be much later with it seemingly premiering in the thirteenth century.1 The maxim has, however, had legal relevance as, for example, it was discussed in 1598 during an English court case.

1 Michael Milde, International Air Law and ICAO, 3rd edn (Eleven Publishing, 2017), at Chapter 2.

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Case REPORT

EARLY DEVELOPMENT IN AIR LAW

Bury v. Pope (1587) Cro Eliz 118 (England) The Court found that the owner of land was entitled to erect a house opposite a neighbour’s windows, although the neighbour had enjoyed access to light for over thirty years. In the absence of an easement, there is no right to light, so the landowner was allowed to build.

Early examples of the maxim being used in practice had nothing to do with aviation. Rather, it had its basis in property law, and the landowner’s right to use the land and the airspace above such land. It was not until much later that this maxim began to involve aviation.

Case REPORT

Bernstein of Leigh (Baron) v. Skyviews & General Ltd (1978) 1 QB 479 (England) The plaintiff claimed that the defendant’s act of flying over his home and taking photographs was a trespass into the plaintiff ’s airspace. The maxim was dismissed with Griffiths J finding that “I can find no support in authority for the view that a landowner’s rights in the air space above his property extend to an unlimited height.” As a result, the case established a balanced approach, whereby the rights of a landowner extend only to an altitude “necessary for the ordinary use and enjoyment of his land and the structures upon it”. United States v. Causby 238 US 256 (1946) (United States) The respondents owned a building and a chicken farm near an airport. The airport was used by the United States’ military aircraft, which resulted in the respondents being unable to use fully the property. While the Court found that there was a “taking of the respondents’ property” within the meaning of the Fifth Amendment of the United States Constitution entitling the respondents to compensation, it dismissed the right of infinite ownership of airspace above a person’s property.

It was not until the eighteenth century when laws started to be enacted to deal specifically with flight. The advent of aviation is often attributed to 19 October 1783 when the Montgolfier brothers (Joseph-­Michel and Jacques-­Étienne) launched the first manned flight in Paris, France via a tethered balloon. One year later, a Police Ordinance was issued in Paris, France prohibiting balloon flights as of 23 April 1784 without a permit.2 Following this, the City Council of Ypres, Belgium in 1784, the Council of Namur, Belgium in 1785 and the Senate of Hamburg, Germany in 1786 produced similar regulatory reactions.3 2 Peter Sand, Jorge de Sousa Freitas and Geoffrey Pratt, ‘An Historical Survey of International Air Law Before the Second World War’, 7 McGill Law Journal 1 (1960–1961), at 25. 3 Ibid.

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EARLY DEVELOPMENT IN AIR LAW The first bilateral international agreement regulating air traffic is dated 6 August to 2 November 1898 between Germany and Austria, and pertained to the crossing of international borders by military balloons.4 The Hague Conventions of 1899 and 1907 are a set of treaties and declarations that were negotiated at two international peace conferences in The Hague. The Hague Conventions, as well as the Geneva Conventions, represent some of the first codifications of laws of war and war crimes in international law. The relevant products of the Conferences were: • Declaration concerning the Prohibition of the Discharge of Projectiles and Explosives from Balloons or by Other New Analogous Methods (1899).5 • Declaration Prohibiting the Discharge of Projectiles and Explosives from Balloons (1907).6 The latter extended the provisions of the former. The 1899 Declaration can be seen as the first international multilateral agreement among States covering aviation.7

Did You Know? Other key historical aviation dates include:

 17 December 1903: The Wright brothers (Orville and Wilbur) carried out the first sustained, controlled, powered, heavier-­than-air manned flight in North Carolina, United States.

 16 November 1909: Deutsche Luftschiffahrts AG was founded, which repre-

sented the world’s first air transport company. During the company’s operating life, it transported 34,228 passengers over a 172,535 km network.

 1 January 1914: The first scheduled passenger airline service began operating, which was between St Petersburg and Tampa, both located in Florida, United States.

 14–15 June 1919: The first transatlantic flight from Newfoundland, Canada to County Galway, Ireland by British aviators John Alcock and Arthur Brown was successfully completed.

The first air traffic regulation was enacted in 1908 by the Council of Kissimmee City, United States. It declared that the airspace below 20 miles (c.32 km) was subject to the legal control 4 Elmar Giemulla, ‘Chicago System: Genesis and Main Characteristics’, in Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law (Kluwer Law International, 2011), at 6. 5 Declaration Concerning the Prohibition of the Discharge of Projectiles and Explosives from Balloons or by Other New Analogous Methods, 002421 (1899). 6 Declaration Prohibiting the Discharge of Projectiles and Explosives from Balloons, 003329 (1907). 7 Giemulla, ‘Chicago System: Genesis and Main Characteristics’ (2011), at 6.

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EARLY DEVELOPMENT IN AIR LAW of the city. Kissimmee City, the cow capital of Florida, planned its first flight in 1908, but during take-­off, the aircraft hit a cow, which destroyed the aircraft. Kissimmee City had to wait until 1911 to see its first flying aircraft. Despite the rumours of a practical joke, the regulation can be seen as progressive, paving the way for other jurisdictions.8 This is because, following these efforts, in 1910 to 1914, aviation decrees were enacted in Austria, France, Germany, Great Britain, Italy, Prussia, Russia, Yugoslavia and Switzerland.9

2.2 Prior to the Paris Convention 1919 Prior to the formulation of an international treaty on civil aviation, numerous States and experts met to discuss how this emerging activity should be regulated. For example, the Institute of International Law included aviation on its agenda during its 1880 convention in Oxford, UK,10 and in 1900 the French jurist Fauchille proposed that the Institute create an international air navigation code. However, it was not until 8 May to 28 June 1910, during the Paris International Air Navigation Conference (Paris Conference 1910), that the first diplomatic efforts to formulate the principles of international law relating to air navigation took place. When the Conference met in 1910, international flight was practically unregulated. However, there was a growing concern by States that such activities needed to be regulated. For example, on 25 July 1909, Louis Blériot flew an aircraft across the English Channel from Les Barraques, France to Dover, UK – a total distance of 38 km. Although the success of the flight was generally well received, no legal steps were taken to authorise the flight or the landing of the aircraft in a foreign territory.11 Another well-­cited case is the unauthorised crossing of German balloons between April and November of 1908 into French territory.12 The French Government, concerned about legal and political issues arising from international flights, invited the European powers to hold a diplomatic conference on how the regulation of air navigation should be conducted. The invitation was accepted by the following nineteen European States: • Austria-­Hungary

• Denmark

• Belgium

• France

• Bulgaria

• Germany

  8 Rebecca Maksel, ‘The First U.S. Air Law Was in a Town Without Airplanes’, Airspacemag.com, 8 June 2015.  9 Sand et al., ‘An Historical Survey of International Air Law Before the Second World War’ (1960– 1961), at 26 and ns 13–18. 10 See, for a detailed description of activities prior to the Paris Conference, ICAO, ‘The Paris Convention of 1910: The Path to Internationalism’, www.icao.int/secretariat/PostalHistory/1910_the_ paris_convention.htm. [sic ‘1910’ should be ‘1919’] 11 Milde, International Air Law and ICAO (2017), at 7 and n. 4. 12 Gaston Bonnefoy, ‘Le code de l’air, l’aéronautique et l’aviation en droit français et en droit international’ (M. Rivière, 1909), in John C. Cooper, ‘The International Air Navigation Conference, Paris 1910’, 19 Journal of Air Law and Commerce (1952), at n. 1.

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EARLY DEVELOPMENT IN AIR LAW • Great Britain

• Russia

• Italy

• Spain

• Luxembourg

• Sweden

• Monaco

• Switzerland

• Netherlands

• Turkey

• Portugal

• Yugoslavia

• Romania The Paris Conference 1910 did not produce an international Convention,13 in part due to the opposing positions on sovereignty of the air. Three main opinions were present: • Freedom of the Air: Aircraft should be free to use the airspace. • Air Zones: The airspace should be divided into different zones where some areas are subject to free access and use, whereas others are subject to varying degrees of control. • Air Sovereignty: The airspace should be subject to the full and absolute control of the subjacent State. The Conference provided a forum for States to share ideas and highlighted agreement on some key legal areas. • Each State has full sovereignty over its airspace above its territory (land and waters). • There is no general right for a foreign aircraft to transit through the airspace of another State. The position on sovereignty was affirmed in other forums, such as the Verona International Conference on Aviation Law of 1910, International Law Association, Pan-­American Aeronautic Federation in Santiago in 1916, Inter-­Alliance Conference in Budapest in 1918 and Nordic Aviation Conference in Stockholm in 1918.14 Importantly, the Paris Conference 1910 also demonstrated that the only practical legal method for the regulation of international civil aviation was via a multilateral treaty that detailed States’ rights and obligations in terms of the access to foreign airspace.

13 Cooper, ‘The International Air Navigation Conference, Paris 1910’ (1952), at 139–143. 14 Giemulla, ‘Chicago System: Genesis and Main Characteristics’ (2011), at 8.

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EARLY DEVELOPMENT IN AIR LAW

2.3 Paris Peace Conference 2.3.1 World War I and the Treaty of Versailles The growing number of aircraft and the realisation of aviation’s potential post-­World War I highlighted the urgent need for some kind of international regulation for international civil aviation. The Armistice, which was signed on 11 November 1918, ended the actual fighting of World War I. However, it took six months of Allied negotiations at the Paris Peace Conference to conclude a peace treaty. The Treaty of Versailles was signed on 28 June 1919 in Versailles, France and officially ended the war between Germany and the Allied Powers. The Treaty of Versailles had a significant impact on civil and military aviation. This happened in three key ways: • The Treaty of Versailles provided restrictions on German military aviation. • The Treaty of Versailles included terms on German civil aviation. • The Paris Peace Conference produced the Convention Relating to the Regulation of Aerial Navigation 1919 (Paris Convention 1919). The Treaty of Versailles practically grounded all German aircraft existing at the end of World War I. This was due to Part V – Military, Naval and Air Clauses, Section III Air Clauses, which contained five articles designed to restrict Germany’s air force. • Article 198 on the partial removal and limitation of the air forces. • Article 199 on the demobilisation of air force personnel. • Article 200 on the enjoyment of freedom of passage through the air, freedom of transit and of landing in Germany by Allied and Associated Powers (AAP) troops until their complete evacuation. • Article 201 on the limitation on the manufacture and importation of aircraft, parts of aircraft, engines for aircraft and parts of engines for aircraft. • Article 202 on the delivery of certain aviation equipment to AAP. Despite such restrictions, after World War I, the new Weimar Government was very supportive of commercial aviation. By the mid-­1920s, there were a number of small civilian passenger services in Germany. Despite the strong support by the government, such as through subsidies, only a few survived the poor economic conditions of the time. In 1926, the restrictions imposed on German aircraft construction were lifted. That year saw the beginnings of Lufthansa, which owes its origins to Deutsche Luft Hansa Aktiengesell­ schaft, which was formed from a merger between Deutsche Aero Lloyd and Junkers Luftverkehr. These companies grew out of the post-­World War I German commercial aviation push. As a result, Germany focused on the civil application of aircraft, whereas many of the AAP kept their focus on the military application of aircraft. This allowed Germany to

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EARLY DEVELOPMENT IN AIR LAW specialise in this area. The German military, however, did not completely disappear; rather, it was dormant throughout the 1920s. Its staff still developed air doctrine and training programmes, monitored technology developments and built a civilian aviation industrial infrastructure. On 30 January 1933, Adolf Hitler and his National Socialist (Nazi) Party came to power, campaigning against the Versailles Treaty restrictions and subsequently began the rearmament process. In addition to controlling military aircraft, the Treaty of Versailles also provided Part XI Aerial Navigation, which contained eight articles granting certain rights and responsibilities in the area of civil aviation. • Article 313: The aircraft of the AAP shall have full liberty of passage and landing over and in the territory and territorial waters of Germany, and shall enjoy the same privileges as German aircraft, particularly in case of distress by land or sea. • Article 314: The aircraft of the AAP shall enjoy the freedom of transit over the territory of Germany without landing, subject to applicable regulations that govern German aircraft. • Article 315: All aerodromes in Germany open to national public traffic shall be open for the aircraft of the AAP. These aircraft shall be treated the same as German aircraft with regard to charges. • Article 316: Germany can create national aviation regulations and AAP aircraft shall be subject to them without distinction from German aircraft. • Article 317: Certificate of nationality, airworthiness, or competency, and licences, issued or recognised as valid by any of the AAP shall be recognised in Germany as valid and as equivalent to the certificates and licences issued by Germany. • Article 318: As regard to internal commercial air traffic, the aircraft of the AAP shall enjoy in Germany most favoured nation treatment. • Article 319: Germany undertakes to observe certain measures laid down in the Paris Convention 1919. • Article 320: The above obligations shall remain in force until 1 January 1923 unless, prior to this date, Germany is admitted into the League of Nations or has been authorised to adhere to the Paris Convention 1919. It can be seen that Part XI is a multilateral air service agreement that allows civil aircraft of AAP certain freedoms in the German territory. Furthermore, Article 320 links the Treaty of Versailles to an important development in international civil aviation: Paris Convention 1919.

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EARLY DEVELOPMENT IN AIR LAW

2.3.2 Paris Convention 1919 Treaty Information Title of Treaty: Convention Relating to the Regulation of Aerial Navigation Short Title: Paris Convention 1919 Date of Adoption: 13 October 1919 Citation: N/A Entry into Force: 11 July 1922 Legal Status: Not in Force (Superseded)

Further, the Paris Peace Conference, which opened on 18 January 1919, discussed the regulation of international civil aviation. As a result, on 13 October 1919, the Paris Convention 1919 was signed by twenty-­seven States.15 The Paris Convention 1919 was the first multilateral international treaty on civil aviation law and contained nine chapters: • General Principles • Nationality of Aircraft • Certificates of Airworthiness and Competency • Admission to Air Navigation Above Foreign Territory • Rules to be Observed on Departure when Under Way and on Landing • Prohibited Transport • State Aircraft • International Commission for Air Navigation • Final Provisions In addition to recognising the sovereign status of the airspace, facilitating international civil aviation and providing technical requirements, the Paris Convention 1919 also created the International Commission for Air Navigation (ICAN), which was the forerunner to the International Civil Aviation Organization.16 This was an international governing body 15 See, for the text of the Paris Convention 1919, ‘Convention Relating to the Regulation of Aerial Navigation’, 1 Journal of Air Law and Commerce (1930), at 94–108. This includes the amendments brought in by the 1929 Protocol as discussed below. Belgium, Bolivia, Brazil, British Empire, China, Cuba, Czechoslovakia, Ecuador, France, Greece, Guatemala, Haiti, the Hedjaz, Honduras, Italy, Japan, Liberia, Nicaragua, Panama, Peru, Poland, Portugal, Romania, Kingdom of Yugoslavia, Siam and Uruguay. 16 See, Chapter 4.

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EARLY DEVELOPMENT IN AIR LAW placed under the direction of League of Nations, which was tasked with the regulation of international air navigation, including through the development of technical Annexes that supplemented the Convention. Ten years after its adoption, the Paris Convention 1919 was amended by the Protocol of 15 June 1929, which entered into force on 17 May 1933.

Did You Know? World War I revitalised States’ interest and the development of unmanned aircraft. Consequently, there was a desire to regulate these types of civil aircraft at the international level. Protocol of 15 June 1929, Article 15: No aircraft of a contracting State capable of being flown without a pilot shall, except by special authorization, fly without a pilot over the territory of another contracting State. The amending Protocol introduced the first ever legal provision for the regulation of ‘pilotless aircraft’, which may commonly be referred to as ‘unmanned aircraft’ or ‘drones’.

As well as amending Article 15 to include the regulation of ‘pilotless aircraft’, other amendments were made to Articles 3, 5, 7, 34, 37, 40, 41 and 42.

2.4 Madrid Convention 1926 Treaty Information Title of Treaty: Ibero-­American Air Navigation Convention Short Title: Madrid Convention 1926 or CIANA Date of Adoption: 1 November 1926 Citation: N/A Entry into Force: N/A Legal Status: Not in Force

Despite the desire to create an international regime to regulate international civil aviation through the Paris Convention 1919, this desire was not achieved. One contributing factor was that Spain declined to become Party to the Paris Convention 1919, in part due to the drafting of Article 34 which related to the equal voting rights of its members. Spain also

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EARLY DEVELOPMENT IN AIR LAW withdrew from the League of Nations in 1926 due to its claim for a permanent seat on its Council being rejected.17 As aviation transportation began to grow between Spain and South America, and with the failure of the United States, as well as several Central and South American States to join to the Paris Convention 1919, Spain invited Latin American and Caribbean States, and Portugal to the Ibero-­American Conference. The Conference ran on 25–30 October 1926 and was held in Madrid, Spain. The conclusion of the Conference led to the Ibero-­American Convention on Air Navigation (Madrid Convention 1926). The Convention drew heavily from the Paris Convention 1919, whereby the wording was mostly identical, with the core difference being found in the above-­mentioned Article 34. Twenty-­one States attended the Conference in Madrid and signed the Convention on 1 November 1926. However, only seven States ratified it18 and, in 1933, Argentina and Spain renounced the Madrid Convention 1926 and joined the ICAN, which marked the end of the Madrid Convention 1926. Its lack of success is down to several factors: 1. Aircraft were not advanced enough to sufficiently link Europe and Latin America. 2. Spain’s political environment was turbulent at the time, which included a Civil War. 3. Latin America began to focus more on connectivity to North America. 4. It was too similar in content to the more successful Paris Convention 1919 to justify its independent existence.19 The Madrid Convention 1926 never entered into force and was never registered with any international body.

2.5 Havana Convention 1928 Treaty Information Title of Treaty: Pan-­American Convention on Air Navigation Short Title: Havana Convention 1928 or Habana Convention 1928 Date of Adoption: 20 February 1928 Citation: 129 L.N.T.S. 223 Entry into Force: 13 June 1929 Legal Status: Not in Force (Superseded)

17 ICAO, ‘1926: The Ibero-American Convention’, www.icao.int/secretariat/PostalHistory/1926_the_ Ibero_american_convention.htm. 18 Argentina, Costa Rica, Dominican Republic, El Salvador, Mexico, Spain and Paraguay. 19 ICAO, ‘1926: The Ibero-American Convention’, www.icao.int/secretariat/PostalHistory/1926_the_ Ibero_american_convention.htm.

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EARLY DEVELOPMENT IN AIR LAW On 25 March to 3 May 1923, the fifth International Conference of American States met in Santiago, Chile whereby the delegates adopted a resolution providing for the creation of an Inter-­American Commercial Aviation Commission. On 2 and 19 May 1927, the Commercial Aviation Commission met in Washington, United States and formulated the plan to create a Pan-­American Convention of Aerial Navigation. On 16 January to 20 February 1928, under the auspices of the Sixth Pan-­American Conference held in Havana, Cuba, the Pan-­American Convention on Commercial Aviation (Havana Convention 1928) was finalised. The Convention was regarded as having a limited level of success as it provided a degree of harmonisation, while updating the Paris Convention 1919, among the sixteen American States that ratified the Convention.20 The Convention, again drawing on the Paris Convention 1919, recognised in Article 1 the “complete and exclusive sovereignty over the air space above its territory and territorial waters”. However, it did diverge from the Paris Convention 1919 as, for example, Article 4 provided the right of innocent passage during times of peace. Reflecting the Paris Convention 1919, it also covered technical aspects like registration, nationality markings, documents to be carried on board, airworthiness, training and aerodromes. There were weaknesses to the Havana Convention 1928: • The Convention was not flexible as there were no technical Annexes. As a result, all of the rules were in the Articles, so the amendment procedure did not allow for a quick reaction to technological advancements. • There was a lack of uniform technical standards. • There was a limited level of harmonisation as it relied heavily on national law. • There was a lack of clarity on the applicable rules for flights between State Parties and non-­State Parties, such as with those States operating under the Paris Convention 1919. • The Convention did not provide for periodic discussions, such as via a permanent body like a Secretariat. • The Convention contained no administrative provisions and assigned certain coordination duties to the Pan-­American Union, mainly to its conference that convened every five years.21 Due to the above points, the Havana Convention 1928 was not suitable for a fast-­developing international industry and was replaced.

20 Bolivia, Brazil, Chile, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Uruguay, United States and Venezuela. 21 ICAO, ‘1928: The Havana Convention’, www.icao.int/secretariat/PostalHistory/1928_the_havana_ convention.htm.

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EARLY DEVELOPMENT IN AIR LAW

2.6 Time for a New Era The weakness of the three Conventions, combined with the immense wartime development of aviation transport during World War II, provided the need for a new global solution. As a result, the Paris Convention 1919 and Havana Convention 1928 were superseded by the Convention on International Civil Aviation (Chicago Convention 1944)22 pursuant to Article 80. Each contracting State undertakes, immediately upon the coming into force of this Con­ vention, to give notice of denunciation of the Convention relating to the Regulation of Aerial Navigation signed at Paris on October 13, 1919 or the Convention on Commercial Aviation signed at Habana on February 20, 1928, if it is a party to either. As between contracting States, this Convention supersedes the Conventions of Paris and Habana pre­ viously referred to. Due to the lack of interest in the Madrid Convention 1926 by States, it was not necessary to include it in the scope of Article 80. Chapter 3 will introduce the Chicago Convention 1944, which is considered to be the prevailing Convention governing international civil aviation.

Did You Know? There were several key milestones between the signing of the Paris Convention 1919 and the signing on the Chicago Convention 1944:

 1919: An agreement that founded the International Air Traffic Association was signed by representatives of five air transport companies to assist airlines standardise paperwork and passenger tickets, as well as to compare technical procedures. This Association is the predecessor to the International Air Transport Association (IATA).23

 1924: The Universal Postal Union Convention and Final Protocol of Convention were signed in Stockholm, Sweden and included Article 74 Airplane Service.

 1925: The First International Conference of Private Air Law met in Paris, France to discuss the issue of airline responsibility and to codify private air law.

 1926: Aircraft International Register was organised on the initiative of the Bureau Véritas.

 1926: The International Federation of Freight Forwarders Associations was founded in Vienna, Austria.

22 Convention on International Civil Aviation, 7 December 1944, 61 Stat. 1180; 15 UNTS 295. 23 See, Chapter 5.

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EARLY DEVELOPMENT IN AIR LAW

 1927: The First International Air Post Congress met in The Hague, Nether-

lands, which resulted in an agreement that established airlines companies as officially recognised carriers of mail.

 1927: The International Radio Convention met in Washington DC, United States to secure agreement on the use of certain frequencies by aircraft and airway control stations.

 1929: The Convention for the Unification of Certain Rules Relating to International Carriage by Air was signed in Warsaw, Poland.24

 1933: The International Sanitary Convention for Aerial Navigation was signed

in The Hague, The Netherlands (amended in 1944). Its scope was the ensuring protection from imported diseases by aircraft and to persons from diseases due to flying.

 1933: The Convention for the Unification of Certain Rules Relating to Damage Caused by Foreign Aircraft to Third Parties on the Surface (Rome Convention 1933) was adopted.25

 1933: The Convention for the Unification of Certain Rules Relating to the ­Precautionary Arrest of Aircraft was adopted.

 1938: The Additional Protocol related to the Rome Convention 1933 was signed.26

 1938: Convention for the Unification of Certain Rules Relating to the ­Assistance and Rescue of Aircraft or by Aircraft at Sea was adopted.27

The drafters of the Chicago Convention 1944 also made attempts to ensure its integration into the existing international aviation system and remove any conflicts with other agreements. • Article 81 Registration of Existing Agreements • Article 82 Abrogation of Inconsistent Arrangements Finally, Article 83 on the Registration of new arrangements was included to ensure continuing consistency between the Chicago Convention 1944 and new arrangements between States, as “State may make arrangements not inconsistent with the provisions of this 24 See, Chapter 7. 25 See, Chapter 8. 26 See, Chapter 8. 27 See, ICAO, ‘Milestones in International Civil Aviation’, www.icao.int/about-icao/History/Pages/ Milestones-in-International-Civil-Aviation.aspx; and ICAO, ‘International Aviation Organizations Working Alongside ICAN and Dealing Exclusively with Aeronautical Matters’, www.icao.int/ secretariat/PostalHistory/international_aviation_organizations_working_alongside_ican_part_1.htm.

29

EARLY DEVELOPMENT IN AIR LAW Convention. Any such arrangement shall be forthwith registered with the Council, which shall make it public as soon as possible.”

Recommended Literature Clement Bouve, ‘Regulation of International Air Navigation under the Paris Convention’, 6 Journal of Air Law and Commerce (1935), 299–324. John C. Cooper, ‘The International Air Navigation Conference, Paris 1910’, 19 Journal of Air Law and Commerce (1952), 127–148. Paul Larsen, Joseph Sweeney and John Gillick, Aviation Law: Cases, Laws and Related Sources, 2nd edn (Martinus Nijhoff Publishers, 2012). Michael Milde, International Air Law and ICAO, 3rd edn (Eleven Publishing, 2017). Małgorzata Polkowska, ‘The Development of Air Law: From the Paris Conference 1910 to the Chicago Convention of 1944’, 33 Annals Air & Space Law (2008), 59–90. Peter Sand, Jorge de Sousa Freitas and Geoffrey Pratt, ‘An Historical Survey of International Air Law Before the Second World War’, 7 McGill Law Journal 1 (1960–1961), 24–42.

Points for Further Research • What were the different positions taken by States during the Paris Conference on use and access to the airspace, notably France, Germany and the United Kingdom? • Why did the Paris Conference 1910 not result in a Convention? • Why was the Paris Convention 1919 more successful that the Madrid Convention 1926 and Havana Convention 1928? • Was there a need to update the Paris Convention 1919 with a new Convention? • How would the right of innocent passage, as found in the Havana Convention 1928, change modern aviation?

30

Chapter 3

Convention on International Civil Aviation LEARNING OBJECTIVES  Discover in which circumstances the Convention on International Civil Aviation (Chicago Convention 1944) applies.  Discover examples of acts deemed contrary to the purpose of the Chicago Convention 1944.  See the structure of the Chicago Convention 1944.  Be aware of the different amendments to the Chicago Convention 1944.  Understand the dispute settlement process under the Chicago Convention 1944.

3.1 Introduction Since 1919, the aviation landscape had evolved dramatically, mainly spurred on by World War II and the technological advancements that it encouraged. It was, therefore, required to revisit the Convention Relating to the Regulation of Aerial Navigation 19191 and amend international law to appropriately regulate this developing industry in a shrinking world. As a result, the United States invited fifty-­five Allied States to attend an International Civil Aviation Conference in Chicago running on 1 November to 7 December 1944. The result of

1 See, Section 2.3.

31

CONVENTION ON INTERNATIONAL CIVIL AVIATION the conference was the Chicago Convention 1944, which was signed on 7 December 1944 by fifty-­two States.

Treaty Information Title of Treaty: Convention on International Civil Aviation Short Title: Chicago Convention 1944 Date of Adoption: 7 December 1944 Citation: 61 Stat. 1180; 15 UNTS 295 Entry into Force: 4 April 1947 Legal Status: 193 State Parties

The Chicago Convention 1944 has 193 State Parties, which includes all Member States of the United Nations except Liechtenstein. The Convention has been extended to cover Liechtenstein by the ratification of Switzerland. The Cook Islands is a contracting Party to the ­Convention, although it is not a member of the United Nations.

Did You Know? Dominica became a contracting State to the Chicago Convention 1944 on 13 April 2019 making it the most recent State to join. Tuvalu became a contracting State to the Chicago Convention 1944 on 18 November 2017 and the recently formed State of South Sudan did so on 11 October 2011. Thus, there is a desire for States to join and enjoy the rights and exercise the responsibilities contained within the Chicago Convention 1944.

The Chicago Convention 1944 was adopted along with the: • International Air Services Transit Agreement2 • International Air Transport Agreement3 • Interim Agreement on International Civil Aviation The Convention is regarded as one of the most successful international treaties and provides “an overarching and underpinning legal framework to international civil aviation and has

2 See, Chapter 5. 3 Ibid.

32

CONVENTION ON INTERNATIONAL CIVIL AVIATION been referred to as the Magna Carta of international aviation”,4 as well as creating the International Civil Aviation Organization (ICAO).

3.2 Applicability of the Chicago Convention 1944 In order for the Chicago Convention 1944 to be applicable, three criteria must be satisfied: • International • Civil • Aviation The specifics of each will be assessed below.

3.2.1 International 3.2.1.1  International Flight The Chicago Convention 1944 regulates international civil aviation, which corresponds to the operation of services that pass through the airspace of more than one contracting State.5 Article 96 of the Chicago Convention 1944 defines ‘International Air Service’ as: “an air service which passes through the airspace over the territory of more than one State.” In practice, there needs to be a relationship between two or more States in order for the international element to be satisfied.

3.2.1.2  Entrance and Exit of Foreign Airspace Article 1 of the Chicago Convention 1944 confirmed the customary international law principle that a State has sovereignty over its airspace. “The contracting States recognize that every State has complete and exclusive sovereignty over the airspace above its territory.” Thus, it is clear that civil aircraft have no automatic right to fly over or land in the territory of another State, which is also applicable, as affirmed in Article 3(c), to State aircraft. Consequently, the Chicago Convention 1944 had to provide a legal mechanism to allow aircraft from one State to enter the airspace of another State, otherwise international civil aviation would not be possible. • Article 5 Right of Non-­Scheduled Flight • Article 6 Scheduled Air Services • Article 7 Cabotage 4 Pablo Mendes de Leon and Benjamyn I. Scott, ‘An Analysis of Unmanned Aircraft Systems under Air Law’, in Aleš Završnik, Drones & Unmanned Aerial Systems: Legal & Social Implications for Security & Surveillance (Springer, 2016), at 187. 5 See, Michael Milde, International Air Law and ICAO, 3rd edn (Eleven, 2016), at 35–49.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION • Article 8 Pilotless Aircraft • Article 9 Prohibited Areas6 As Articles 5, 6 and 8 of the Chicago Convention 1944 demonstrate, an international flight covers situations where an aircraft of one State flies over or lands in another State. Cabotage flights are also considered international flights pursuant to Article 7 of the Chicago Convention 1944.

Definition Cabotage: A flight between the same point or two different points within the same State by an operator of a different State. For example, a flight between Cologne and Berlin – both in Germany – by an Irish operator, would be a cabotage flight.7 If the international element is not satisfied, then the transit will be considered a domestic flight and regulated outside the scope of the Chicago Convention 1944 at a national level by that State or, where such responsibilities are delegated, by regional aviation authorities like in the EU.8

3.2.1.3 State Article 96, while providing some clarity as to what international means, does not provide a definition of the term ‘State’. The term ‘State’ is used in an inclusive way to include all States and not just the narrower term ‘contracting State’. Thus, the Chicago Convention 1944 leaves it to general public international law to determine the definition of this term. The difference between ‘State’ and ‘contracting State’ has little consequence due to the large number of State Parties to the Chicago Convention 1944.

3.2.1.4 Territorial Scope The physical scope of the State is limited to its territory, which is defined in Article 2 of the Chicago Convention 1944. “For the purposes of this Convention the territory of a State shall be deemed to be the land areas and territorial waters adjacent thereto under the sovereignty, suzerainty, protection or mandate of such State.” Thus, territory can be divided into the airspace above the State’s land and the territorial waters of the State (State territory), and everything else (not State territory). A definition of ‘territorial waters’ can be found in the United Nations Convention on the Law of the Sea, 6 See, Chapter 5. 7 See, Pablo Mendes de Leon, Cabotage in Air Transport Regulation (Martinus Nijhoff Publishers, 1992). 8 See, Regulation (EC) No. 1008/2008 of the European Parliament and of the Council of 24 September 2008 on Common Rules for the Operation of Air Services in the Community, OJ L 293 of 31 October 2008.

34

CONVENTION ON INTERNATIONAL CIVIL AVIATION which declares that States have: “the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles”.9 A flight outside of its State’s territorial waters but which does not interact with another State will not be considered an international flight.10 As the high seas is not subject to State sovereignty, the Chicago Convention 1944 had to provide a mechanism to allow for safe and secure flight in conformity with the law. As a result, Article 12 declares that: “Over the high seas, the rules in force shall be those established under this Convention.” This is a direct reference to the Standards in Annex 2 on Rules of the Air.11 As a result, the Standards are applicable, in their entirety, over the high seas with no possibility to deviate from them under Article 38.12 It is important to note that even though some States offer air traffic control services over the high seas, this does not amount to an extension of sovereignty to these areas.13 The territorial waters and high seas are not the only demarcated area of the sea under international law. For example, there is the contiguous zone, exclusive economic zone, straits used for international navigation and archipelagic waters. The rules relating to airspace over these different areas of the sea are slightly different. Therefore, recourse to the United Nations Convention on the Law of the Sea is required in order to assess the scope of each area, and to assess the applicability of a State’s sovereignty and jurisdiction. The existence of Air Defence Identification Zones (ADIZ) also complicates the matter. “Special designated airspace of defined dimensions within which aircraft are required to comply with special identification and/or reporting procedures additional to those related to the provision of air traffic services.”14 An ADIZ is a part of the airspace, either over land or water, whereby the identification, location and control of civil aircraft is performed by a State in the interest of national security. ADIZ can extend beyond a State’s territory, therefore it could be argued that a State is exercising its sovereignty beyond its territorial limits.15

3.2.1.5  Not Only Aircraft The international element required by the Chicago Convention 1944 is connected to the aircraft. For example, Article 15 on Airport and Similar Charges is found within the Chicago Convention 1944, despite the fact that an airport’s location is static. The focus is on the airport’s connection with aircraft performing international flights.

  9 United Nations Convention on the Law of the Sea, 1833 UNTS 3; 21 ILM 1261 (1982), Art. 3. 10 Flights over the High Seas will be subject to Annex 2 to the Chicago Convention 1944, Rules of the Air, 10th edn (2005). 11 See, Section 4.3.2. 12 See, Section 4.3. 13 Elmar Giemulla, ‘Chicago System: Genesis and Main Characteristics’, in Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law (Kluwer Law International, 2011), at 50–51. 14 Annex 15 to the Chicago Convention 1944, Aeronautical Information Services, 15th edn (October 2015). 15 See, Pai Zheng, ‘Justifications and Limits of ADIZs under Public International Law’, 14 Issues in Aviation Law and Policy 2 (2015), at 183–216.

35

CONVENTION ON INTERNATIONAL CIVIL AVIATION

3.2.2 Aviation 3.2.2.1  Definition of ‘Aircraft’ The Chicago Convention 1944 applies to aviation. However, no definition of the term ‘aviation’ is provided in the text of the Convention and discussions within the context of scope often focus on the definition of ‘aircraft’. The International Commission for Air Navigation adopted a glossary of terms in 1928, which contained a definition of ‘aircraft’: “A machine which can derive support in the atmosphere from reactions of the air”.16 On 6 November 1967, ICAO amended the definition that it inherited from its predecessor and included it in Annex 7 to the Chicago Convention 1944. Thus, the definition is not found within the text of a treaty, but in an annex developed by ICAO pursuant to the Chicago Convention 1944.17 Therefore, its legal status is open to debate. “Any machine that can derive support in the atmosphere from the reactions of the air other than the reactions of the air against the earth’s surface.”18 The revision removed machines that derive support from the reaction of the air against the earth’s surface. Thus, it now excludes all air-­cushion-type machines, such as hovercraft, from the scope of the Convention.19 The International Maritime Organization and ICAO agreed that wing-­in-ground vehicles, which are boats that use aerodynamic lift to operate at low altitudes above the water’s surface, should be subject to the rules and regulations of ICAO if the vehicle is capable of sustained flight outside the influence of the ground.20 However, the maritime regulatory regime will also be applicable, so there will be more than one international legal regime in effect. Fixed Wing (Aeroplane)

Rotorcraft (Helicopter)

Lighter than Air (Balloon)

         It can be seen that rockets, such as military missiles and space exploration launch vehicles, are not considered aircraft and, therefore, fall outside of the scope of the Chicago Convention 1944.21 16 League of Nations, ‘Regulations Concerning the International Employment of Symbols & Terms Used in Aeronautical Technology’, Communication from the International Commission for Air Navigation, C,363, 1928, VIII, Geneva, Switzerland (26 July 1928), at 17. 17 See, Chapter 3. 18 Annex 7 to the Chicago Convention 1944, Aircraft Nationality and Registration Marks, 6th edn (July 2012), at 1. 19 Paul S. Dempsey and Maria Manoli, ‘Space: Functionalism, Spatialism and State Sovereignty’, OOSA/2017/19 (12 September 2017), at 13. 20 International Maritime Organization (IMO), ‘Wing-in-Ground (WIG) Craft’, www.imo.org/en/ OurWork/Safety/Regulations/Pages/WIG.aspx. 21 See, Chapter 3.

36

CONVENTION ON INTERNATIONAL CIVIL AVIATION

3.2.2.2  Aircraft Classifications The term aircraft does not encapsulate one type of vehicle, rather there are numerous subcategories as classified below.

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As a result, the term ‘aircraft’ comprises a number of different machines.

Definitions23 Aeroplane: “A power-­driven heavier-­than-air aircraft, deriving its lift in flight chiefly from aerodynamic reactions on surfaces which remain fixed under given conditions of flight.” Airship: “A power-­driven lighter-­than-air aircraft.” Balloon: “A non-­power-driven lighter-­than-air aircraft.” Glider: “A non-­power-driven heavier-­than-air aircraft, deriving its lift in flight chiefly from aerodynamic reactions on surfaces which remain fixed under given conditions of flight.” Gyroplane: “A heavier-­than-air aircraft supported in flight by the reactions of the air on one or more rotors which rotate freely on substantially vertical axes.” Heavier-­Than-Air Aircraft: “Any aircraft deriving its lift in flight chiefly from aero­ dynamic forces.” 22 Adapted from ICAO, Annex 7 to the Convention on International Civil Aviation (2012). 23 Annex 7 to the Chicago Convention 1944, at 1 and 2.

37

CONVENTION ON INTERNATIONAL CIVIL AVIATION Helicopter: “A heavier-­than-air aircraft supported in flight chiefly by the reactions of the air on one or more power-­driven on substantially vertical axes.” Lighter-­than-Air Aircraft: “Any aircraft supported chiefly by its buoyancy in the air.” Ornithopter: “A heavier-­than-air aircraft supported in flight chiefly by the reactions of the air on planes to which a flapping motion is imparted.” Remotely Piloted Aircraft: “An unmanned aircraft which is piloted from a remote pilot station.” Rotorcraft: “A power-­driven heavier-­than-air aircraft supported in flight by the reactions of the air on one or more rotors.”

The scope of the term ‘aircraft’ is still relevant today due to technology advancements, such as in the areas of unmanned aircraft,24 suborbital activities25 and roadable aircraft.26 It is not always automatically clear if a new technology satisfies the definition of an ‘aircraft’ and falls within the scope of the Chicago Convention 1944. The Chicago Convention 1944, however, also covers, inter alia, aerodromes, radio communications, personnel licensing and air traffic services. Thus, its scope is much broader and not limited to just the vehicle carrying out international transportation.

3.2.3 Civil 3.2.3.1  Definition of ‘State’ Aircraft The Chicago Convention 1944, pursuant to Article 3(a), makes a distinction between ‘State aircraft’ and ‘civil aircraft’. “This Convention shall be applicable only to civil aircraft, and shall not be applicable to state aircraft.” As a result, the Convention is focused on civil aircraft and shall not be applicable to State aircraft. However, in order to separate these two types of aircraft, a definition is required. The Convention does not define ‘civil aircraft’, however a partial definition can be obtained from Article 3(b). “Aircraft used in military, customs and police services shall be deemed to be state aircraft.” As a result, Article 3(b) is not a definition of the term ‘State aircraft’, rather it highlights three services that shall be deemed as State aircraft: • Military • Customs • Police 24 See, for a comprehensive and detailed overview, Benjamyn I. Scott, The Law of Unmanned Aircraft Systems: An Introduction into the Current and Future Regulation of UAS under National, Regional and International Law (Kluwer Law International, 2016). 25 See, Chapter 12. 26 See, for further information, Benjamyn I. Scott, ‘Roadable Aircraft: An Analysis of the Current Legal Environment’, 40 Air & Space Law 3 (2015), at 255–269.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION The use of the word ‘deemed’ means that such aircraft shall be prima facie considered State aircraft until proven otherwise.27 As the 1993 ICAO Secretariat Study on civil and State aircraft highlights, difficulties and uncertainties persist as the aircraft’s status is unclear: (a) when the aircraft is not used in military, customs or police services but is used in other governmental services; (b) when an otherwise civil aircraft with civil crew is used for military purposes; (c) when an [sic] aircraft is chartered, either in whole or in part, to carry military, customs or police personnel and/or cargo, is used in part for carriage of persons or cargo for remuneration; and (d) when an aircraft which could otherwise be considered a State aircraft (possibly with a military crew) is used to carry passengers, cargo or mail for remuneration.28 The wording of Article 3(b) appears to suggest that the list of State aircraft is a non-­ exhaustive list. This point is supported by State practice where other activities have been deemed as ‘State aircraft’. • Border Control • Fire-­Fighting • Search and Rescue • Disaster Relief • Government Transport • Humanitarian Flights • Carriage of Prisoners29 This is confirmed by national laws and EU law as, for example, the EU aviation safety regime does not apply to: (a) aircraft, and their engines, propellers, parts, non-­installed equipment and equipment to control aircraft remotely, while carrying out military, customs, police, search and rescue, firefighting, border control, coastguard or similar activities or services under 27 See, Andre Williams, ‘The Interception of Civil Aircraft over the High Seas in the Global War on Terror’, 59 Air Force Law Review (2007), at 73–151. 28 ICAO Working Paper, ‘State/Civil Aircraft Definition and its Impact on Aviation’, Legal Committee – 36th Session, 29 September 2015, LC/36-WP/2–6, www.icao.int/Meetings/LC36/Working%20 Papers/LC%2036%20-%20WP%202-6.en.pdf. 29 See, Ricardo de Oliveira, ‘The Distinction Between Civil and State Aircraft: Does the Current Legal Framework Provide Sufficient Clarity of Law with Regard to Civil and State Aircraft in Relation to Aviation Practicalities?’, 41 Air & Space Law 4/5 (2016), at 334.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION the control and responsibility of a Member State, undertaken in the public interest by or on behalf of a body vested with the powers of a public authority, and the personnel and organisations involved in the activities and services performed by those aircraft; (b) aerodromes or parts thereof, as well as equipment, personnel and organisations, that are controlled and operated by the military; (c) ATM/ANS, including systems and constituents, personnel and organisations, that are provided or made available by the military; (d) the design, production, maintenance and operation of aircraft the operation of which involves low risk for aviation safety, as listed in Annex I, and to the personnel and organisations involved therein, unless the aircraft has been issued, or has been deemed to have been issued, with a certificate in accordance with Regulation (EC) No 216/2008.30 Eurocontrol has, however, adopted a narrower definition of ‘State aircraft’: Principle 1 For ATM purposes and with reference to article 3(b) of the Chicago Convention, only aircraft used in military, customs and police services shall qualify as State Aircraft. Accordingly: Aircraft on a military register, or identified as such within a civil register, shall be considered to be used in military service and hence qualify as State Aircraft; Civil registered aircraft used in military, customs and police service shall qualify as State Aircraft; Civil registered aircraft used by a State for other than military, customs and police service shall not qualify as State Aircraft.31 The general approach is a functional one, whereby the function of the aircraft is used to determine whether it is a civil or State aircraft. However, as the Eurocontrol definition shows, this is not the only method as it refers to registration. 30 Regulation (EU) 2018/1139 of the European Parliament and of the Council of 4 July 2018 on Common Rules in the Field of Civil Aviation and Establishing a European Union Aviation Safety Agency, and amending Regulations (EC) No 2111/2005, (EC) No 1008/2008, (EU) No 996/2010, (EU) No 376/2014 and Directives 2014/30/EU and 2014/53/EU of the European Parliament and of the Council, and Repealing Regulations (EC) No 552/2004 and (EC) No 216/2008 of the European Parliament and of the Council and Council Regulation (EEC) No 3922/91, OJ L 212 of 22 August 2018, Art. 2(3). 31 Eurocontrol, ‘The Eleventh Session of the Provisional Council, Composed of Civil and Military Representatives, Endorsed the Principles Used to Identify State Aircraft for ATM Purposes’ (12 July 2001), Principle 1.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION If an aircraft is deemed to be a State aircraft, then it will fall outside the scope of the Chicago Convention 1944. Article 35 of the Chicago Convention 1944 does not permit the carrying on “munitions of war or implements of war” by civil aircraft without permission of the subjacent, landing or take-­off State. Thus, an aircraft engaged in such activities may still constitute a civil aircraft under the Chicago Convention 1944. The Chicago Convention 1944 is not alone in annexing State aircraft outside of its scope. This is also evident in the liability and criminal law treaties, as well as bilateral air services agreements. This can be expected as these rules are meant to regulate civil aviation only.

3.2.3.2  Rights and Responsibilities of State Aircraft Article 3(c) declares that no State aircraft “shall fly over the territory of another State or land thereon without authorization by special agreement”, which reflects a State’s sovereignty over its airspace. Further, Article 3(d) declares that “when issuing regulations for their state aircraft, that they will have due regard for the safety of navigation of civil aircraft.”

Definition Due Regard: • Federal Aviation Administration: It is a “phase of flight wherein an aircraft ­commander assumes responsibility to separate his/her aircraft from all other aircraft.”32 • ICAO: Only provides some Standards in its Annexes on the due regard obligation.33 The military authorities have to be fully informed, and conversant with, inter alia, the types of civil aircraft operation and relevant regulations and special rules.34 As a result, State aircraft are not fully excluded from the scope of the Convention, but the  operation of State aircraft is mostly subject to national law and other international agreements.35

3.2.3.3  Definition of ‘Civil’ Aircraft If the aircraft is not a State aircraft, then it is deemed to be a civil aircraft. Civil aircraft may be engaged in a number of activities and can be classified into three main categories: • Commercial air transport provided to the public by scheduled or non-­scheduled carriers; 32 FAA, Air Traffic Control Order 7110.65W, at 1–2–1. 33 See, Annex 2 to the Chicago Convention 1944, Rules of the Air, 10th edn (July 2005). 34 ICAO, Manual Concerning Safety Measures Relating to Military Activities Potentially Hazardous to Civil Aircraft Operations, ICAO Doc. 9554. 35 See, Duncan Blake and Ian Henderson, ‘Military Use of Civil-Registered Aircraft’, 36 Annals Air and Space Law (2011), at 133–168; Natalino Ronzitti and Gabriella Venturini (eds), The Law of Air Warfare: Contemporary Issues (Eleven Publishing, 2006).

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CONVENTION ON INTERNATIONAL CIVIL AVIATION • Private flying for business or pleasures;36 and • a wide range of specialized services commonly called aerial works.37 It is the latter that causes issues, such as agriculture, remote surveillance, photography and video, news coverage, and mountain rescue as these may be carried out by both public and private entities. The functionalist to defining an aircraft as either civil or State is, thus, not watertight. Other factors may also help determine the status of the aircraft. • Design of the aircraft • Registration • Ownership38 Thus, the classification of an aircraft as either ‘State’ or ‘civil’ is a subjective test as it will depend upon the aircraft’s use in that particular context.

3.3  War and Emergency Conditions While the Chicago Convention 1944 applies to international civil aviation, Article 89 provides that in cases of war or national emergency, whereby in the latter case notification is made to the Council, the provisions of the Chicago Convention 1944 shall not apply.39 This could include the entirety of the Convention or just specific Articles. An example took place on 28 November 1962 when India informed ICAO that “a state of grave emergency existed and the Government of India may not find it possible to comply with any or all provisions of the Convention.”40 Article 89 has also been invoked for reasons of ‘war’, as for example Egypt wrote that Israeli aircraft may not fly over Egypt airspace due to a “state of war existing since 14 May 1948, the date of outbreak of hostilities in Palestine”.41 The application of Article 89 should be seen within the wider context. For example, Irrespective of Article 89 of the Chicago Convention, the legitimacy of forcible countermeasures against civil aircraft in flight must be determined solely within the purview of article 3bis of the Convention and Article 51 of the Charter.42 36 An aircraft operation that is neither commercial air transport operation nor an aerial work operation is considered as ‘General Aviation’. Annex 6 to the Chicago Convention, Operation of Aircraft, Part II – International General Aviation – Aeroplanes, 9th edn (July 2016). 37 Ruwantissa Abeyratne, Convention on International Civil Aviation (Springer, 2014), at 59. 38 Michael Milde, ‘“Rendition Flights” and International Air Law’, Redress (June 2008), at 9. 39 Jiefang Huang, Aviation Safety Through the Rule of Law: ICAO’s Mechanisms and Practices (Kluwer Law International, 2009), at 92. 40 ICAO Doc. 8900/2. Repertory – Guide to the Convention on International Civil Aviation, 2nd edn (1977), at 1 and 2. 41 Ibid. 42 Robin Geiß, ‘Civil Aircraft as Weapons of Large-Scale Destruction: Countermeasures, Article 3bis of the Chicago Convention, and the Newly Adopted German “Luftsicherheitsgesetz” ’, 27 Michigan Journal of International Law 1 (2005), at 253.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION A State has the right to countermeasures under international law, such as self-­defence under Article 51 of the Charter of the United Nations.43 Therefore, there are other legal mechanisms open to a State to lawfully deviate from its obligations under the Chicago Convention 1944.

3.4 Purpose of the Chicago Convention 1944 3.4.1 Preamble The Preamble provides guidance on the purpose and aims of the Chicago Convention 1944: Whereas the future development of international civil aviation can greatly help to create and preserve friendship and understanding among the nations and peoples of the world, yet its abuse can become a threat to the general security and; Whereas it is desirable to avoid friction and to that cooperation between nations and peoples upon which the peace of the world depends; Therefore, the undersigned Governments having agreed on certain principles and arrangements in order that international civil aviation may be developed in a safe and orderly manner and that international air transport services may be established on the basis of equality of opportunity and operated soundly and economically.44 The Preamble, in providing interpretative guidance,45 shows that its aim is to facilitate international cooperation for the pursuance of global peace and security, and furtherance of aviation safety.

3.4.2  Misuse of Civil Aviation Article 4 of the Chicago Convention 1944 declares that: “[e]ach contracting State agrees not to use civil aviation for any purpose inconsistent with the aims of this Convention.” The question is, then, what is the aim of the Chicago Convention 1944? According to the ICAO Study on Article 4 conducted by the Secretary-­General, “an inconsistent purpose with the aims of this Convention” has to be interpreted to mean “threats to the general security”.46 Therefore, such acts by States that threaten general security through the use of aviation would come under the scrutiny of Article 4. Article 4 has limited application as it is focused on State-­to-State relations, keeping within the scope of the Chicago Convention 1944, which is the designation of rights and responsibilities of States within the context of international civil aviation. As a result, it is not concerned with the acts of individuals or companies.47  43 Charter of the United Nations, 24 October 1945, 1 UNTS 16 (1945). 44 Chicago Convention 1944, Preamble. 45 Vienna Convention on the Law of Treaties, 23 May 1969, 1155 UNTS 331; 8 ILM 679 (1969), Art. 32. 46 ICAO Council, ‘ “Misuse” of Civil Aviation’, 117th Session, C·WP/8217 (18 March 1986). 47 See, Draft Articles on Responsibility of States for Internationally Wrongful Acts (November 2001), Supplement No. 10 (A/56/10), Ch. IV.E.1, Ch. 2.

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3.4.3  Use of Weapons Against Civil Aircraft Cuba provided a practical example of such acts deemed inconsistent with the aim of the Chicago Convention 1944 during the twenty-­fifth (Extraordinary) Session of the Assembly in Montreal on 24 April to 10 May 1984.  Acts of aggression, infiltration or espionage involving discharge of harmful substances or pathogenic agents; transport of contraband or prohibited traffic using the airspace of another State, even with destination to a third State or with any other purpose inconsistent with the aims of the Convention.48 This could include the shooting down of civilian aircraft as found in Article 3 bis and the destruction of Gaza International Airport as acts that are inconsistent with the aims of the Chicago Convention 1944.49 Article 3 bis of the Chicago Convention 1944 is an amendment to the original text and covers the use of weapons against civil aircraft.

Did You Know? There are examples of ‘weapons’ being used against civilian aircraft:50 Libyan Arab Airlines Flight 114: An early example is the case of the Libyan aircraft that was shot down by an Israeli missile in 1973 resulting in the tragic deaths of 106 people on board.51 Korean Air Lines 007: On 1 September 1983, a scheduled Korean Air Lines flight from New York City, United States to Seoul, South Korea was shot down by a Soviet Su-­15 interceptor aircraft, when, en route from Anchorage to Seoul; it allegedly deviated from its flight path and flew through the prohibited Soviet airspace. Malaysia Airlines MH17: The most recent case of weapons being used against civilian aircraft happened on 7 July 2014, when Malaysia Airlines flight MH17 from Amsterdam, The Netherlands to Kuala Lumpur, Malaysia was shot down by a Buk surface-­to-air missile over Ukraine at an altitude of 33,000 feet, tragically killing all 298 persons on board.52 48 Abeyratne, Convention on International Civil Aviation: A Commentary (2014), at 75. 49 Ibid., at 75–94. 50 See, for historical overview, Brian Foont, ‘Shooting Down Civilian Aircraft: Is There an International Law’, 72 Journal of Air Law and Commerce (2007), at 695–725. 51 See, for more information, Resolution A 19–1: Shooting Down of a Libyan Civil Aircraft by Israeli Fighters on 21 February 1973, in ICAO, Assembly Resolutions in Force (as of 8 October 2004), Doc. 9848, at 1–27. 52 See, Stefan A. Kaiser, ‘Legal Considerations about the Loss of Malaysia Airlines Flight MH17 in Eastern Ukraine’, 40 Air and Space Law 2 (2015), at 107–121; Pinar Ölçer, ‘The Downing of MH17: Fact-Finding and Constructing a Legal Response’, 42 Air & Space Law 2 (2017), at 137–162; Paul Freeman, et al., ‘Lightning Doesn’t Strike Twice: The Tragedy and Challenges of the MH370 and MH17 Losses’, 42 Air & Space Law 4/5 (2017), at 423–442.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION It was not until 1983, with the shooting down of Korean Air Lines Flight 007 that the international community was provoked to amend the Chicago Convention 1944 with a specific Article. The reaction of the international community was to amend the Chicago Convention 1944 with the inclusion of Article 3 bis, which was adopted by consensus on 10 May 1984, less than one year on from Flight 007, by the twenty-­fifth Session (Extraordinary) of the Assembly.53 Article 3 bis (a) provides: The contracting States recognize that every State must refrain from resorting to the use of weapons against civil aircraft in flight and that, in case of interception, the lives of persons on board and the safety of aircraft must not be endangered. This provision shall not be interpreted as modifying in any way the rights and obligations of States set forth in the Charter of the United Nations.54 The Article, as an amendment, requires adoption by States. It entered into force on 1 October 1998 and has 156 State Parties. As a result, the amendment is not binding on those contracting States that have yet to adopt Article 3 bis. Article 3 bis uses the term ‘recognise’, so it has been argued by some commentators that this is “not a new rule of law”, but the recognition of “the existence of a prior rule binding on all parties and prohibiting the use of weapons against civil aircraft in flight”.55 It is simply a codification of other sources of law.56 Article 3 bis uses the term ‘every State’, which shows that the effect of the Article is not limited to contracting States. This position is not universally held, but it highlights the fact that Article 3 bis may have wider application than to the 156 State Parties. In order for Article 3 bis to apply, three criteria must be satisfied: 1. The event must involve a ‘weapon’. A definition of the term ‘weapon’ is missing from international law. 53 Protocol Relating to an Amendment to the Convention on International Civil Aviation [Article 3 bis], Doc 9436, Signed at Montreal, Canada (10 May 1984). 54 See, for a general overview of Article 3 bis, Abeyratne, Convention on International Civil Aviation (2014), at 67–73. 55 G. Guillaume, ‘The Destruction on 1 September 1983 of the Korean Airlines Boeing (Flight KE 007)’, ITA Magazine No. 0–18 (1984), at 34, in Huang, Aviation Safety Through the Rule of Law: ICAO’s Mechanisms and Practices (2009), at 84–88. 56 Article 3 bis is declaratory of the existing general international law with respect to the following elements: (a) the obligation of States to refrain from resorting to the use of weapons against civil aircraft in flight; (b) the obligation, in case of interception, not to endanger the lives of persons on board and the safety of aircraft; (c) the right of States to require landing at a designated airport of a civil aircraft flying above its territory without authority or if there are reasonable grounds to conclude that it is being used for any purpose inconsistent with the aims of the Convention. ICAO, ‘Administrative Package for Ratification of the Protocol on Article 3 Bis’, www.icao.int/ secretariat/legal/Administrative%20Packages/3bis_en.pdf.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION The term ‘weapons’ has not been defined but its interpretation in practice should not cause any difficulties when the ordinary meaning of the word is considered; it would include guns, machine guns, cannons, missiles or targeted drones or any other object or substance that can damage or destroy an aircraft in flight.57 While this ordinary meaning may be clear for conventional weapons, such as missiles, this is not the case for other forms of attack, such as cyberattacks. 2. The weapon must be used ‘against civil aircraft’. 3. The aircraft must be ‘in flight’. This term could include factual reasoning, so it means while the aircraft is off the ground relying on aerodynamic lift. Alternatively, it could be read in line with other aviation treaties, for example, the Tokyo Convention 1963 in Article 1(3) provides a different definition for the term ‘in flight’ which is wider.58 If these three criteria are satisfied, then the act is prohibited by the Chicago Convention 1944. Article 3 bis may need to be re-­examined in light of the September 11 terrorist attacks in the United States. In this event, the aircraft itself was used as a ‘weapon’ against targets on the ground, as opposed to the aircraft being the target of the ‘weapon’. The last sentence of Article 3 bis (a) makes it clear that a State may still shoot down civilian aircraft as long as it is doing so in conformity with Article 51 of the Charter of the United Nations 1945. In other words, it is permitted, if it is in self-­defence.59

3.5  Breakdown of the Chicago Convention 1944 The Chicago Convention 1944 consists of four parts that tackle specific aspects.

3.5.1 Part I Air Navigation • Chapter I General Principles and Application of the Convention • Chapter II Flight Over Territory of Contracting States • Chapter III Nationality of Aircraft 57 Milde, International Air Law and ICAO (2016), at 61. 58 See, Chapter 6. 59 Charter of the United Nations 1945, Art. 51: Nothing in the present Charter shall impair the inherent right of individual or collective selfdefence if an armed attack occurs against a Member of the United Nations, until the Security Council has taken measures necessary to maintain international peace and security. Measures taken by Members in the exercise of this right of self-defence shall be immediately reported to the Security Council and shall not in any way affect the authority and responsibility of the Security Council under the present Charter to take at any time such action as it deems necessary in order to maintain or restore international peace and security.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION • Chapter IV Measures to Facilitate Air Navigation • Chapter V Conditions to be Fulfilled with Respect to Aircraft • Chapter VI International Standards and Recommended Practices Chapter I and Chapter II deal with legal aspects of international civil aviation such as sovereignty, scope of the Chicago Convention 1944 and the facilitation on international air transport. Chapters III–V deal with practical aspects of international civil aviation. This includes, inter alia, registration of aircraft, display marks, customs and immigration, accident and investigation, air navigation, documentation, radio equipment, certificates of airworthiness and their recognition, and cargo restrictions. The topics of these Articles are well articulated and expanded upon in the comprehensive work of ICAO, such as in the 19 Annexes to the Chicago Convention 1944.60 Finally, Chapter VI covers, among other things, the adoption, application and notification of differences from the ICAO Annexes.

3.5.2 Part II International Civil Aviation Organization • Chapter VII The Organization • Chapter VIII The Assembly • Chapter IX The Council • Chapter X The Air Navigation Commission • Chapter XI Personnel • Chapter XII Finance • Chapter XIII Other International Arrangements Part II contains the necessary provisions for the setting up of ICAO and instructions on how this should be achieved.

3.5.3 Part III International Air Transport • Chapter XIV Information and Reports • Chapter XV Airports and Other Air Navigation Facilities • Chapter XVI Joint Operating Organizations and Pooled Services

60 See, Chapter 4.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION Chapter XIV requires that international airlines shall file with the Council traffic reports, cost statistics and financial statements in accordance with the requirements laid down by the Council. Chapter XV contains numerous provisions on airports and other air navigation facilities. These include: • Designation of Routes and Airports • Improvement of Air Navigation Facilities • Financing of Air Navigation Facilities • Provision and Maintenance of Facilities by the Council • Acquisition or Use of Land, Expenditure and Assessment of Funds • Technical Assistance and Utilization of Revenues • Taking Over of Facilities from the Council • Return of Funds Chapter XVI, Articles 77–79 of the Chicago Convention 1944 contain provisions on Joint Operating Organisations, which generally “are bodies established by States through their governments or airlines, which may be state-­owned or privately owned, for the purpose of operating air services or pooling their resources.”61 Examples include: • Scandinavian Airlines System (SAS) • Tasman Empire Airways • British Commonwealth Pacific Airlines62 For example, SAS is the flag carrier of Sweden, Norway and Denmark.

3.5.4 Part IV Final Provisions • Chapter XVII Other Aeronautical Agreements and Arrangements • Chapter XVIII Disputes and Default • Chapter XIX War • Chapter XX Annexes • Chapter XXI Ratifications, Adherences, Amendments, and Denunciations63

61 Sami Shubber, Jurisdiction Over Crimes on Board Aircraft (Brill, 1973), at 117. 62 See, Section 6.5. 63 See, Chicago Convention 1944, Arts 91–94.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION The final Part contains Articles that cover the remaining issues that were not in other Parts, of which are explored in detail throughout this book.

3.6 Transfer of Responsibility Article 83 bis allows the transferable of certain responsibility of States found in the Chicago Convention 1944 from the State of registry to the State of the operator. The responsibilities pertain to only the Rules of the Air (Article 12), Radio Licensing (Article 30), Airworthiness of Aircraft (Article 31) and Crew Licensing (Article 32(a)). The Article, therefore, does not allow for the transfer of any other responsibility outside of these four Articles and their related Annexes.64 While the transfer of responsibility is provided, the transfer of ownership or jurisdiction are not provided for under Article 83 bis. Article 83 bis is further limited. It is an amendment to the Chicago Convention 1944 and because of this, it is only applicable to the States that have ratified the amendment. Transfer of responsibility is not unilateral nor automatic. This is because the transfer of responsibility requires that such a transfer be expressly arranged through an agreement between the concerned States.65 The transfer must be negotiated and agreed upon. The transfer will not be effective until it has been registered and made public by ICAO.

Did You Know? Within maritime, a phenomenon of ‘Flag of Convenience’ arose. This is where a ship is registered in a specific State in order to avoid financial charges, such as taxation, or restrictive regulations. Thus, the ship’s registration is not determined by the owner’s nationality, but on another consideration.    An aircraft has the nationality of the State in which they are registered pursuant to Article 17 of the Chicago Convention 1944. Article 18 forbids dual registration but allows for re-­registration. As a result, registration is mandatory and important for linking the aircraft to a State. However, flags of convenience have not been as prevalent in aviation.66    The amendment to the Chicago Convention through Article 83 bis reinforces the principle that the concept of ‘flags of convenience’ has no place within the ICAO system. Had ‘flags of convenience’ been acceptable, it would not have been

64 See, Frank Manuhutu, ‘Article 83 bis (Revisited): Transfer of Safety Oversight Responsibilities Seen from a European Regulator’s Perspectives’, in Pablo Mendes de Leon, From Lowlands to High Skies: A Multilevel Jurisdictional Approach Towards Air Law, Essays in Honour of John Balfour (Martinus Nijhoff Publishers, 2013). 65 ICAO Cir 295 LE/2, Guidance on the Implementation of Art. 83 bis of the Convention on International Civil Aviation (2003), at 5. 66 See, Allan I. Mendelsohn, ‘Flags of Convenience: Maritime and Aviation’, 79 Journal of Air Law and Commerce (2014), at 151–159; and Philip Donges Snodgrass, ‘Aviation Flags of Convenience: Ireland and the Case of Norwegian Airlines International’, 14 Issues in Aviation Law and Policy 2 (2015), at 245–276.

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necessary for ICAO to spend several decades in negotiating and adopting Article 83 bis and to bring it into force.67    The system is therefore based on a transfer of certain responsibilities, as opposed to registration.

Article 83 bis was created to facilitate the increasing practice of aircraft leasing. An aircraft would be registered in State A, but it would be leased to an operator of State B. As State B has a stronger link to the aircraft, which may never enter State A’s territory, Article 83 bis allows the State with a stronger link to exercise certain safety functions.

3.7 Amendments Since the adoption of the Chicago Convention 1944, there have been three amendments that have introduced new Articles to the text:68 1. Article 3 bis: Non-­use of weapons against civil aircraft in flight: 155 State Parties. 2. Article 83 bis: Transfer of certain functions and duties: 174 State Parties. 3. Article 93 bis: Expulsion from ICAO or suspension of membership: 118 State Parties. In addition, corrections have been made to the Convention in certain specific areas. • Seat of the Organization • Increase Council Members • Increase ANC Members • Frequency of Assembly Sessions and Budgets • Increase of languages to now include English, French, Spanish, Russian, Arabic and Mandarin69 Due to the amendments, it is important to use the most up-­to-date version of the Chicago Convention 1944. While the English version of the Chicago Convention 1944 is the most cited, each language has the same legal status.  In addition to amending the Chicago Convention 1944, States can denunciate it “three years after its coming into effect by notification addressed to the Government of the United States of America, which shall at once inform each of the contracting States.”70 This “shall take

67 Huang, Aviation Safety Through the Rule of Law: ICAO’s Mechanisms and Practices (2009), at 23. 68 Chicago Convention 1944, Art. 94. 69 See, for the text of these amendments, ICAO, ‘Current Lists of Parties to Multilateral Air Law Treaties’, www.icao.int/secretariat/legal/lists/current%20lists%20of%20parties/allitems.aspx. 70 Chicago Convention 1944, Art. 95(a).

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CONVENTION ON INTERNATIONAL CIVIL AVIATION effect one year from the date of the receipt of the notification and shall operate only as regards the State effecting the denunciation.”71 As of yet, no State has exercised this right. 

3.8  Dispute Settlement 3.8.1 Role of the International Civil Aviation Organization Council Pursuant to Article 54(n), the Council shall “Consider any matter relating to the Convention which any contracting State refers to it”, which can include complaints involving non-­ compliance with the Chicago Convention 1944.72 In such cases, the Rules for Settlement of Differences73 shall apply. In practice, such matters are not put forward for formal adjudication, thus, the Rules for Settlement of Differences do not apply, and the States are instead given the opportunity to present the dispute before the Council under Article 53.74 However, as of Article 53, “[n]o member of the Council shall vote in the consideration by the Council of a dispute to which it is a party”. In most parts, the Council will make ‘recommendations’ or ‘suggestions’ to the States but may also take a ‘decision’. Chapter XVIII Disputes and Default elaborates on dispute settlement.

Definition Dispute: In the Mavrommatis Case, the PCIJ defined this as “a disagreement on a point of law or fact, a conflict of legal views or of interests between two persons.”75 Article 84 declares that: If any disagreement between two or more contracting States relating to the interpretation or application of this Convention and its Annexes cannot be settled by negotiation, it shall, on the application of any State concerned in the disagreement, be decided by the Council. Here, the Council shall decide on any disagreement between two or more States founded on the interpretation or application of the Convention and its Annexes, whereby negation has not settled the matter. 71 Chicago Convention 1944, Art. 95(b). 72 A dispute may also arise out of Articles 54(j) and (k) of the Chicago Convention 1944. 73 Rules for Settlement of Differences, ICAO Doc. 7782. 74 Ludwig Weber, ‘International Organizations’, in Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law (Kluwer Law International, 2011), at 87 and 101–102. 75 The Mavrommatis Palestine Concessions (Greece v. United States), Permanent Court of International Justice, Publication Series A – No. 2, 30 August 1924, at 11. See, Luping Zhang, ‘The Role of the Dispute Settlement Body (DSB) in the World Trade Organization (WTO) in the Aircraft ­Manufacturing Industry: In the Time of the Bombardier Case’, 43 Air and Space Law 2 (2018), at 179–189; Robert Ricketts, ‘Arbitration Clauses in Aviation Insurance Contracts: Are They Fit for Purpose?’, 42 Air and Space Law 6 (2017), at 571–582.

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Definition Interpretation: This is the role of the States to understand the text of the Convention, in line with Articles 31 and 32 of the VCLT.76 Application: This is the process of the identifying the source of law (i.e. the Chicago Convention 1944) and then the relevant entities executing the articles of that source of law. These definitions are not settled, so differences may exist in international law commentaries.77 A total of six disputes have been addressed under this Article since ICAO was established in 1944. • India v. Pakistan (1952) • United Kingdom v. Spain (1967) • Pakistan v. India (1971) • Cuba v. United States (1998) • United States v. Fifteen States of the European Union (2000)78 • United States v. Brazil (2016)79 • Qatar v. Bahrain, Egypt, Saudi Arabia and United Arab Emirates (2017). The Council has, however, never issued a decision on the merits of a case.80

Did You Know? The most recent disputes at the Council involved the breakdown of the diplomatic relationship between Qatar and its neighbours, most prominently Bahrain, Egypt, Saudi Arabia and United Arab Emirates.    Qatar filed two complaints to the Council:

76 VCLT, Arts 31 and 32. 77 See, Chang-Fa Lo, ‘The Difference Between Treaty Interpretation and Treaty Application and the Possibility to Account for Non-WTO Treaties During WTO Treaty Interpretation’, 22 Indiana International & Comparative Law Review 1 (2012), at 1–25. 78 See, for case summaries, Milde, International Air Law and ICAO (2016), at 204–209. 79 ICAO, ‘Settlement of Differences’, www.icao.int/annual-report-2017/Pages/supporting-implemen tation-strategies-legal-and-external-relations-services-settlement-of-differences.aspx. 80 Mathieu Vaugeois, Settlement of Disputes at ICAO and Sustainable Development, Occasional Paper Series, No. IV (June 2016).

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 concerning the interpretation and application of the Chicago Convention 1944 on Civil Aviation (1944) and its Annexes,

 interpretation and application of the International Air Services Agreement.81 This was based on the fact that the four States limited access to their airspace to Qatari flights due to claim that Qatar was supporting terrorism activities. The ICAO Council agreed to grant Qatar the opportunity to express its demands.82 The Council did not decide on the matter, it agreed to consider the matter.    The four States objected to this position taken by the Council and appealed the decision before the ICJ.83 As a result, the Council will not consider Qatar’s claims until the judgement of the ICJ.84 The ICJ ruling will determine the validity of the Council’s decision on allowing Qatar to submit the two complaints, and not the legality of the actions of the States.    There is a separate case before the ICJ concerning the International Air Transit Agreement which is an “Appeal Relating to the Jurisdiction of the ICAO Council under Article II, Section 2, of the 1944 International Air Services Transit Agreement”.

The provisions of the Chicago Convention 1944 with respect to disputes are supplemented by the Rules of Procedure for the Settlement of Differences (the Rules) adopted by the Council.85 Apart from its mandate for the settlement of disputes, the Council, by virtue of Article 66 of the Chicago Convention 1944, also has jurisdiction over the settlement of disputes under the International Air Services Transit Agreement and the International Air Transport Agreement. Moreover, the Council has been entrusted by the Assembly, during its First Session in 1947, to act as an arbitral body for disputes arising among contracting States relating to international civil aviation matters, when expressly requested to do so by all parties to such dispute.86

81 See, Chapter 5. 82 See, Sg Sreejith, ‘Legality of the Gulf Ban on Qatari Flights: State Sovereignty at Crossroads’, 43 Air & Space Law 2 (2018), at 191–204. 83 See, for more information, ICJ, ‘Appeal Relating to the Jurisdiction of the ICAO Council under Article 84 of the Convention on International Civil Aviation (Bahrain, Egypt, Saudi Arabia and United Arab Emirates v. Qatar)’, www.icj-cij.org/en/case/173. 84 Chicago Convention 1944, Art. 86. 85 ICAO, Rules for the Settlement of Differences, ICAO Doc 7782/2. See, Armand de Mestral, ‘Settlement of Dispute at ICAO and Sustainable Development’, in Arman de Mestral et al. (eds), Sustainable Development, International Aviation, and Treaty Implementation (Cambridge University Press, 2018), at 201–202. 86 ICAO, Assembly Resolution A1–23.

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3.8.2 Appeals after the International Civil Aviation Organization Council The Chicago Convention 1944 provides for an appeal process from the decision of the Council in Article 84. One of two fora may be utilised by a contracting State pursuant to Article 85: • Arbitral9 tribunal agreed upon with the other parties to the dispute; or • Permanent Court of International Justice (now the ICJ). Recourse to arbitral tribunal must be based upon agreement between the parties to the dispute. If a contracting State to a dispute has neither accepted the Statute of the ICJ nor can agree on the choice of the arbitral tribunal, then Article 85 will be relied upon to administer the arbitration process. The ICJ can become involved with a dispute via in three ways: • States accept the Court’s jurisdiction pursuant to Article 36(2) of the ICJ’s Statute.87 • The dispute settlement provisions as found in the international criminal treaties.88 • Article 84 of the Chicago Convention 1944, following a decision of the Council. The ICJ has been requested to rule on a number of cases per the second scenario, however, most were dismissed due to a lack of jurisdiction or because the States reached an agreement prior to the case being heard before the Court.89 Only three cases went before the ICJ.

Case REPORT

lockerbie

 Case Concerning Questions of Interpretation and Application of the 1971 Montreal Convention

Arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v. United States), Judgement of the ICJ, 27 February 1998.

As a result of the Lockerbie bombing, which saw the total loss of PanAm flight 103 on 21 December 1988, killing all 259 persons on board and a further 11 persons on the ground, the case was brought before the ICJ, but it was removed from the Court’s List on 10 September 2003. This was because both Parties agreed that the two accused of the bombing should be tried by five Scottish judges sitting in a neutral court within The Netherlands.90

87 Statute of the International Court of Justice 3 Bevans 1179; 59 Stat. 1031; T.S. 993; 39 AJIL Supp. 215 (1945), at Art. 36(2). 88 See, Chapter 6. 89 Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017), at 30–34. 90 See, Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of the Netherlands Concerning a Scottish Trial in The Netherlands, Treaty No. 35699, 2062 UNTS 82–99 (1988).

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Case REPORT

QATAR DISPUTE 1

Case REPORT

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QATAR DISPUTE 2

 Appeal Relating to the Jurisdiction of the ICAO Council under Article 84 of the Convention on International Civil Aviation (Bahrain, Egypt, Saudi Arabia and United Arab Emirates v. Qatar)91

This case is pending trial.92

 Appeal Relating to the Jurisdiction of the ICAO Council under Article II, Section 2, of the 1944

International Air Services Transit Agreement (Bahrain, Egypt and United Arab Emirates v. Qatar)93

This case is pending trial.

Pursuant to Article 86, the “decisions of the Permanent Court of International Justice and of an arbitral tribunal shall be final and binding.” As a result, these forms of dispute settlement mark the final tier in the dispute settlement system.

3.8.3 Penalties Within a specified set of circumstances with regards to airlines,  [e]ach contracting State undertakes not to allow the operation of an airline of a contracting State through the airspace above its territory if the Council has decided that the airline concerned is not conforming to a final decision rendered in accordance with the previous Article.94  91 ICJ, ‘Appeal Relating to the Jurisdiction of the ICAO Council under Article 84 of the Convention on International Civil Aviation (Bahrain, Egypt, Saudi Arabia and United Arab Emirates v. Qatar)’, www.icj-cij.org/en/case/173. 92 See, Sreejith, ‘Legality of the Gulf Ban on Qatari Flights: State Sovereignty at Crossroads’ (2018). 93 ICJ, ‘Appeal Relating to the Jurisdiction of the ICAO Council under Article II, Section 2, of the 1944 International Air Services Transit Agreement (Bahrain, Egypt and United Arab Emirates v. Qatar)’, www.icj-cij.org/en/case/174. 94 ICAO, ‘ICAO: Frequently Asked Questions: Can States Sanction Other States Through ICAO?’, www.icao.int/about-icao/FAQ/Pages/icao-frequently-asked-questions-faq-4.aspx.

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CONVENTION ON INTERNATIONAL CIVIL AVIATION As a result, the Chicago Convention 1944, pursuant to Article 87, contains penalties for airlines. Within the context of dispute settlement between State Parties, pursuant to Article 88 of the Chicago Convention 1944, a State Party shall have its voting power in the Assembly and Council suspended if it is found to be at fault under the Articles on dispute settlement. As a result, the Chicago Convention 1944, also contains penalties for States.

Recommended Literature Ruwantissa Abeyratne, Convention on International Civil Aviation (Springer, 2014). Paul Dempsey, ‘Flights of Fancy and Fights of Fury: Arbitration and Adjudication of Commercial and Political Disputes in International Aviation, 32 Georgia Journal of International and Comparative Law 2 (2004), 231–305. Jiefang Huang, Aviation Safety Through the Rule of Law: ICAO’s Mechanisms and Practices (Kluwer Law International, 2009). ICAO (International Civil Aviation Organization) website at www.icao.int. Michael Milde, International Air Law and ICAO, 3rd edn (Eleven, 2016). ICAO, Annex 7 to the Convention on International Civil Aviation: Aircraft Nationality and Registration Marks, 6th edn (International Civil Aviation Organization, 2012). Ludwig Weber, International Civil Aviation Organization: An Introduction, 3rd edn (Kluwer Law International, 2017).

Points for Further Research • What is the correct test for classifying an aircraft as ‘civil’ or ‘State’? • Is the Chicago Convention 1944 able to appropriately regulate new technologies? • What law is applicable to State aircraft? • Should the Chicago Convention 1944 be replaced by a modern convention? • How effective is the dispute settlement system at ICAO?

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Chapter 4

International Civil Aviation Organization LEARNING OBJECTIVES  Discover the aims and objectives of International Civil Aviation Organization (ICAO).  Know the legal basis for ICAO, its structure and functions.  Identify the nineteen Annexes to the Chicago Convention 1944.  Understand how States can transfer their responsibilities found under the Annexes.  Discover how ICAO interacts with other organisations.

4.1 Introduction Prior to the ratification of the twenty-­six States, as required by Article 91 of the Convention on International Civil Aviation1 (Chicago Convention 1944) for it to come into force, the Provisional International Civil Aviation Organization (PICAO) was established which functioned on 6 June 1945 until 4 April 1947. PICAO was established by the Interim Agreement on International Civil Aviation,2 which provided the legal basis to create an international civil aviation organisation prior to the coming into force of the Chicago Convention

1 Convention on International Civil Aviation, 7 December 1944, 61 Stat. 1180; 15 UNTS 295. 2 Interim Agreement on International Civil Aviation, 7 December 1944, 59 Stat. 1516; Executive Agreement Series 469.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION 1944. The Chicago Convention 1944 received its twenty-­sixth ratification on 5 March 1947 and the ICAO existed as of 4 April 1947.3

Did You Know? At the Chicago Conference, four main proposals were put forward on how an international organisation for civil aviation should look.4 Australia and New Zealand: Aviation should be seen as an international activity, as such there should be an international airline and an international authority responsible for its regulation and supervision. United Kingdom: An ‘International Air Authority’ should be set up in order to regulate both technical and economic matters. United States: An ‘International Aviation Assembly’ should be created in order to set technical standards, but market powers should rule in other domains. Canada: An ‘International Air Authority’ should be established which is competent for economic and air services regulations, aided by a regional council. None of the four proposals was fully adopted, but parts of each can be found in the Articles of the Chicago Convention 1944 that establish ICAO.

ICAO is a United Nations specialised agency,5 having legal personality at an international and domestic level,6 established by the Chicago Convention in 1944 and headquartered in

3 ICAO, ‘Convention on International Civil Aviation – Doc 7300’, www.icao.int/publications/pages/ doc7300.aspx. 4 Ludwig Weber, ‘International Organizations’, in Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law (Kluwer Law International, 2011), at 76. See also, Conference Docs. 16, 48–50 in the Proceedings of the International Civil Aviation Conference (1944). 5 See, Charter of the United Nations, 24 October 1945, 1 UNTS XVI (1945), Art. 7(2): “Such subsidiary organs as may be found necessary may be established in accordance with the present Charter.” See also, Agreement between the United Nations and the International Civil Aviation Organization, ICAO Doc. 7970 (1947). 6 ICAO has an international legal personality pursuant to Article II of the 1947 Agreement between the UN and ICAO and a national legal personality pursuant to Article 47 of the Chicago Convention 1944. Convention on International Civil Aviation, 7 December 1944, 61 Stat. 1180; 15 UNTS 295, Art. 47: The Organization shall enjoy in the territory of each contracting State such legal capacity as may be necessary for the performance of its functions. Full juridical personality shall be granted wherever compatible with the constitution and laws of the State concerned.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION Montreal, Canada7 to manage the administration and governance of the Chicago Convention 1944.

Did You Know? The Chicago Convention 1944 was concluded prior to the adoption of the Charter of the United Nations, which was adopted during the United Nations Conference on International Organization, attended by 50 Allied nations, that took place on 25 April 1945 to 26 June 1945

ICAO is, therefore, an international organisation, without its own or conferred sovereignty powers.8 ICAO works with the Chicago Convention 1944’s State Parties and other aviation stakeholders in order to fulfil its aims and objectives set out in Article 44. The aims and objectives of the Organization are to develop the principles and techniques of international air navigation and to foster the planning and development of international air transport so as to: (a) Insure the safe and orderly growth of international civil aviation throughout the world; (b) Encourage the arts of aircraft design and operation for peaceful purposes; (c) Encourage the development of airways, airports, and air navigation facilities for international civil aviation; (d) Meet the needs of the peoples of the world for safe, regular, efficient and economical air transport; (e) Prevent economic waste caused by unreasonable competition; (f ) Insure that the rights of contracting States are fully respected and that every contracting State has a fair opportunity to operate international airlines; (g) Avoid discrimination between contracting States; (h) Promote safety of flight in international air navigation; (i) Promote generally the development of all aspects of international civil aeronautics.

7 Chicago Convention 1944, Art. 45. ICAO and Canada have a Headquarters Agreement covering, inter alia, inviolability of the headquarters, privileges and immunities of staff, and recognition of the legal personality of the Agency. The Council endorsed the Draft agreement during its tenth meeting of its 198th Session, which was signed by the two Parties on 27 May 2013. It came into force at the end of 2016 and has a duration of 20 years. See, Supplementary Agreement between ICAO and the Government of Canada Regarding the Headquarters of ICAO (2013). 8 Elmar Giemulla, ‘Chicago System: Genesis and Main Characteristics’, in Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law (Kluwer Law International, 2011), at 5.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION The wording of Article 44 is progressive, in that it allows ICAO to tackle new issues as and when they arise. For example, due to the increase levels of hijacking and sabotage in the 1960s and 1970s, ICAO has been proactive in the area of security.9 Pursuant of Article 44, ICAO “is the global forum of States for international civil aviation. ICAO develops policies, standards, undertakes compliance audits, performs studies and analyses, provides assistance and builds aviation capacity through the cooperation of Member States and stakeholders.”

Did You Know? The ICAO Business Plan 2020–202210 sets out Strategic Objectives for ICAO to guide the organisation’s activities and help States provide a safe, secure, efficient, economically viable and environmentally responsible air transport network. The five Strategic Objectives are:11 1

Safety: Enable “the strengthening of State safety oversight capabilities by providing States with a range of solutions focused on an activity to recognize competent Regional Safety Oversight Organizations (RSOOs); supporting the implementation of Safety Management; and implementing appropriate regulatory measures to support drones operations and preparing initial RPAS integration.”

2

Air Navigation Capacity and Efficiency: Develop “a Trust Framework; developing a programme that addresses the increased use of UAS including drones and RPAS; and developing a programme related to new entrants to the global air navigation system (commercial space transport and higher altitude operations).”

3

Security and Facilitation: Intensify “support for the Global Aviation Security Plan (GASeP) implementation; developing a framework to facilitate e-­ commerce activities; strengthening the ICAO Traveller Identification Programme (TRIP) Strategy; and developing a policy framework on cybersecurity.”

4

Economic Development of Air Transport: Finalise “a specific protocol to facilitate further liberalization of air cargo services and a convention on foreign investment in airlines; and implementing and managing aviation-­related big data solutions (for example, ADS-­B data used for cross-­cutting disciplines).”

 9 See, Chapter 6. 10 ICAO Business Plan 2020–2022, 1st edn (2016). 11 ICAO, Draft ICAO Business Plan For 2020–2021–2022 (26 November 2018), RAAC/16-IP/03. See also, ICAO, ‘Strategic Objectives’, www.icao.int/about-icao/Council/Pages/Strategic-Objectives. aspx.

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5

Environmental Protection: Implement “CORSIA; and developing ICAO Global Environmental Plan (GAEP) consistent with the United Nation’s sustainable development framework.”

In addition, there are more specific objectives, such as:

 Safety and Security: Strengthen “monitoring, auditing and oversight programme activities.”

 All Strategic Objectives: Intensify “technical assistance and technical cooperation

activities to implement ICAO’s No Country Left Behind (NCLB) initiative; and enhancing the Next Generation of Aviation Professionals (NGAP) programme.”

 Strategic Planning, Coordination and Partnerships: Promote “the inclusion of

aviation in national and regional development plans; and expanding partnerships to support the programme activities.”

 Legal and External Relations Services: Facilitate “the resolution of international aviation disputes.”

 Human Resources: Strengthen “human resource management to better align with strategic organizational requirements.”

 Investigation: Strengthen “the internal investigation function.” The role of ICAO, as set out in Article 44, shall be supplemented by the Preamble as it is an important interpretative tool to understanding the aims and objectives of the Chicago Convention 1944. Only States can be party to the Chicago Convention 1944. However, ICAO cooperates with international governmental organisations and bodies,12 such as: • World Meteorological Organization13 • International Telecommunications Union14 • Universal Postal Union • World Health Organization • World Tourism Organization • International Maritime Organization • Office of the United Nations High Commissioner for Human Rights

12 See, Chicago Convention 1944, Arts 64–65. 13 ICAO, ‘Working Arrangements Between the International Civil Aviation Organization and the World Meteorological Organization’, Doc. 7475. 14 See, Chapter 12.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION ICAO also cooperates with non-­governmental organisations, such as: • Airports Council International (ACI) • Civil Air Navigation Services Organisation • Eurocontrol • International Air Transport Association (IATA) • International Business Aviation Council • International Coordinating Council of Aerospace Industries Associations • International Council of Aircraft Owner and Pilot Associations • International Federation of Air Line Pilots’ Associations • International Federation of Air Traffic Controllers’ Associations • Standard setting organisations, such as European Organisation for Civil Aviation Equipment and Radio Technical Commission for Aeronautics Cooperation is extremely important for the development of international aviation and such organisations are very active in the work of ICAO. This can be demonstrated, for example, by the proximity of ACI and IATA from ICAO’s headquarters. Finally, ICAO works with regional organisations, such as the European Union (e.g. the European Commission Directorate-­General for Mobility and Transport and the European Aviation Safety Agency).

4.2  Bodies of the International Civil Aviation Organization Pursuant to Article 43 of the Chicago Convention 1944, the organisation shall be called the ‘International Civil Aviation Organization’, formed by the Chicago Convention 1944 and comprise: • Assembly • Council • Such other bodies as may be necessary: – Secretariat – Air Navigation Commission These will be discussed in more detail below.

4.2.1 Secretariat The ICAO secretariat is headed by a Secretary-­General, who serves as the chief executive officer and is responsible for the direction and work of the Secretariat.

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Did You Know? There have been 12 Secretaries-General:

 Fang Liu (China) 2015–present.  Raymond Benjamin (France) 2009–2015.  Taïeb Chérif (Algeria) 2003–2009.  Renato Cláudio Costa Pereira (Brazil) 1997–2003.  Philippe Rochat (Switzerland) 1991–1997.  Shivinder Singh Sidhu (India) 1988–1991.  Yves Lambert (France) 1976–1988.  Assad Kotaite (Lebanon) 1970–1976.  Bernardus Tieleman Twigt (The Netherlands) 1964–1970.  Ronald MacAlister Macdonnell (Canada) 1959–1964.  Carl Ljungberg (Sweden) 1952–1959.  Albert Roper (France) 1944–1951. The Secretary-­General is appointed by the Council.

The Secretariat of ICAO comprises five permanent administrative offices: 1 Air Navigation Bureau: It works with stakeholders, manages policies on air navigation safety and infrastructure, and creates and maintains the Global Air Navigation Plan15 and the Global Aviation Safety Plan.16 15 The Global Air Navigation Plan (GANP): The GANP is the strategy to achieve a global interoperable air navigation system, for all users during all phases of flight, that meets agreed levels of safety, provides for optimum economic operations, is environmentally sustainable and meets national security requirements. The GANP is being evolved to serve as a worldwide reference to transform the air navigation system in an evolutionary manner so that no State or Stakeholder is left behind. ICAO, Global Air Navigation Plan (GANP), www.icao.int/airnavigation/Pages/GANP-Resources. aspx. 16 The Global Aviation Safety Plan (GASP): To ensure continuous safety improvement, ICAO has developed a strategic approach that measures progress in the area of safety. The Global Aviation Safety Plan (GASP) specifically establishes targeted safety objectives and initiatives while ensuring the efficient and effective coordination of complementary safety activities between all stakeholders.

ICAO, ‘GASP’, www.icao.int/safety/SafetyManagement/Pages/GASP.aspx. ICAO, ‘Air Navigation Bureau’, www.icao.int/safety/airnavigation/Pages/default.aspx.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION 2 Air Transport Bureau: It supports the implementation of the Strategic Objectives on Security and Facilitation; Economic Development of Air Transport; and Environmental Protection. It also contributes towards Safety.17 3 Legal Affairs and External Relations Bureau: It provides legal advice and assistance to the Secretary-­General, to other bodies of ICAO and to States on constitutional, administrative and procedural matters, as well as on international law, air law, commercial law, labour law and related matters.18 4 Bureau of Administration and Services: It provides administrative support and management through human resources, information management, and linguistic services (e.g. the six working languages of ICAO).19 5 Technical Cooperation Bureau: It works with States to support their civil aviation development projects. For example, it may facilitate the implementation of ICAO Annexes, assist civil aviation authorities, and provide training and infrastructure.20 The five Bureau Directors report directly to the Secretary-­General.21 Further, senior officers in charge of Finance, Evaluation and Internal Audit, Communications, and ICAO’s seven Regional Offices must also report to the Secretary-­General. ICAO has seven regional offices: 1 Asia and Pacific Office, Bangkok, Thailand. 2 Eastern and Southern African Office, Nairobi, Kenya. 3 Western and Central African Office, Dakar, Senegal. 4 Middle East Office, Cairo, Egypt. 5 European and North Atlantic Office, Paris, France. 6 South American Office, Lima, Peru. 7 North American, Central American and Caribbean Office, Mexico City, Mexico. The Regional Offices are responsible for the State Parties to which they are accredited, as well as liaising with non-­contracting States and territories. The main focus of the regional offices is the implementation of Standards and Recommended Practices (SARPs) and regional plans, as well as, providing assistance to States.22 The Secretary-­General is also the secretary of the ICAO Council and Assembly. 17 ICAO, ‘Air Transport Bureau’, www.icao.int/secretariat/air-transport/Pages/default.aspx. 18 ICAO, ‘Legal Affairs and External Relations Bureau’, www.icao.int/secretariat/legal/Pages/default.aspx. 19 ICAO, ‘Bureau of Administration and Services’, www.icao.int/secretariat/Administration/Pages/ default.aspx. 20 ICAO, ‘Technical Cooperation Bureau’, www.icao.int/secretariat/TechnicalCooperation/Pages/ default.aspx. 21 See, for the rules on personnel, Chicago Convention 1944, Arts 58–60. 22 ICAO, ‘ICAO’s Regional Presence’, www.icao.int/secretariat/RegionalOffice/Pages/default.aspx.

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4.2.2 Council The Council is regulated pursuant to: • Article 50 Composition and Election of Council. • Article 51 President of Council. • Article 52 Voting in Council. • Article 53 Participation Without a Vote. • Article 54 Mandatory Functions of Council. • Article 55 Permissive Functions of Council.23 The Council is the governing body of ICAO and is led by the President of the Council.

Did You Know? The Council has had five Presidents. The President of the Council is elected on a three-­year term24:

 Olumuyiwa Benard Aliu (Nigeria) 2014–present.  Roberto Kobeh González (Mexico) 2006–2013.  Assad Kotaite (Lebanon) 1976–2006.  Walter Binaghi (Argentina) 1957–1976.  Edward Warner (United States) 1947–1957. The President may be re-­elected on a continuous basis.

The Council comprises thirty-­six States which are elected every three years by the Assembly.25 The 2016–2019 Council is made up of representatives from these States: • Part 1 – States of Chief Importance in Air Transport: Australia, Brazil, Canada, China, France, Germany, Italy, Japan, Russian Federation, United Kingdom and the United States. • Part 2 – States that Make the Greatest Contribution to the Provision of Facilities for International Civil Air Navigation: Argentina, Colombia, Egypt, India, Ireland, Mexico, Nigeria, Saudi Arabia, Singapore, South Africa, Spain and Sweden. 23 See, Chicago Convention 1944, Art. 67. 24 Chicago Convention 1944, Art. 51. 25 Chicago Convention 1944, Art. 50(a).

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INTERNATIONAL CIVIL AVIATION ORGANIZATION • Part 3 – States Ensuring Geographic Representation: Algeria, Cabo Verde, Congo, Cuba, Ecuador, Kenya, Malaysia, Panama, Republic of Korea, Turkey, United Arab Emirates, United Republic of Tanzania and Uruguay. The three-­tiered system is a product of Article 50(b) of the Chicago Convention 1944 in order to provide adequate representation based on different criteria, while also keeping the Council to a workable size. However, larger, more influential States at ICAO often see re-­ election.

Did You Know? The Council has a vision and mission: Vision: “Achieve the sustainable growth of the global civil aviation system.” Mission: “To serve as the global forum of States for international civil aviation. ICAO develops policies and Standards, undertakes compliance audits, performs studies and analyses, provides assistance and builds aviation capacity through many other activities and the cooperation of its Member States and stakeholders.”26

The Council has legislative, administrative and judicial functions: (a) Submit annual reports to the Assembly; (b) Carry out the directions of the Assembly and discharge the duties and obligations which are laid on it by this Convention; (c) Determine its organization and rules of procedure; (d) Appoint and define the duties of an Air Transport Committee, which shall be chosen from among the representatives of the members of the Council, and which shall be responsible to it; (e) Establish an Air Navigation Commission, in accordance with the provisions of Chapter X; (f ) Administer the finances of the Organization in accordance with the provisions of Chapters XII and XV; (g) Determine the emoluments of the President of the Council; (h) Appoint a chief executive officer who shall be called the Secretary General, and make provision for the appointment of such other personnel as may be necessary, in accordance with the provisions of Chapter XI;

26 ICAO, ‘Vision and Mission’, www.icao.int/about-icao/Council/Pages/vision-and-mission.aspx.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION (i) Request, collect, examine and publish information relating to the advancement of air navigation and the operation of international air services, including information about the costs of operation and particulars of subsidies paid to airlines from public funds; (j) Report to contracting States any infraction of this Convention, as well as any failure to carry out recommendations or determinations of the Council; (k) Report to the Assembly any infraction of this Convention where a contracting State has failed to take appropriate action within a reasonable time after notice of the infraction; (l) Adopt, in accordance with the provisions of Chapter VI of this Convention, international standards and recommended practices; for convenience, designate them as Annexes to this Convention; and notify all contracting States of the action taken; (m) Consider recommendations of the Air Navigation Commission for amendment of the Annexes and take action in accordance with the provisions of Chapter XX; (n) Consider any matter relating to the Convention which any contracting State refers to it.27 Any decisions taken by the Council must be approved by a majority of its members.28 Pursuant to Article 53 of the Chicago Convention 1944 “[a]ny State may participate, without a vote, in the consideration by the Council and by its committees and commissions of any question which especially affects its interests.” Further, the Council may seek assistance from different ICAO entities. For example, it is assisted by the Air Navigation Commission for technical matters, the Air Transport Committee for economic matters, the Committee on Joint Support of Air Navigation Services, the Finance Committee and the Committee on Aviation Environmental Protection. As a result, the Council is not a closed club where only the voices of a few are heard.

4.2.3 Assembly The Assembly is ICAO’s sovereign body and comprises all 193 of ICAO’s Member States and is regulated pursuant to: • Article 46 First Meeting of Assembly. • Article 48 Meetings of the Assembly and Voting. • Article 49 Powers and Duties of the Assembly.29

27 Chicago Convention 1944, Art. 54. See also, ICAO, ‘The ICAO Council’, www.icao.int/about-icao/ Council/Pages/council.aspx. 28 Chicago Convention 1944, Art. 52. 29 See, ICAO, Standing Rules of Procedure of the Assembly of the International Civil Aviation Organization Doc 7600/6.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION Each State has one vote. Pursuant to Article 48(a) of the Chicago Convention 1944, the Assembly shall meet at least every three years and is convened by the Council at a suitable time and place. It has met a total of thirty-­nine times.30

Did You Know? The last time the Assembly met was during the 39th Session in Montreal on 27 September and 6 October 2016.31 This session, while discussing many topics, such as security, had a strong focus on environment.32

The Assembly has numerous powers and duties, such as: (a) Elect at each meeting its President and other officers; (b) Elect the contracting States to be represented on the Council, in accordance with the provisions of Chapter IX; (c) Examine and take appropriate action on the reports of the Council and decide on any matter referred to it by the Council; (d) Determine its own rules of procedure and establish such subsidiary commissions as it may consider to be necessary or desirable; (e) Vote annual budgets and determine the financial arrangements of the Organization, in accordance with the provisions of Chapter XII;33 (f ) Review expenditures and approve the accounts of the Organization; (g) Refer, at its discretion, to the Council, to subsidiary commissions, or to any other body any matter within its sphere of action; (h) Delegate to the Council the powers and authority necessary or desirable for the discharge of the duties of the Organization and revoke or modify the delegations of authority at any time; (i) Carry out the appropriate provisions of Chapter XIII; (j) Consider proposals for the modification or amendment of the provisions of this Convention and, if it approves of the proposals, recommend them to the contracting States in accordance with the provisions of Chapter XXI; (k) Deal with any matter within the sphere of action of the Organization not specifically assigned to the Council.34

30 ICAO, ‘All Assembly Sessions’, www.icao.int/publications/Pages/assembly-archive.aspx. 31 ICAO, ‘39th Triannual Assembly’, www.icao.int/meetings/a39/Pages/default.aspx. 32 ICAO, Assembly Resolutions in Force (as of 6 October 2016), Doc 10075. 33 See, Chicago Convention 1944, Arts 61–63. 34 Chicago Convention 1944, Art. 49.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION Each State has one vote at the Assembly and each vote is equal35 and a majority of the votes cast is the minimum number of votes required for adoption by the Assembly.36 The Assembly is able to refer to the Council, subsidiary commissions or any other body any matter within its sphere of action. International organisations, such as ACI and IATA are invited to the Assembly and play a significant role. An extraordinary meeting of the Assembly may be held at any time upon the call of the Council or at the request of not less than one-­fifth of the total number of contracting States addressed to the Secretary-­General.

Did You Know? There have been a total of nine extraordinary meetings:

 34th Session (Extraordinary), Montreal, 31 March–1 April 2003.  30th Session (Extraordinary), Montreal, 25–26 May 1993.  28th Session (Extraordinary), Montreal, 22–26 October 1990.  25th Session (Extraordinary), Montreal, 24 April–10 May 1984.  20th Session (Extraordinary), Rome, 28 August–21 September 1973.  19th Session (Extraordinary), New York, 27 February–2 March 1973.  17th-A Session (Extraordinary), New York, 11–12 March 1971.  17th Session (Extraordinary), Montreal, 16–30 June 1970.  13th Session (Extraordinary), Montreal, 19–21 June 1961.37 These are carried out in response to issues of high importance. For example, the 1970 extraordinary session was convened as a response to the increasing rate of hijacking incidents that took place in the late 1960s.38 While an extraordinary meeting can be held at any time, it must result from the call of the Council or at the request of no less than one-­fifth of the total number of Member States.

4.2.4 Air Navigation Commission39 The Air Navigation Commission is regulated pursuant to Chapter X, Articles 56–57 of the Chicago Convention 1944.

35 Chicago Convention 1944, Art. 48(b). 36 Chicago Convention 1944, Art. 48(c). 37 ICAO, ‘All Assembly Sessions’, www.icao.int/publications/Pages/assembly-archive.aspx. 38 See, Chapter 6. 39 ICAO, ‘Air Navigation Commission’, www.icao.int/about-icao/AirNavigationCommission/Pages/ default.aspx.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION • Article 56 Nomination and Appointment of Commission • Article 57 Duties of Commission The Air Navigation Commission has four administrative positions, of which the first three change every year: • President • First Vice-­President • Second Vice-­President • Secretary40 The President is appointed by the Council for a one-­year term. The Commission appoints the First and Second Vice-­Presidents for a one-­year term. It is made up of nineteen Commissioners, who meet the criteria set out in Article 56 of the Chicago Convention 1944; they must have “suitable qualifications and experience in the science and practice of aeronautics”. The Commissioners are appointed by the Council for a three-­year period. The last appointment was on 16 October 2018.

Did You Know? The current Commissioners were appointed by Argentina, Australia, Brazil, Canada, China, eight European States (Denmark, Estonia, Finland, Iceland, Latvia, Norway, Sweden and Switzerland), France, Germany, Greece, Japan, Niger, Republic of Korea, Russian Federation, Saudi Arabia, Singapore, two European States (Spain and Belgium), Uganda, United Kingdom and United States. Although the Commissioners are nominated by specific States, they do not represent that State’s interests nor the interests of any particular region, organisation or company. They must act independently using their expertise in the interest of the entire international civil aviation community.

In addition to the Commissioners, persons from States and industry stakeholders may also participate in the ANC as observers. The ANC is tasked by the Council to manage the technical work programme of ICAO. This includes its role to consider and recommend Standards and Recommended Practices (SARPs), as well as Procedures for Air Navigation Services (PANS) for adoption or approval by the ICAO Council. Its main challenges: (a) Consider, and recommend to the Council for adoption, modifications of the Annexes to this Convention;

40 The Secretary is ex officio the Director of the Air Navigation Bureau.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION (b) Establish technical subcommissions on which any contracting State may be represented, if it so desires; (c) Advise the Council concerning the collection and communication to the contracting States of all information which it considers necessary and useful for the advancement of air navigation.41 Following approval of the Council, it usually meets three times a year to address matters within its work programme. Each session typically lasts nine weeks including a three-­week recess.

4.3 Annexes to the Chicago Convention 1944 4.3.1  Standards and Recommended Practices Standards and Recommended Practices, also known as SARPs, cover the minimal technical and operational aspects of international civil aviation. These are found in the nineteen detailed technical Annexes to the Chicago Convention 1944 that were developed and are regularly amended by ICAO pursuant to Article 37 of the Chicago Convention 1944.42 Each contracting State undertakes to collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation. In order to achieve this, ICAO shall, as it deems necessary, adopt and amend the Annexes within the following areas: (a) Communications systems and air navigation aids, including ground marking; (b) Characteristics of airports and landing areas; (c) Rules of the air and air traffic control practices; (d) Licensing of operating and mechanical personnel; (e) Airworthiness of aircraft; (f ) Registration and identification of aircraft; (g) Collection and exchange of meteorological information; (h) Log books; (i) Aeronautical maps and charts; 41 Chicago Convention 1944, Art. 57. 42 Article 33 of the Chicago Convention 1944 supplements the goal of uniformity found in Article 37 within the scope of the recognition of certificates of airworthiness and personnel licenses.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION (j) Customs and immigration procedures; (k) Aircraft in distress and investigation of accidents;

and such other matters concerned with the safety, regularity, and efficiency of air navigation as may from time to time appear appropriate.43

Often left out of this discussion is Article 12 on ‘Rules of the Air’, which declares that: […] [e]ach contracting State undertakes to keep its own regulations in these respects uniform, to the greatest possible extent, with those established from time to time under this Convention. Over the high seas, the rules in force shall be those established under this Convention. Each contracting State undertakes to insure the prosecution of all persons violating the regulations applicable. This should be read together with Annex 2 of the same title. This is to ensure that areas outside of States’ sovereignty are also regulated uniformly – that is, in compliance with the Annexes. This is often quoted as a unique power of the Council in international law as it establishes rules for a large part of the world. The nineteen Annexes are made up of ‘Standards’ and ‘Recommended Practices’, which are commonly referred together as ‘SARPs’. There are currently over 12,000 SARPs found in the nineteen Annexes that are managed by ICAO.44

Did You Know? Annexes 2 and 7 contain only Standards. Whereas, the 15 other Annexes contain a collection of Standards and Recommended Practices.

ICAO has defined by the term ‘Standard’ within the definitions sections of its Annexes. A Standard is defined as any specification for physical characteristics, configuration, material, performance, personnel or procedure, the uniform application of which is recognized as necessary for the safety or regularity of international air navigation and to which Contracting States will conform in accordance with the Convention; in the event of impossibility of compliance, notification to the Council is compulsory under Article 38 of the Convention.45 A Standard is requirement that States shall follow unless it files a notification of non-­ compliance pursuant to Article 38.

43 Chicago Convention 1944, Art. 37. 44 ICAO, ‘How ICAO Develops Standards’, www.icao.int/about-icao/AirNavigationCommission/ Pages/how-icao-develops-standards.aspx. 45 ICAO, ‘Making an ICAO Standard’, www.icao.int/safety/airnavigation/Pages/standard.aspx.

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Did You Know? There is an inconsistency in the definitions of ‘Standard’ and ‘Recommended Practice’ between that of Annex 9 and the other Annexes.

A Recommended Practice is any specification for physical characteristics, configuration, material, performance, personnel or procedure, the uniform application of which is recognized as desirable in the interest of safety, regularity or efficiency of international air navigation and to which Contracting States will endeavour to conform in accordance with the Convention.46 A Recommendation is, therefore, a desirable requirement that States should try to comply with. The Annexes also contain other materials: • Appendices: These comprise “material grouped separately for convenience but forming part of the Standards and Recommended Practices adopted by the Council.” • Definitions: These are “of terms used in the Standards and Recommended Practices which are not self-­explanatory in that they do not have accepted dictionary meanings. A definition does not have independent status but is an essential part of each Standard and Recommended Practice in which the term is used, since a change in the meaning of the term would affect the specification.” • Tables and Figures: These “add to or illustrate a Standard or Recommended Practice and which are referred to therein, form part of the associated Standard or Recommended Practice and have the same status.”47 • Materials: These comprise Forewords, Introductions, Notes and Attachments. ICAO may also develop other documents: • Procedures for Air Navigation Services (PANS): These “comprise operating practices and material too detailed for Standards or Recommended Practices – they often amplify the basic principles in the corresponding Standards and Recommended Practices.” These are approved by the Council. • Regional Supplementary Procedures (SUPP): These “have application in the respective ICAO regions. Although the material in Regional Supplementary Procedures is similar to that in the Procedures for Air Navigation Services, SUPPs do not have the worldwide applicability of PANS.” These are approved by the Council.

46 Ibid. 47 Annex 1 to the Chicago Convention 1944, Personnel Licensing, 11th edn (July 2011), at viii.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION • Guidance Material: This “is produced to supplement the SARPs and PANS and to facilitate their implementation. Guidance material is issued as Attachments to Annexes or in separate documents such [as] manuals, circulars and lists of designators/addresses. Usually it is approved at the same time as the related SARPS are adopted.” This is approved by the Secretary-­General and published under his/her authority. • Manuals: These “provide information to supplement and/or amplify the Standards and Recommended Practices and Procedures for Air Navigation Services. They are specifically designed to facilitate implementation and are amended periodically to ensure their contents reflect current practices and procedures.” • Circulars: These “make available specialized information of interest to Contracting States. Unlike manuals, circulars are not normally updated.”48 ICAO may also publish other documents outside of the SARP system. For example: • ICAO Journal: The Journal gives an overview of ICAO’s activities and features additional information that may be of interest to States and other stakeholders.49 • Annual Reports of the Council: These provide an insight into the programmes, activities and achievements of ICAO.50 • Assembly Documentation: This includes the Working Papers submitted by stakeholders during the Assembly and the Resolutions adopted by the Assembly.51 • Doc Series: These are documents produced by ICAO on different topics. For example, Doc 7300 contains the text of the Chicago Convention 1944, while Doc 8632 covers ICAO’s Policies on Taxation in the Field of International Air Transport. Also, PANS and Manuals are in the Doc Series, so there is an overlap. • Free Publications: This includes TRIP Magazine, Training Report, Technical Cooperation Review and Products and Services Catalogue.52 While these documents are not legally binding, they are useful tools in understanding the law, ICAO’s policies, how ICAO works and the position of stakeholders.

48 ICAO, ‘Making an ICAO Standard’, www.icao.int/safety/airnavigation/Pages/standard.aspx. 49 ICAO, ‘ICAO Journal’, www.icao.int/publications/Pages/ICAO-Journal.aspx?year=2018&lang=en. 50 ICAO, ‘Annual Reports of the Council’, www.icao.int/publications/Pages/annual-reports.aspx. 51 ICAO, ‘About the Assembly’, www.icao.int/Meetings/a39/Pages/default.aspx. 52 See, ICAO, Free Publications, www.icao.int/publications/Pages/default.aspx.

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4.3.2 Overview of the Nineteen Annexes to the Chicago Convention 1944 Pursuant to Article 37, ICAO shall adopt and amend Annexes from time to time. Since the publication of the first Annex in 1948 (Annex 1), of which the first twelve Annexes were a part of the final act of the Chicago Conference in 1944, ICAO has been active in regularly amending the Annexes.53 Table 4.1  List of Annexes to the Chicago Convention 1944 No.

Title

Publication Information

Annex 1

Personnel Licensing (1948)

12th edn (July 2018)

Annex 2

Rules of the Air (1948)

10th edn (July 2005)

Annex 3

Meteorological Service for International Air Navigation (1948)

20th edn (July 2018)

Annex 4

Aeronautical Charts (1948)

11th edn (July 2009)

Annex 5

Units of Measurement to Be Used in Air and Ground Operations (1948)

5th edn (July 2010)

Annex 6

Operation of Aircraft (1948) Part I – International Commercial Air Transport – Aeroplanes Part II – International General Aviation – Aeroplanes Part III – International Operations – Helicopters

11th edn (July 2018) 10th edn (July 2018) 9th edn (July 2018)

Annex 7

Aircraft Nationality and Registration Marks (1949)

6th edn (July 2012)

Annex 8

Airworthiness of Aircraft (1949)

12th edn (July 2018)

Annex 9

Facilitation (1949)

15th edn (October 2017)

Annex 10

Aeronautical Telecommunications (1949) Vol. I – Radio Navigation Aids Vol. II – Communication Procedures Including Those with PANS Status Vol. III – Communication Systems Vol. IV – Surveillance and Collision Avoidance Systems Vol. V – Aeronautical Radio Frequency Spectrum Utilization

7th edn (July 2018) 7th edn (July 2016) 2nd edn (July 2007) 5th edn (July 2014) 3rd edn (July 2013)

Annex 11

Air Traffic Services (1950)

15th edn (July 2018)

Annex 12

Search and Rescue (1950)

14th edn (July 2016)

Annex 13

Aircraft Accident and Incident Investigation (1951)

11th edn (July 2016)

Annex 14

Aerodromes (1951) Vol. I – Aerodrome Design and Operations Vol. II – Heliports

8th edn (July 2018) 4th edn (July 2013)

Annex 15

Aeronautical Information Services (1953)

16th edn (July 2019)

53 See, for a more detailed description, ICAO, ‘The Convention on International Civil Aviation Annexes 1 to 18’, www.icao.int/safety/airnavigation/nationalitymarks/annexes_booklet_en.pdf. The document has not been updated to include a description of Annex 19.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION Table 4.1  (Continued) No.

Title

Publication Information

Annex 16

Environmental Protection (1971) Vol. I – Aircraft Noise Vol. II – Aircraft Engine Emissions Vol. III – Aeroplane CO2 Emissions Vol. IV – Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)

8th edn (July 2017) 4th edn (July 2017) 1st edn (July 2017) 1st edn (October 2018)

Annex 17

Security: Safeguarding International Civil Aviation Against Acts of Unlawful Interference (1974)

10th edn (April 2017)

Annex 18

The Safe Transport of Dangerous Goods by Air (1984)

4th edn (July 2011)

Annex 19

Safety Management (2013)

2nd edn (July 2016)

Annex 9: Facilitation, Annex 16: Environmental Protection and Annex 17: Security are the responsibility of the Air Transport Bureau.

Did You Know? The Federal Office of Civil Aviation FOCA has provided free access to all of the Annexes. The link: FOCA, ‘Anhänge zur Konvention der Int. Zivilluftfahrtorganisation (ICAO)’, www.bazl.admin.ch/bazl/de/home/fachleute/regulation-­und-grundlagen/ rechtliche-­grundlagen-und-­richtlinien/anhaenge-­zur-konvention-­der-internationalen-­ zivilluftfahrtorgani.html.

The remaining sixteen Annexes are responsibility of ICAO’s Air Navigation Bureau.

4.3.3 Adoption of Standards and Recommended Practices Article 90 Adoption and amendment of Annexes: (a) The adoption by the Council of the Annexes described in Article 54,54 subparagraph (l), shall require the vote of two-­thirds of the Council at a meeting called for that purpose and shall then be submitted by the Council to each contracting State. Any such Annex or any amendment of an Annex shall become effective within three months after its submission to the contracting States or at the end of such longer period of time as the Council may prescribe, unless in the meantime a majority of the contracting States register their disapproval with the Council. 54 Chicago Convention 1944, Art. 54 (l): Adopt, in accordance with the provisions of Chapter VI of this Convention, international standards and recommended practices; for convenience, designate them as Annexes to this Convention; and notify all contracting States of the action taken.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION (b) The Council shall immediately notify all contracting States of the coming into force of any Annex or amendment thereto. It is the responsibility of the Council to adopt the Annexes, which shall be done by a two-­ thirds vote.55 The legal status of SARPs is questionable.56 However, as stated in Article 90, the Annexes become automatically effective within three months after submission to the States, unless otherwise stated by the Council, and because of this, States have to take measures to conform to the SARPs. In theory, States may reject the amendment, although it has never happened in practice. This may happen in three ways: • The creation of national law to implement the content of the Annexes. • Reference to SARPs directly in national law. • Reference to SARPs in air service agreements.57 ICAO has formalised this in word: Use of the Annex text in national regulations. The Council, on 13 April 1948, adopted a resolution inviting the attention of Contracting States to the desirability of using in their own national regulations, as far as practicable, the precise language of those ICAO Standards that are of a regulatory character and also of indicating departures from the Standards, including any additional national regulations that were important for the safety or regularity of air navigation. Wherever possible, the provisions of this Annex have been written in such a way as to facilitate incorporation, without major textual changes, into national legislation.58 As a result, the SARPs may gain binding legal force through a source of law.

4.3.4  Departures from International Standards and Procedures The Annexes are not part of the Chicago Convention 1944 so do not have the status of a treaty under the VCLT. However, their legal status is a point of debate. The definition of ‘Standard’ suggests they are binding as “Contracting States will conform in accordance with the Convention” and the only mechanism provided in the Chicago Convention 1944 that allows States to deviate from a Standard is via Article 38. Nevertheless, the phrase “the highest practicable degree of uniformity” found in Article 37 weakens this argument, so the 55 See, for a visual overview on the Standard making process, ICAO, ‘Timeline’, www.icao.int/safety/ airnavigation/PublishingImages/timeline.jpg. 56 Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017), at 296, n. 13. 57 Lalin Kovudhikulrungsri, The Right to Travel by Air of Persons with Disabilities (Mijers Instituut, 2017), at 37. 58 Annex 1 to the Chicago Convention 1944.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION obligation appears to be “to collaborate in securing the highest practicable” and not “to comply with” the Annexes.59 The obligation to notify non-­compliance is however clear. If a State finds it impracticable to comply with a Standard, then pursuant to Article 38, it shall file a notice of non-­compliance to ICAO. Any State which finds it impracticable to comply in all respects with any such international standard or procedure, or to bring its own regulations or practices into full accord with any international standard or procedure after amendment of the latter, or which deems it necessary to adopt regulations or practices differing in any particular respect from those established by an international standard, shall give immediate notification to the International Civil Aviation Organization of the differences between its own practice and that established by the international standard. In the case of amendments to international standards, any State which does not make the appropriate amendments to its own regulations or practices shall give notice to the Council within sixty days of the adoption of the amendment to the international standard, or indicate the action which it proposes to take. In any such case, the Council shall make immediate notification to all other states of the difference which exists between one or more features of an international standard and the corresponding national practice of that State. If the State cannot meet the Standard, then it shall immediately tell ICAO of any differences between its own practice and the standard. If ICAO makes amendments to Standards, a State which does not adopt such amendment into its national system must notify the Council within sixty days of the amendments adoption under Article 90 or tell the Council which action it plans to take. If such is done by a State, the Council must notify all of the other States. As a result, it should not be assumed that all of the Standards are followed by all of the States. ICAO monitors State compliance with SARPs through audits. Currently, there are two audit programmes: • Universal Safety Oversight Audit Programme (USOAP): “USOAP audits focus on a State’s capability in providing safety oversight by assessing whether the State has effectively and consistently implemented the critical elements of a safety oversight system, which enable the State to ensure the implementation of ICAO’s safety-­related Standards and Recommended Practices (SARPs) and associated procedures and guidance mater.”60 • Universal Security Audit Programme (USAP): “The objective of the USAP-­CMA is to promote global aviation security through continuous auditing and monitoring of Member States’ aviation security performance, in order to enhance their aviation security compliance and oversight capabilities”.61 59 Michael Milde, International Air Law and ICAO, 3rd edn (Eleven Publishing, 2016), at 173–174. 60 ICAO, ‘Welcome to the USOAP Continuous Monitoring Approach (CMA) Website’, www.icao. int/safety/cmaforum/Pages/default.aspx. 61 ICAO, ‘The Universal Security Audit Programme Continuous Monitoring Approach (USAPCMA) and its Objective’, www.icao.int/security/usap/pages/default.aspx.

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4.4 Regional Cooperation under the Chicago Convention 194462 The Chicago Convention 1944 only marginally touches upon regional cooperation. First, Article 55(a) declares that the Council may: Where appropriate and as experience may show to be desirable, create subordinate air transport commissions on a regional or other basis and define groups of states or airlines with or through which it may deal to facilitate the carrying out of the aims of this Convention. Despite this, this provision has never been used. Further, a legal basis for regional cooperation may be implicitly found in Article 37 as it provides that States can collaborate to ensure high standards of aviation safety through uniformity, whether this be bilaterally, through regional cooperation, fragmented global cooperation or worldwide cooperation. Each contracting State undertakes to collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation. There is a growing tendency among States to mandate regional organisations with safety related tasks. These pertain to operation, regulation, enforcement and supervision.

Definition Regional Safety/Security Organisations: There is currently no definition found in international law. ICAO often refers to RSO to cover: a number of legal forms and institutional structures that range from highly formalized international intergovernmental organizations, […] such as the European Aviation Safety Agency (EASA) and the Pacific Aviation Safety Office (PASO), to less institutionalized projects established under the ICAO Cooperative Development of Operational Safety and Continuing Airworthiness Programme (COSCAP).63

The participating States are open to “determine the legal form and institutional structure that best fits the needs and characteristics of their specific region.”

62 See, for a detailed overview of Regional Safety and Security Organisations, Benjamyn I. Scott, ‘Regional Safety Organisations’, in Mendes de Leon, Introduction to Air Law (2017). 63 ICAO Safety Oversight Manual; Doc 9734-AN/959, Part B, Foreword. See, Mikolaj Ratajczyk, Regional Aviation Safety Organisations: Enhancing Air Transport Safety through Regional Cooperation (Kluwer Law International, 2015).

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INTERNATIONAL CIVIL AVIATION ORGANIZATION ICAO has set up the COSCAP, which are cooperative regional projects. Their objective is the improvement of safety, such as aircraft accident prevention and enhancement of the Member States’ safety oversight capabilities.64 Currently, there are five in existence: • COSCAP-­GS65 • COSCAP-­NA66 • COSCAP-­SA67 • COSCAP-­SEA68 • COSCAP-­UEMOA69 There are several aviation organisations across the world, set up outside of Article 55(a), that aim to promote aviation safety and aviation security; their tasks pertain to, inter alia, operation, regulation, enforcement and supervision. These include: • African Civil Aviation Commission • Arab Civil Aviation Commission • Banjul Accord Group Aviation Safety Oversight Organisation • Caribbean Aviation Safety and Security Oversight System • Central American Agency for Aeronautical Safety • Civil Aviation Authorities of Africa and Madagascar • Civil Aviation Council of Arab States • Corporación Centroamericana de Servicios de Navegación Aérea • East African Community Civil Aviation Safety and Security Oversight Agency • European Aviation Safety Agency70 • European Civil Aviation Conference (ECAC) • Interim Southern African Development Community Aviation Safety Organisation

64 Ibid., at 75–81. 65 Gulf States – Harmonization of international and national safety oversight provisions, regulations and procedures. Member States: Bahrain and Kuwait. 66 North Asia. Member States: China, Democratic People’s Republic of Korea, Mongolia and Republic of Korea. 67 South Asia. Member States: Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. 68 South East Asia. Member States: Brunei Darussalam, Cambodia, China, Hong Kong, Indonesia, Laos, Macao, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam and Timor-Leste. 69 Africa. Member States: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Mauritania, Niger, Senegal and Togo. 70 See, for a more detailed analysis, each organisations’ respective website.

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INTERNATIONAL CIVIL AVIATION ORGANIZATION • Latin American Civil Aviation Commission • Pacific Aviation Safety Office • South Asian Regional Initiative Each organisation must be assessed on its own as there are differences between all of them. For example, ECAC is not a part of ICAO, however, it is also not independent from it either. ECAC’s headquarters are based at ICAO Regional Offices; their staff are administered under the ICAO system; and they cooperate with the ICAO work programmer.71 In contrast, the European Union Aviation Safety Agency (EASA) is a specialised agency of the European Union with its own legal personality and mandate.

Recommended Literature 19 Annexes to the Chicago Convention 1944. Jiefang Huang, Aviation Safety Through the Rule of Law: ICAO’s Mechanisms and Practices (Kluwer Law International, 2009). ICAO (International Civil Aviation Organization) website at www.icao.int. Frank Manuhutu, ‘Article 83 bis (Revisited): Transfer of Safety Oversight Responsibilities Seen from a European Regulator’s Perspectives’, in Pablo Mendes de Leon, From Lowlands to High Skies: A Multilevel Jurisdictional Approach Towards Air Law, Essays in Honour of John Balfour (Martinus Nijhoff Publishers, 2013). Michael Milde, International Air Law and ICAO, 3rd edn (Eleven, 2016). Mikolaj Ratajczyk, Regional Aviation Safety Organisations: Enhancing Air Transport Safety through Regional Cooperation (Kluwer Law International, 2015). Benjamyn Scott, ‘Regional Safety Organisations’, in Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017). Philip Donges Snodgrass, ‘Aviation Flags of Convenience: Ireland and the Case of Norwegian Airlines International’, 14 Issues in Aviation Law and Policy 2 (2015), 245–276. Ludwig Weber, International Civil Aviation Organization: An Introduction, 3rd edn (Kluwer Law International, 2017).

71 Weber, ‘International Organizations’ (2011), at 81.

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Points for Further Research • What are the legal status of Standards and Recommended Practices? • Does ICAO make international law? • How does the structure of ICAO differ from other International Organisations? • Is a notification of non-­compliance suitable for aviation safety and security? • What subject matter should Annex 20 cover?

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Chapter 5

International Air Transport

LEARNING OBJECTIVES  Understand the relevance of the principle of State sovereignty in air transport.  Identify and be able to provide examples of each of the freedoms of the air.  Become familiar with the mechanisms provided by the Chicago  Convention 1944 for the opening up of national airspace.  Identify the main elements and types of Air Services Agreements (ASAs).  Become familiar with the forms of airline cooperation and the phenomenon of international airline alliances.

5.1 Introduction 5.1.1 Sovereignty: Article 1 Chicago Convention 1944 and a Closed Airspace The principle of complete and exclusive State sovereignty, enshrined in Article 1 of the Chicago Convention 1944, bears a number of remarkable consequences. A literal interpretation of Article 1, indeed, would seem to suggest that aircraft of a State can only fly within

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INTERNATIONAL AIR TRANSPORT that State’s territory, being de jure banned from carrying out air operations entering or trespassing other States’ airspace.1 The Chicago Convention 1944 is not primarily concerned with the economic regulation of air transport; rather, its raison d’être pertains to the promotion of safety of aerial navigation.2 The Convention is still rife with a strong State protectionism, which permeates the entire sphere of (aero-)political relations, through which States open their airspace to foreign aircraft.3 In such context, the Chicago Convention 1944 itself provides for specific legal mechanisms that facilitate the provision of international air navigation. Notably, the provisions contained in Articles 5–8, which are contained in Chapter II of the Chicago Convention 1944 titled ‘Flight Over Territory of Contracting States’, set out the basic regime under which States may open up their airspace to foreign aircraft. The provision under Article 9, instead, foresees the possibility for a State to reaffirm its sovereignty by closing, under certain circumstances, its airspace to foreign air traffic.

5.1.2 Non-­Scheduled International Air Services 5.1.2.1  Article 5 Chicago Convention 1944 The provision of non-­scheduled air services is governed by Article 5 of the Chicago Convention 1944, whereby such aircraft […] shall have the right, subject to the observance of the terms of this Convention, to make flights into or in transit non-­stop across its territory and to make stops for non-­ traffic purposes without the necessity of obtaining prior permission, and subject to the right of the State flown over to require landing. Therefore, prior permission is not required from the subjacent State A before an aircraft of another contracting State B performing a non-­scheduled flight over State A’s territory or stop there for technical reasons (transit rights). The rights granted by Article 5 for these types of flights are also extended to allow the “taking on or discharging passengers, cargo, or mail” (traffic rights). Despite the seemingly liberal approach taken, limitations are imposed in Article 5. For example, within the scope of traffic rights:

1 See, Petrus P.C. Haanappel, ‘Airline Ownership and Control and Some Related Matters’, 9 Air & Space Law 3, at 193–195; see also, Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017), at 45. 2 See, Chapter 3. 3 The principle of sovereignty has a military background. The rise of military aircraft during the two major world wars in the twentieth century caused a need for strict control. Given the fact that airspace has no physical boundaries, there are no obstacles in a sense for an aircraft flying from the airspace of a country A into the airspace of a country B. Hence, reliance on sovereignty served as a relevant tool to safeguard and protect national airspace and security. See, among others, Petrus P.C. Haanappel, ‘The Transformation of Sovereignty in the Air’, 20 Air & Space Law 6 (1995), at 312–313.

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INTERNATIONAL AIR TRANSPORT Such aircraft, […], shall also, subject to the provisions of Article 7, have the privilege of taking on or discharging passengers, cargo, or mail, subject to the right of any State where such embarkation or discharge takes place to impose such regulations, conditions or limitations as it may consider desirable. Further, the subjacent State may require certain information, such as the route and aircraft information, for navigation, safety and security reasons. Therefore, Article 5 does not provide an absolute freedom for the provision of non-­scheduled air services.

5.1.2.2  Practical Application of International Non-­Scheduled Air Services The meaning of non-­scheduled air service has been clarified by the International Civil Aviation Organization (ICAO) as a “a commercial air transport service performed as other than a scheduled air service. A charter flight is a non-­scheduled operation using a chartered aircraft”.4 Therefore, the first sentence provides a negative definition, whereby the definition of ‘scheduled air service’ must be consulted. However, it provides some assistance as it gives one example of a non-­scheduled service, that is, chartered aircraft.

Did You Know? Charter flights are usually non-­ scheduled air services. They are performed for remuneration on an irregular basis. In simple words, an operator rents an aircraft for the operation of a charter flight, determining, autonomously origin and destination and relative schedule. Charter operations may be distinguished between:

 Private charters:

 single-­entity charters – an individual or a company bears the entire cost of the flight. The cost is per flight and not per person. Passengers are affiliated with a business (meeting, conference, VIP leisure travel).



 affinity charters – all passengers are affiliated with a business (sports,

concert) but they bear their own cost. None of the seats can be sold to members of the public.

 Public charters: A public charter is one in which a tour operator rents the

aircraft and advertises and sells seats to members of the public, either directly or through a travel agent. In the United States, for instance, the tour operator must also assume a legal responsibility to provide the transportation service, as required by the United States Department of Transportation (DOT).

4 ICAO, Doc. 9626, Manual on the Regulation of International Air Service (2016), Chapter 4.6.

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INTERNATIONAL AIR TRANSPORT Non-­scheduled international air services, which often include chartered holidays, private jets and general aviation, are generally operated:5 • pursuant to a charter contract on a point-­to-point and often plane-­load basis; • either on an ad hoc basis or on a regular but seasonal basis; • with more operational flexibility with respect to airports and hours of operation; • without the air carrier maintaining direct control over retail prices; and • subject to seeking permission, or giving prior notification, for each flight or series of flights, to/from the country of origin or destination or both. Therefore, non-­scheduled international air services do not account for the majority of international civil air transportation, which is instead conducted on a scheduled basis pursuant to Article 6 of the Chicago Convention 1944.

5.1.3 Regulation of International Scheduled Air Services 5.1.3.1  Article 6 Chicago Convention 1944 Article 6 of the Chicago Convention 1944 represents the fundamental starting point in the field of commercial regulation of air services. The provision reads as follows: No scheduled international air service may be operated over or into the territory of a contracting State, except with the special permission or other authorization of that State, and in accordance with the term of such permission or authorization.6 Unlike other subfields, where they have transferred their national sovereignty to international bodies (i.e. ICAO), or supra-­national entities (i.e. the European Union (EU)), States have made a strategic and widespread use of Article 6, by traditionally granting the “special permission or other authorization” to operate international scheduled air services in their territory on a case-­by-case basis, through the negotiation of so-­called air services agreements (ASAs). Although the Chicago Convention 1944 is silent on how such special permission or authorisation is to be granted, ASAs have traditionally been negotiated on a bilateral basis between States.7

5 Ibid. 6 Chicago Convention 1944, Art. 6. 7 Brian F. Havel and Gabriel S. Sanchez, The Principles and Practices of International Aviation Law (Cambridge University Press, 2014), at 75.

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5.1.3.2  Nature of International Scheduled Air Services A scheduled air service may be defined as: an air service open to use by the general public and operated according to a published timetable or with such a regular frequency that it constitutes an easily recognizable systematic series of flights.8 Therefore, the difference between scheduled and non-­scheduled air services is based on the element of frequency. However, in practice, the proliferation of seasonal routing and ad hoc air services may complicate the matter. International scheduled air services are defined as a series of flights that possesses all the following characteristics: • It passes through the airspace over the territory of more than one State; • It is performed by aircraft for the transport of passengers, mail or cargo for remuneration, in such a manner that each flight is open to use by members of the public; and • It is operated so as to serve traffic between the same two or more points, either (a) according to a published timetable; or (b) with flights so regular or frequent that they constitute a recognisable systematic series.9 In practice, the economic regulation of international scheduled air services is strictly connected to the specification of international routes. As a result, national air carriers have given rise to international networks patterned around the major airport(s) in their respective countries.10

5.1.4 Notion of Cabotage11 The term cabotage in aviation is characterised by a strong economic connotation. However, as the etymology of the word demonstrates, this concept finds its roots in maritime law and does not relate to economic activities or phenomena.12

  8 ICAO, Doc. 9626 (2016), Chapter 5.3.   9 ICAO, Doc. 7278-C/841, Definition of Scheduled International Air Service (1952). 10 Henry A. Wassenbergh, ‘The ‘Sixth’ Freedom Revisited’, 21 Air & Space Law 6 (1996), at 285–286. 11 See also, Section 2.1.2. 12 The term ‘cabotage’ is believed to “have originated either from the French word ‘cabot’, meaning a small vessel, or the Spanish word ‘cabo’, which described navigation from cape to cape along the coast without entering the high seas”. See, Paul S. Dempsey, Public International Air Law (McGill University Institute and Centre for Research in Air and Space Law, 2008), at 517.

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INTERNATIONAL AIR TRANSPORT In aviation law, cabotage refers to the carriage of traffic between two points, which are both located within the territory of one State, by a foreign carrier.13 As a matter of example, a domestic air service between Los Angeles (United States) and New York (United States) operated by an Argentinian air carrier would be a cabotage air service. The provision of cabotage rights is expressly prohibited by virtue of Article 7 of the Chicago Convention 1944. Each contracting State shall have the right to refuse permission to the aircraft of other contracting States to take on in its territory passengers, mail and cargo carried for remuneration or hire and destined for another point within its territory.14 Pursuant to the above provision, cabotage rights are mostly not granted under ASAs. States have traditionally been conservative and have exercised control of their internal domestic air operations. However, in some exceptional cases, cabotage rights were negotiated and exchanged by virtue of liberal ASAs. Examples of these include the ASA between Singapore and the United Kingdom15 and the Tasman Pact between Australia and New Zealand, which grants cabotage privileges to Australian and New Zealander airlines only. Notably, a further exceptional case is represented by the so-­called ‘cabotage with no reciprocity law’, which was adopted by Chile, which allows any air carrier from any country to perform cabotage flights within Chilean territory, even if Chile has not concluded an ASA specifically allowing such operations.16

Did You Know? The EU has deprived the term cabotage of its actual meaning, at least within the European borders. Regulation (EU) No. 1008/2008,17 has established the notion of ‘Community air carrier’ and delineated a sort of new EU domestic market. As a matter of example, an Irish established airline, such as Ryanair can provide air services between Venice and Palermo, Italy, as well as Paris and Marseille, France. Similarly, the English and Spanish carriers EasyJet and Vueling offer connections, respectively, between Cologne and Berlin, Germany, and Edinburgh and London, United Kingdom.

13 See, among others, Bin Cheng, The Law of International Air Transport (Oceania, 1962), at 322; Pablo Mendes de Leon, Cabotage in Air Transport Regulation (Martinus Nijhoff Publishers, 1992), at xi. 14 Chicago Convention 1944, Art. 7. 15 See, Alan K.J. Tan, ‘Singapore’s New Air Services Agreements with the EU and the U.K.: Implications for Liberalization in Asia’, 73 Journal of Air Law and Commerce 2 (2008), at 351–355. It must be noted that, as previously observed, cabotage rights have so far been only negotiated and granted in the context of agreements involving countries with a very limited domestic market, such as ­Singapore. See also, Brian F. Havel, Beyond Open Skies: A New Regime for International Aviation (Kluwer Law International, 2009), at 129. 16 The only use of such policy was made by the Bolivian carrier Amaszonas, which served regular flights between cities in Northern Chile for about a year. 17 Regulation of the European Parliament and of the Council No. 1008/2008 on common rules for the operation of air services in the community, 2008 O.J. L 293 of 31 October of 2008.

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INTERNATIONAL AIR TRANSPORT Cabotage rights can be granted between two States, as long as the respective arrangement does not specifically exclude the right of other States to be granted such cabotage rights. Accordingly, Article 7 provides that the arrangement must not be specifically exclusive – that is, discriminatory – in favour of only one or several States.18 Furthermore, the wording of Article 7 is such in order to prevent situations in which powerful States would take advantage of their advantageous position vis-­à-vis minor or underdeveloped countries.

5.1.5 Operation of Pilotless Aircraft 5.1.5.1  Article 8 Chicago Convention 1944 Article 8 of the Chicago Convention 1944 specifically provides a legal mechanism for ‘pilotless aircraft’. No aircraft capable of being flown without a pilot shall be flown without a pilot over the territory of a contracting State without special authorization by that State and in accordance with the terms of such authorization. Each contracting State undertakes to insure that the flight of such aircraft without a pilot in regions open to civil aircraft shall be so controlled as to obviate danger to civil aircraft.19 As a result, this provides a lex specialis provision for ‘pilotless aircraft’, whereby such aircraft do not fall under the scope of Articles 5 and 6 of the Chicago Convention 1944.

5.1.5.2  Pilotless Aircraft v. Without a Pilot The title of Article 8 of the Chicago Convention 1944 refers to the term ‘pilotless aircraft’, which is not defined in the Convention nor in its Annexes. Two core interpretations of this term are: • there is simply no pilot aboard of the aircraft, but there may be one on the ground or on board of another aircraft, which refers to ‘so controlled’; or • the aircraft is flown entirely without any pilot intervention, not even from a remote location, which would stick closely to the literal wording of ‘without a pilot’.20 Therefore, the scope of Article 8 of the Chicago Convention 1944 depends on which interpretation of ‘pilotless aircraft’ is adopted. If the aircraft is not an Article 8 aircraft, then it will be subject to the rules of Articles 5 and 6.

18 See, Ludwig Weber, ‘External Aspects of ECC Air Transport Liberalization’, 15 Air & Space Law 5/6 (1990), at 282. 19 See, Chapter 2. 20 See, Mikko Huttunen, ‘Unmanned, Remotely Piloted, or Something Else? Analysing the Terminological Dogfight’, 42 Air & Space Law 3 (2017), at 349–368.

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Definitions ICAO has opted for different terms in its publications:21 Autonomous aircraft: “An unmanned aircraft that does not allow pilot intervention in the management of the flight.” Remotely Piloted Aircraft: “An aircraft where the flying pilot is not on board the aircraft.”22 Remotely Piloted Aircraft System: “A set of configurable elements consisting of a remotely-­piloted aircraft, its associated remote pilot station(s), the required command and control links and any other system elements as may be required, at any point during flight operation.” Unmanned Aircraft: “An aircraft which is intended to operate with no pilot on board.” Unmanned Aircraft System: “An aircraft and its associated elements which are operated with no pilot on board.” These terms also have varying definitions at a national or regional level.23 ICAO has provided its interpretation in the thirty-­fifth session of the ICAO Assembly, where it noted that a ‘pilotless aircraft’ is “in the sense of Article 8 […] is flown without a pilot-­in-command on-­board and is either remotely and fully controlled from another place (ground, another aircraft, space) or programmed and fully autonomous.”24 ICAO has correspondingly amended three of the Annexes to the Chicago Convention 1944: • Annex 2: Rules of the Air now contains provisions on Remotely Piloted Aircraft System. • Annex 7: Aircraft Nationality and Registration Marks includes provisions on Remotely Piloted Aircraft. • Annex 13: Aircraft Accident and Incident Investigation has provisions on Unmanned Aircraft System. This shows that ICAO has not adopted the terminology of the Chicago Convention 1944 and is using specific terms to define the scope of the amendments.

21 ICAO, Unmanned Aircraft Systems (UAS), Cir. 328 AN/190 (2011), at Glossary. 22 See, ICAO, Manual on Remotely Piloted Aircraft Systems, ICAO Doc. 100119. 23 See, Benjamyn I. Scott, The Law of Unmanned Aircraft Systems: An Introduction to the Current and Future Regulation under National, Regional and International Law (Kluwer Law International, 2016), at Ch. 2. 24 ICAO, UAS Circular 328, 2.1.

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5.1.5.3  Special Authorisation Article 8 of the Chicago Convention 1944 requires contracting States to provide ‘special authorization’ before an ‘aircraft capable of being flown without a pilot’ can fly within its territory (transit and traffic rights). 1.1 A remotely piloted aircraft system (RPAS) engaged in international air navigation shall not be operated without appropriate authorization from the State from which the take-­off of the remotely piloted aircraft (RPA) is made. 1.2 An RPA shall not be operated across the territory of another State without special authorization issued by each State in which the flight is to operate. This authorization may be in the form of agreements between the States involved. This, therefore, reflects the requirements of Article 6. However, current ASAs do not contain provisions for Article 8 aircraft.

5.1.5.4  Obviate Danger  Article 8 of the Chicago Convention 1944 states that pilotless aircraft “shall be so controlled as to obviate danger to civil aircraft”. The term ‘obviate danger’ is not defined nor is it usually found in international civil aviation, with the term ‘due regard’ being more common.25

5.1.6 Prohibited Areas: Article 9 Chicago Convention 1944 There are two mechanisms in international law that allow for the lawful closure of an airspace.

5.1.6.1  Exercise of Sovereign Power First, a State can choose to close a part or all of its airspace. Article 9 of the Chicago Convention 1944, which finds its origins in Article 3 of the Paris Convention 1919, is titled ‘Prohibited Areas’ and provides a legal mechanism for contracting States to close, wholly or in part, its airspace under certain conditions. Article 9 does not provide for an open-­ended mechanism for denying foreign aircraft access to its airspace, rather it provides certain curtailments and administrative steps. The sole purpose of this provision is to allow contracting States the right to ‘restrict’ or ‘prohibit’ the use of their airspace by another contracting State. Annex 2 on the ‘Rules of the Air’ provides, under Chapter 1, definitions that aim to clarify the scope of Article 9. A prohibited area is defined as “[a]n airspace of defined dimensions, above the land areas or territorial waters of a State, within which the flight of aircraft is prohibited.” While the definition is circular, it is clear that it is an area of a contracting State’s airspace that it denies access to by foreign aircraft. A restricted area is defined as “[a]n airspace of defined dimensions, above 25 See, Chicago Convention 1944, Art. 3(d).

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INTERNATIONAL AIR TRANSPORT the land areas or territorial waters of a State, within which the flight of aircraft is restricted in accordance with certain specified conditions.” Annex 2, Section 3.1.11, then makes it clear that:  Aircraft shall not be flown in a prohibited area, or in a restricted area, the particulars of which have been duly published, except in accordance with the conditions of the restrictions or by permission of the State over whose territory the areas are established. The raison d’être for the prohibition or restriction can only be based on two considerations. • The first is for ‘military necessity’: State practice often results in focus being given to the ‘military’ element, with the ‘necessity’ of the activity being more generously interpreted. This has resulted in airspace usage being limited over military sites, during military flight training and during flight operations. • The second consideration is for ‘public safety’: Therefore, a Member State may limit the usage of its airspace where it believes public safety is jeopardised. State practice has shown that this can include, but is not restricted to, limiting flight over densely populated areas, such as capital cities, or other events attended by member of the population. These are the only two considerations provided for under Article 9. Thus, prohibition or restriction for economic or political justifications are not permitted. Second, the prohibition or restriction must be applied uniformly. This means that the prohibition or restriction must apply equally to all contracting States. This means that no discrimination should be in place against other contracting States. Therefore, setting limitations on a specific contracting State would violate Article 9. The fourth requirement is that the prohibition or restriction under Article 9 must be to ‘certain areas’ which much be clearly defined and must be of “reasonable extent and location so not to interfere unnecessarily with air navigation.” Finally, any action taken under Article 9 should be notified to the other contracting States and to ICAO. Notification is complied with via a Notice to Airmen, or more commonly known as a ‘NOTAM’, which is “[a] notice distributed by means of telecommunication containing information concerning the establishment, condition or change in any aeronautical facility, service, procedure or hazard, the timely knowledge of which is essential to personnel concerned with flight operations.”26 Article 9(b) allows contracting States to close their airspace with immediate action, thus reversing the notification after the closure. This can also be done in exceptional circumstances, during a period of emergency or in the interest of public safety. A notable instance of this was the 9/11 attacks in the United States. The limitation must be for a limited period and the measure cannot target a specific contracting State.

26 Annex 15 to the Chicago Convention 1944, Aeronautical Information Services, 60th edn (July 2018), at 1–7.

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5.1.6.2  No-­Fly Zones27 Measures can be taken against a State in order to close parts or all of its airspace. Without the consent of the affected State, such action can only be taken by the United Nations Security Council under Chapter VII of the United Nations Charter.28 Accordingly, the United Nations Security Council can declare a ‘flight-­ban’/’no-fly zone’ and suspend a government’s exercise of effective control over its airspace with legally binding effect. ‘No-­fly zones’ have been implemented, for example, in: • Bosnia and Herzegovina (1992)29 • Iraq (1992)30 • Kosovo (1999)31 • Libya (2011)32 Under Chapter VII, a no-­fly zone can only be established as a measure to prevent threats to the peace, breaches of the peace and acts of aggression. In practice, no-­fly zones have been adopted for humanitarian purposes. For example, in the case of Bosnia Herzegovina, a no-­fly zone was established to allow humanitarian flights. In Libya, the primary aim was that of protecting civilians on the ground from Libyan air strikes. Thus, it follows that no-­fly zones cannot be implemented due to mere military necessity.33

5.2  Freedoms of the Air ‘Freedoms of the air’ is the conventional term used to define operational and traffic rights in air transport.34 As easily perceivable, these rights constitute the core of air services agreements’ negotiations, as without their exchange, air transport would only amount to the operation of domestic air services, that is, air services departing and landing in points within a State’s territory.

27 See, for more information, Stefan A. Kaiser, ‘No-Fly Zones Established by the United Nations Security Council’, 3 ZLW 402 (2011). 28 Charter of the United Nations, 1 UNTS XVI (1945), Chapter VII. 29 United Nation Security Council Resolution 781 (1992). 30 United Nation Security Council Resolution 816 (1993). 31 United Nation Security Council Resolution 1244 (1999). 32 United Nation Security Council Resolution 1973 (2011). 33 See, Section 3.2.1.4. 34 As some commentators have reasonably observed, the term ‘freedoms of the air’ seems somehow logically inappropriate. As a result, it would be more accurate to “speak of the freedoms as ‘privileges’, which is the word used in both the Two Freedoms and Five Freedoms Agreements”. Havel and Sanchez, The Principles and Practices of International Aviation Law (2014), at 77. See also, Mendes de Leon, Introduction to Air Law (2017), at 58: where the freedoms of the air are considered “unfreedoms of the air, as they must be obtained through negotiations”. Nevertheless, the canonical expression ‘freedoms of the air’ is adopted in this book.

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Did You Know? Freedoms of the air can be distinguished as per their nature.

 The first and second freedoms are technical or operational freedoms.  The third to ninth freedoms are commercial freedoms or traffic rights. A second distinction may relate to the origin of such freedoms.

 The first to fifth freedoms have originally been encompassed in the ancillary

accords to the Chicago Convention 1944, and, therefore, have a legal origin.

 The sixth to ninth freedoms have evolved in the practice of operation of international air transport services.

Technical freedoms ‘only’ entitle airlines of a State to fly through the airspace of another State and make a technical stop therein.35 Conversely, traffic rights refer to the privilege of carrying traffic including passengers and cargo. More precisely, the commercial freedoms entitle the airline of a State to carry out ‘international commercial activity’, picking up and discharging passengers or cargo in a different State.36

5.2.1  First Freedom It is the right for an airline of a State A to overfly through the airspace of a State B. A flight operated by the Australian air carrier, Qantas, flies over the airspace of New Zealand

5.2.2 Second Freedom It is the right for an airline of a State A to make a stop for technical reasons (maintenance, refuelling) in a State B. A flight operated by the British air carrier, British Airways, makes a technical stop, for refuelling reasons, in India, without discharging its passengers thereto

35 Two Freedoms Agreement, Art. 1(1). 36 The dichotomy technical-commercial freedoms is not itself satisfactory. A first freedom passenger flight, operated by an airline of a State A, entering the airspace of a State B, and then landing in a point in the same State A, would still maintain a commercial nature.

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Did You Know? The relevance of the second freedom has significantly evolved in practice. At the inception of international civil aviation, airlines had a strong need to make technical stops during long-­haul routes. The use of ultra-­long-range aircraft, along with the technological enhancement have considerably diminished its (aero)political and commercial impact.   However, no airline “would want to risk an aircraft being stranded in the air because of a technical emergency until it could return to its home State”.37

5.2.3 Third Freedom It is the right for an airline of a State A to carry passengers and/or cargo from its territory to a point within the territory of a foreign State B. A flight operated by the German air carrier, Lufthansa, carries passengers from Frankfurt (Germany) to Doha (Qatar)

5.2.4  Fourth Freedom It is the right for an airline of a State A to carry passengers and/or cargo from the territory of a foreign State B, to a point within its own territory. A flight operated by the German air carrier, Lufthansa, carries passengers from Doha (Qatar) to Frankfurt (Germany)

Did You Know? The fourth freedom of the air entitles an airline that has operated a third freedom flight to pick up new passengers in a foreign country and head back to its origin country. Most passengers in the world fly a combination of third and fourth freedom services, that is, a return service.

5.2.5  Fifth Freedom It is the right for an airline of a State A to carry passengers and/or cargo between two foreign States B and C, provided such service is the continuation of a service originating in the territory of State A. A flight operated by the Emirati air carrier, Emirates Airline, carries passengers from Dubai (United Arab Emirates) to Singapore (Singapore) and, subsequently, picks up new traffic carrying it from Singapore (Singapore) to Melbourne (Australia) 37 Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 78.

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INTERNATIONAL AIR TRANSPORT The fifth freedom causes crucial air policy issues, as it requires the simultaneous existence of a tripartite political adherence. In other words, State A not only needs to maintain an ASA with State B, but also entering into an ASA, explicitly allowing for the operation of such fifth freedom right, with State C.

5.2.6 Sixth Freedom It is the right for an airline of a State A to carry passengers and/or cargo between two foreign States B and C with an intermediate stop, for commercial reasons (discharge passengers and cargo and pick up new traffic), in the territory of its home State A. A flight operated by the Dutch air carrier, KLM, carries passengers from Delhi (India) to Amsterdam (Netherlands), and, subsequently, picks up new traffic carrying it from Amsterdam (Netherlands) to New York (United States)

Did You Know? The sixth freedom has emerged in airline practice, with particular regard to carriers with a small home market, using modern airport facilities and benefitting from strategic geographical locations.38 Examples are KLM, Singapore Airlines, Qatar Airways, Emirates Airlines, Etihad, which operate under successful ‘hub and spoke’ networks.39    From an operational standpoint, a sixth freedom flight is merely a combination of a fourth and a third freedom flights. As a result, sixth freedom rights are not exchanged under the terms of ASAs, as many States consider it sufficient for a State A to enter into two separate ASAs with a second and a third State for the exchange of third and fourth freedom rights.

5.2.7 Seventh freedom It is the right for the airline of a State A to carry passengers and/or cargo between two foreign States B and C, without any link with the territory of its home State A.

38 See, among others, Wassenbergh, ‘The Sixth Freedom Revisited’ (1996), at 285–294. See also, Henry A. Wassenbergh, Principles and Practices in Air Transport Regulation (Kluwer Law International, 1993), at 101. 39 Such carriers efficiently operate under the so-called operational scheme ‘hub and spoke’. The term has been extensively discussed in economic literature, as to which, see, John F. O’Connell and Oriol E. Bueno, ‘A Study into the Hub Performance Emirates, Etihad Airaìways and Qatar Airways and Their Competitive Position against the Major European Hubbing Airlines’, 69 Journal of Air Transport Management (2018), at 257–268; Prachee van Brandenburg-Kulkarni, ‘“Sixth Freedom” Revisited in the Twenty-First Century’, 40 Air & Space Law 1 (2015), at 55–63; Ian Savage and Burgess Scott, ‘Deploying Regional Jets to Add New Spokes to Hub’, 10 Journal of Air Transport Management 2 (2004), at 147–150.

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INTERNATIONAL AIR TRANSPORT A flight operated by the Korean air carrier, Asiana Airlines, carries passengers from Beijing (China) to Jakarta (Indonesia), without originating or making a stop in Korea

Did You Know? Such freedom is rarely, but increasingly, granted with respect to passenger services. However, it represents a fundamental feature of the air cargo industry, whereby the interest – and in certain instances, the need – for express and fast delivery has contributed to a progressive liberalisation. Major cargo airlines, such as FedEx, CargoLux International, Polar Air Cargo, operate seventh freedom flights.

5.2.8 Eight Freedom: ‘Relative’ or ‘Quasi’ Cabotage40 It is the right for an airline of a State A to carry passengers and/or cargo between two points within the territory of a foreign State B, provided such service is the continuation of a service originating in the territory of the home State A. A flight operated by the United States air carrier, Delta Air Lines, carries passengers from Chicago (United States) to London (United Kingdom) and, subsequently, picks up new traffic carrying it from London (United Kingdom) to Manchester (United Kingdom)

5.2.9 Ninth Freedom: ‘Absolute’ or ‘Pure’ Cabotage It is the right for an airline of a State A to carry passengers and/or cargo between two points within the territory of a foreign State B, without any link with the territory of its home State A. Notwithstanding very limited and isolated examples,41 ASAs specifically exclude cabotage. A flight operated by the United States air carrier, Delta Air Lines, carries passengers from London (United Kingdom) to Manchester (United Kingdom), without originating or making a transit stop in the United States 40 The term cabotage is derived from maritime law. In aviation law, it can be defined as the right of an airline to perform services between two points in a foreign territory. See, among others, Mendes de Leon, Cabotage in Air Transport Regulation (1992); Cheng, The Law of International Air Transport (1962); Havel, Beyond Open Skies: A New Regime for International Aviation (2009); Petrus P.C. Haanappel, Pricing and Capacity Determination in International Air Transport: A Legal Analysis (Kluwer Law International, 1984). 41 A notable example is the ASA between United Kingdom and Singapore of 2006 where reciprocal cabotage access was exchanged and granted to the designated carriers, namely, Singapore Airlines and British Airways. See, David T. Duval, Air Transport in the Asia Pacific (Routledge, 2014). See also, Tan, ‘Singapore’s New Air Services Agreements with the EU and the UK: Implications for Liberalization in Asia’ (2008), at 351, 362–365.

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A

B

First Freedom

B

A

Fourth Freedom

B

Fifth Freedom

A

Seventh Freedom Operate between two foreign States.

B

Set down passengers in a foreign State.

A

B

Sixth Freedom

Carry passengers from a second to a third State (beginning or ending flight in home State).

B

A Third Freedom

Land without picking up or setting down passengers or cargo.

Pick up passengers in a foreign State.

A

B

Second Freedom

Fly over without landing.

A

A

B

Eighth Freedom Operate domestically in a foreign State (with flight originating in home State).

Carry passengers between foreign States (going through home State).

A

B

Ninth Freedom Operate domestically in a foreign State (with no flight connections to home State).

Figure 5.1  Freedoms of the air

Did You Know? Due to technological development, a tenth freedom is emerging. This is the carriage of passengers, cargo or mail between the same point within the territory of a single State by a foreign operator. The tenth freedom was first discussed within the context of suborbital transportation42 as, for example, in the case of a suborbital vehicle of State A, operating a suborbital operation in State B, which lands and takes off from the same point (point A to point A) for ‘space tourism’ purposes.    This ambitious project has been adopted by Virgin Galactic, a company owned and controlled by United States, United Kingdom and United Arab Emirates individuals, which plans to operate commercial suborbital operations from a point in New Mexico, United States, via the edge of outer space, and then back to the same point in New Mexico. However, such cabotage flights are not yet commercially operated.

42 Benjamyn I. Scott, ‘International Suborbital Passenger Transportation: An Analysis of the Current Legal Situation of Transit and Traffic Rights’, 14 Issues in Aviation Law and Policy 2 (2015), at 277–311. See, for more information on suborbital transportation, Chapter 12.

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   The tenth freedom is not confined to suborbital activities. For example, point A to A flights are commonly unmanned aircraft operations. Although the cabotage issue has not been acknowledged, the EU, in its recent regulatory efforts on unmanned aircraft, has facilitated such operations. It plans to create an EU Commission Delegated Regulation on third-­country UAS operators. This will allow unmanned aircraft which are operated by a non-­EU operator to fly point A to A (as well as point A to B flights) within the EU.43

5.3 Rise of Bilateralism 5.3.1 Pre-­Liberalisation: Bermuda I and Bermuda II Air Services Agreements After the entry into force of the Chicago Convention 1944 and its ancillary accords, States resorted to the conclusion of bilateral ASAs to grant, and specifically regulate, traffic rights from/ to their territory. Bilateral ASAs are the most common vehicle devoted to the negotiation and exchange of air traffic rights. Currently, there are more than 5,000 bilateral ASAs worldwide.44 

5.3.1.1  Bermuda I Agreement The most monumental example is the agreement between the United Kingdom and the United States, concluded in 1946, and commonly referred to as the Bermuda I Agreement.45 This agreement has represented the typical vehicle for the operation of air services internationally for over thirty years.46 The Bermuda I Agreement has been defined as a sort of compromise between the liberal wave promoted by the United States and a predetermination approach invoked by the United Kingdom.47 The agreement’s main features are the following: • ‘double approval pricing’, that is, air fares were to be filed with and approved by the aviation authorities of both parties to the agreement. • tariffs were to be established within a framework published by the International Air Transport Association (IATA).48 43 See, EASA, Opinion No 01/2018: Introduction of a regulatory framework for the operation of unmanned aircraft systems in the ‘open’ and ‘specific’ categories. 44 European Parliament, ‘Competition in Air Transport Workshop proceedings’, PE 618.984, April 2018, at 23. 45 Air Services Agreement between the United States and the United Kingdom, 11 February 1946, 60 Stat. 1499, T.I.A.S. No. 1507 (Bermuda I Agreement). 46 Mendes de Leon, Introduction to Air Law (2017), at 51. 47 See, for instance, Haanappel, Pricing and Capacity Determination in International Air Transport (1984), at 44. 48 Ibid., at 47.

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INTERNATIONAL AIR TRANSPORT • it mostly concerned third and fourth freedom operations, but also granted the parties some limited fifth freedom rights;49 • designated airlines were given a discrete freedom in relation to frequency and capacity.50 • the agreement included a list of predetermined routes, including intermediate and beyond points. • designation was granted to a very limited number of airlines on both sides (for instance, PanAm, British Caledonian and TWA). The Bermuda I Agreement strongly characterised international aviation relations for  more than two decades and was successfully copied on a worldwide basis until the ­mid-­1970s.

5.3.1.2  Bermuda II Agreement The Bermuda I Agreement was replaced in 1977 by a new more restrictive agreement between the United Kingdom and the United States, also known as Bermuda II Agreement.51 However, due to its rigid and complex predetermination element, such an agreement did in no way replicate the success of its predecessor. The most relevant aspects of the Bermuda II Agreement contemplate, among others: • predetermined capacity (50–50);52 • it drastically reduced fifth freedom rights; and

49 Cheng, The Law of International Air Transport (1962), at 336–338. 50



Practically speaking, the dominant feature of the Bermuda Agreement was – and remains – the freedom given to airlines to operate services at the frequency/capacity they consider justified, provided they comply with the general provisions of the Agreement since it is the airlines that control the situation, once the agreement has been reached and the airlines designated.

Barry R. Diamond, ‘The Bermuda Agreement Revisited: A Look at the Past, Present and Future of Bilateral Air Transport Agreements’, 41 Journal of Air Law and Commerce 3, at 447. 51 See, Agreement Concerning Air Services, United States–United Kingdom, 1977, 28 UNTS 5367 (Bermuda II Agreement). 52 See, Henry A. Wassenbergh, Public International Air Transportation Law in a New Era (Springer, 1976), at 153–156; Havel and Sanchez, Principles and Practice of International Aviation Law (2014), at 103–104; Haanappel, Pricing and Capacity Determination in International Air Transport: A Legal Analysis (1984), at 78; Andreas F. Lowenfeld, ‘The Future Determines the Past: Bermuda I in the Light of Bermuda II’, 3 Air & Space Law 1 (1978), at 4; Petrus P.C. Haanappel, ‘Bilateral Air Transport Agreements: 1913–1980’, 5 Maryland Journal of International Law 2 (1980), at 241 et seq; Paul S. Dempsey, ‘The Evolution of Air Transport Agreements’, 33 Annals of Air and Space Law (2008), at 127.

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INTERNATIONAL AIR TRANSPORT • only two United States carriers were designated to provide services under the agreement.53 The strict predetermination element contained in the Bermuda II Agreement considerably limited, in fact, the possibility of new entrants and competition among airlines.

Did You Know? For ease of reference, below is the integral text of Article 3 of the Bermuda II Agreement, which strictly regulates the number of designations allowed under the Agreement itself. “Article 3 – (Designation and Authorization of Airlines) (2) […] each Contracting Party shall have the right to designate not more than: (a) two airlines on each of two gateway route segments of its own choosing; (b) one airline on each gateway route segment other than those selected under subparagraph”.

5.3.2 Early Multilateral Developments The Chicago Convention 1944 was not conceived to provide a systematic mechanism for the exchange of traffic rights among States. However, upon its conclusion, the drafters opened up for signature two additional international treaties, designed to establish a multilateral scheme for trade of air transport services. These two instruments are the International Air Services Transit Agreement 1944 (‘Two Freedoms Agreement’) and the International Air Transport Agreement 1944 (‘Five Freedoms Agreement’). 

Treaty Information Title of Treaty: International Air Services Transit Agreement Short Title: Two Freedoms Agreement 53 The Bermuda II Agreement: has taken giant steps towards lessened competition. It has reduced the number of gateway cities from which more than one U.S. carrier may serve England. It has reduced Fifth Freedom rights drastically. It has afforded U.K. carriers rights into every city served by U.S. carriers on a nonstop basis to London and it embraces drastic capacity controls which Bermuda I never had. See, Robert R. Gray, ‘The Impact of Bermuda II on Future Bilateral Agreements’, 3 Air & Space Law 1 (1978), at 18; See also, Petrus P.C. Haanappel, ‘Bermuda 2: A First Impression’, 2 Annals of Air and Space Law (1977), at 139–141.

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Date of Adoption: 7 December 1944 Citation: 84 UNTS 389 Entry into Force: 30 January 1945 Legal Status: 133 State Parties

Treaty Information Title of Treaty: International Air Transport Agreement Short Title: Five Freedoms Agreement Date of Adoption: 7 December 1944 Citation: 171 UNTS 387 Entry into Force: 30 January 1945 Legal Status: 11 State Parties

They attempted to regulate the exchange of transit and traffic rights on a multilateral basis. Notably, the two agreements instituted the freedoms of the air.54 However, the two agreements had a very opposite history. While the Five Freedoms Agreement represents a failure, having been ratified merely by eleven States, the Two Freedoms Agreement, which provides overflight and technical landing rights, constitutes a successful multilateral agreement, having reached widespread consensus, with 133 ratifications as of August 2019. However, countries with a large airspace, including Brazil, Canada and Russia, are not parties to the Two Freedoms Agreement, as they consider their airspace a significant asset in the negoti­ ations of ASAs.55 The rights granted under the multilateral regime of the Two Freedoms Agreement were of crucial importance for the development of international air transport. They go under the name of operational rights, as they do not grant any right relating to the embarkation/disembarkation of passengers, cargo or mail.56

5.3.3  ‘Open Skies’ Agreements The liberal approach that has characterised the last three decades of air transport regulation has undoubtedly resulted in gradual, but constant, liberalisation of crucial domestic – and 54 See, Havel and Sanchez, The Principles and Practices of International Aviation Law (2014), at 73. 55 See, Mendes de Leon, Introduction to Air Law (2017), at 57. 56 Chicago Convention 1944, Art. 96(d) clarifies that “stop for non-traffic purposes means a landing for any purpose other than taking on or discharging passengers, cargo or mail”.

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INTERNATIONAL AIR TRANSPORT regional – air services markets. The United States Deregulation Act of 1978,57 which was subsequently followed by the three packages of liberalisation of the EU air transport market,58 adopted by the EU, and ultimately culminated in the Regulation (EC) No. 1008/2008,59 have marked drastic changes and vertiginous development in the whole transport sector.

Did You Know? The process of liberalisation of the EU internal aviation market consists of three regulatory packages:

 The first package (1987) included several legal instruments, the purpose of

which was to promote competition between EU airlines. In particular, with respect to fares, even without removing all the restrictions, it introduced a scheme of fare zones, within which the airlines were to be allowed to act freely.

 The second package (1990) took into consideration commercial aspects, such

as fares – introducing the double disapproval system –, access to market and capacity, but it was only with the adoption of the third package, consisting of three regulations, that the Single Aviation Market in Europe was guaranteed.

 All the principles set in the third packages were included, at a later time, in the Regulation 1008/2008, which represents today the centrepiece of the liberalised regulation of the EU aviation industry.

Regulation No. 1008/2008 lays down rules on substantial ownership and effective control on the licensing of air carriers and establishes specific criteria, including financial criteria, for the granting of licences, which is dealt with by national aviation authorities (NAAs). An airline in possession of an Air Operator’s Certificate (AOC) from one of the EU Member States is considered a ‘Community carrier’ (now ‘Union carrier’) and can fly anywhere within the internal EU market without any restriction as to routes, capacity, frequency and pricing.

What is more, the deregulation wave not only had an impact on national/regional air services markets, but found its most significant expression in the adoption of new international policy aiming at eliminating barriers and restrictions in favour of a more liberal 57 Airline Deregulation Act of 1978, 92 Stat. 1705, 49 U.S.C. 1551. 58 See, for a detailed analysis of the three packages here mentioned, Elmar Giemulla and Ludwig Weber, International and EU Aviation Law: Selected Issues (Kluwer Law International, 2011), at 142–160. See, also Paul S. Dempsey, European Aviation Law (Kluwer Law International, 2004), at 64–68. 59 Regulation (EC) No. 1008/2008 of the European Parliament and of the Council on Common Rules for the Operation of Air Services in the Community, OJ L 293 3 of 31 October 2008.

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INTERNATIONAL AIR TRANSPORT ‘Open Skies’ approach. The ‘Open Skies’ policy has, since the 1990s, permeated air transport relations in such a way that, today, ASAs that include a number of certainly liberal, yet typical, elements are being identified as ‘Open Skies ASAs’.

Did You Know? The first Open Skies ASA was concluded in 1992 between The Netherlands and the United States. The agreement is considered to be a pioneer accord in the field of aviation relations. However, it is worth mentioning that the conclusion of the agreement of 1992 was only the ultimate aspect of an ‘Open Skies’ policy, which had been conducted between the two countries since late 1978.60 In fact, both KLM and United States carriers had unlimited reciprocal access to their respective markets before 1992.

At the core of ‘Open Skies’ ASAs is the element of competition.61 These agreements are characterised by a number of elements, including: • no limitations with regard to capacity; • opening of all routes; • unlimited exchange of third and fourth freedom rights, with, occasionally, also inclusion of fifth freedom rights, subject to approval from the third country involved; • multiple – that is, unlimited – designation; • pricing subject to rules of competition; and • fair and equal opportunity for airlines to compete.  The ‘Open Skies’ ASA concluded between the EU and the United States is a significant example of liberalisation of air services, as it grants unlimited air services opportunities between two of the major air transport markets worldwide. Notably, the EU has adopted a rather pronounced ‘Open Skies’ policy, having concluded relevant ‘Open Skies’ ASAs with the United States, Canada, Morocco, Israel and having announced plans to reach an agreement with among others China, Qatar, Brazil, Singapore, Mexico and Saudi Arabia.62 

60 See, Pablo Mendes de Leon, ‘Before and After the Tenth Anniversary of the Open Skies Agreement Netherlands–US of 1992’, 28 Air & Space Law 4/5 (2002), at 298; Henry A. Wassenbergh, ‘Common Market, Open Skies and Politics: A Bald Eagle’s-Eye View of Today’s Air Transport Regulation’, 25 Air & Space Law 4/5 (2000), at 178; Brian F. Havel, In Search of Open Skies: Law and Policy for a New Era in International Aviation (Kluwer Law International, 1997), at 191. 61 See, Mendes de Leon, ‘Before and After the Tenth Anniversary of the Open Skies Agreement ­Netherlands–US of 1992’ (2002), at 287. 62 See, EU Commission, An Aviation Strategy for Europe (2015). Link available at: https://ec.europa. eu/transport/modes/air/aviation-strategy/external_policy.

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5.3.4 Recent Multilateral ‘Open Skies’ Attempts The international air transport industry is not extraneous to the notion of multilateral ASAs. In fact, many have been the attempts of exchanging traffic rights on a multilateral level, even after the partial success of the above-­mentioned Two and Five Freedoms Agreements.  An interesting – and recent – example of multilateral ASA has been adopted by the Association of Southeast Nations (ASEAN), which set the ambitious target of establishing an ASEAN Single Aviation Market.63 The ASEAN achieved a meaningful progress by allowing the exchange of the first five freedoms of the air.64 A similar approach can be found in Africa, where some forty African countries have adopted, in 1999, the Yamoussoukro Decision, with the primary aim to liberalise inter-­African air services.65  In 2010, the Multilateral Open Skies Agreement for Member States of the Latin American Civil Aviation Commission was opened for signature. It provides that States may designate multiple airlines provided that they are established and have their principal place of business in one of the contracting States. The designated airlines may freely determine their capacity, prices and routes. Interestingly, the parties may grant each other up to the ninth freedom of the air. The inclusion of freedoms above the fifth is a clear progressive provision, which moves one step forward from what is usually recognised internationally in similar agreements. However, the parties may make reservations to any provision of the agreement, including those granting traffic rights. The result is that most States which have signed or ratified it, have done so limiting its effects with regard to traffic rights.

Did You Know? The European Common Aviation Area (ECAA) is considered a significant example of single air transport market. As well as all the EU Member States, it also includes Iceland, Norway, Croatia, Serbia, Montenegro, Albania, Bosnia and Herzegovina and Kosovo. By virtue of such an agreement, which was concluded in 2006, any airline of a State party to the ECAA can provide intra ECAA flights.66 The ambitious external aviation strategy of the EU has also given rise to a similar accord, the European Mediterranean Aviation Agreement (EMAA), which has gradually included Morocco, Jordan and Israel. Negotiations in this regard are being conducted to also include Tunisia, Algeria and Lebanon.

63 The Association of Southeast Asian Nations (ASEAN) is currently composed of ten Members: Philippines, Indonesia, Malesia, Singapore, Thailandia, Brunei, Vietnam, Birmania, Laos and Cambodia. 64 See, Duval, Air Transport in the Asia Pacific (2016), at 125. 65 See, Charles E. Schlumberger, Open Skies for Africa: Implementing the Yamoussoukro Decision (World Bank, 2010), at 3–18. 66 EU Commission, International Aviation ECAA, https://ec.europa.eu/transport/modes/air/­ international_aviation/country_index/ecaa_en.

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INTERNATIONAL AIR TRANSPORT Peculiarly, the only multilateral ASA to which the United States is a party does not present any element of geographical proximity and regional necessity. The Multilateral Agreement on the Liberalization of International Air Transportation (MALIAT)67 was signed in 2001 in Washington and includes features, such as open route schedule, unlimited capacity, exchange of traffic rights, including seventh freedom rights with regard to passengers and cargo operations68 and multiple designation. However, the MALIAT has very scarce relevance in practice.

5.4  Key Themes in Bilateral Air Services Agreements 5.4.1 Airline Nationality Requirements In practice, sovereign States have traditionally granted air traffic rights only to operators (airlines) capable of demonstrating that they are nationals of the other State party to the bilateral ASA. This restriction is far from being merely theoretical, as the ‘nationality rule’ de facto prevents airlines from catching a global market, as well as from cross-­border investment and unconditioned transfer of capital. It has been defined as the “organising principle of international air commerce”.69 Although the Chicago Convention 1944 expressly mentions the expression ‘airline of a State’ in more than a couple of provisions,70 it does not clarify the meaning of such a terminology; instead, it leaves it to national laws to determine. Nor does the Convention identify formal or practical requirements for an airline in order to be qualified as having the nationality of a certain country. Both the Two and Five Freedoms Agreements, however, contain a provision, which, in identical wording, declares that: each contracting State reserves the right to withhold or revoke a certificate or permit to an air transport enterprise of another State in any case where it is not satisfied that the substantial ownership and effective control are vested in nationals of a contracting State.71 Such a provision, which is present in the vast majority of bilateral ASAs, confers some discretionary powers to the aviation authorities of States that are, in fact, able to monitor, verify and approve which air carriers – and of what nationality – fly in their territory.

67 See, www.maliat.govt.nz/. Parties to the MALIAT: United States, Brunei Darussalam, New Zealand, Chile, Cook Islands, Mongolia, Tonga and Singapore. 68 Protocol to MALIAT Agreement (2001), Art. 2. See, www.maliat.govt.nz/protocol/. 69 Havel and Sanchez, The Principles and Practices of International Aviation Law (2014), at 88. 70 This expression can be found in the following provisions of the Chicago Convention 1944: Article 7 on cabotage; Articles 81 and 82, respectively, registration and abrogation of agreements; and Article 87, which regulates ‘penalty for non-conformity of airline’. 71 Two Freedoms Agreement, Art. 1, Section 5. The same provision is also envisaged by Five Freedoms Agreement, Art. 1, Section 6.

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INTERNATIONAL AIR TRANSPORT Notably, the nationality rule does not impose an obligation, but merely an option upon States.72

Did You Know? The reasons for the establishment of nationality requirements are multiple: Prestige: In the aftermath of World War II, airlines were seen as a sort of national symbol;73 National security: States intended to be able to exercise control over airlines flying in or through their airspace so as to reduce the number of terrorist attacks and hijacking of aircraft;74 Economic: A protectionist approach would have produced competitive benefit for the home State, which would have conferred advantages to their flag carriers;75 and Social: Protecting national airlines from foreign competition – and/or capital – would have secured the stability of jobs in the domestic airline industry.

The nationality rule comprises a national and an international element. • National level: The nationality rule is enshrined in domestic licensing legislations, which set out the requirements an airline must meet in order obtain an operating license, that is, a license granted by an aviation authority, through which an airline is permitted to perform air services.76 • International: This pertains to the negotiations of air traffic rights and is translated into bilateral ASAs through a so-­called ‘nationality clause’, which is usually integrally shaped on the above-­mentioned provision. In other words, in the context of a hypothetical ASA between Canada and Japan, the Canadian aviation authority would accept the designation of a carrier made by the Japanese 72 See, Alan I. Mendelsohn, ‘Myths of International Aviation’, 68 Journal of Air Law and Commerce 3 (2003), at 520–523; H. Peter Van Fenema, ‘Substantial Ownership and Effective Control as Aero­ political Criteria’, in Tanja L. Masson-Zwaan and Pablo Mendes de Leon (eds), Air and Space Law: De Lege Ferenda, Essays in Honour of Henri A. Wassenbergh (Martinus Nijhoff Publisher, 1992), at 30–31; Pablo Mendes de Leon, ‘The Future of Ownership and Control Clauses in Bilateral Air Transport Agreements: Current Proposals and Legal Objections’, in Stephan Hobe et al. (eds), Consequences of Air Transport Globalization (2003), at 33–36. 73 Isabelle Lelieur, Law and Policy of Substantial Ownership and Effective Control of Airlines (Ashgate, 2003), at 9. 74 Van Fenema, ‘Ownership Restrictions: Consequences and Steps to Be Taken’ (1998), at 63–64. 75 Andrea Trimarchi, ‘The Laws of Ownership and Control of Airlines: A Critical and Comparative Assessment of Selected Jurisdictions’, 12 Journal of Comparative Law 1 (2017), at 202. 76 See, Lelieur, Law and Policy of Substantial Ownership and Effective Control of Airlines (2003), at 3.

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INTERNATIONAL AIR TRANSPORT NAA only if the designated carrier formerly were to respect the nationality requirements prescribed by Japanese law. The most controversial feature of the airline nationality rule is the national one. In particular, it is of utmost relevance to bring clarity around the interpretation of the notions ‘substantial ownership’ and ‘effective control’, which are not defined in the Chicago Convention 1944 and its ancillary accords.

5.4.1.1  Substantial Ownership The term ownership refers to the ownership of voting shares of the airline or the holding company.77 However, the meaning of the adjective ‘substantial’, which does not have a legal value itself, is of difficult identification. As a result, this term has been arbitrarily inflected into domestic legislations that, in all cases, have conferred to it an analytical meaning, which, being expressed through percentage limitations, delineates the minimum quantity of voting shares that must be owned by national persons or entities. This cap ranges from 50 per cent to 75–80 per cent, with many States having adopted a ‘safe’ 50 per cent plus 1 minimum national ownership approach.78

Did You Know? Here is a list of maximum percentage of foreign airline ownership, as permitted by national law of the following countries:79

 Australia – 49 per cent; 100 per cent for airlines only operating domestically80  Brazil – 100 per cent81  Canada – 25 per cent  Chile – 100 per cent  China – 49 per cent  EU – 49.9 per cent  Japan – 49 per cent for non-­voting share; 33 per cent for voting share

77 Ibid. 78 Van Fenema, ‘Substantial Ownership and Effective Control as Aeropolitical Criteria’ (1992), at 28. 79 World Economic Forum, A New Regulatory Model for Foreign Investment in Airlines (January, 2016), at 18. 80 Australia places no legal limitation on foreign ownership and control of airlines that operate exclusively and entirely within its airspace. 81 In December 2018, Brazil took actions to implement a national law allowing full foreign ownership of Brazilian airlines. This liberalisation followed a severe bankruptcy of one of the main Brazilian airlines, Avianca Brazil. See, www.reuters.com/article/brazil-airlines/brazil-allows-100-pct-foreigninvestment-in-domestic-airlines-decree-idUSS0N1XG00Y.

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 Philippines – 40 per cent  United States – 25 per cent Chile represents a unique example. Chilean national law adopts the so-­ called ‘principal place of business’ approach.82 This strategy has also resulted in a boost of foreign investment in Chilean air carriers. For instance, the Chilean carrier JetSmart Airlines is wholly (100 per cent) owned by the American investment fund Indigo Partners, which is also the owner of the United States carrier Frontier Airlines and large shareholder of Volaris in Mexico and Wizz Air in the EU. JetSmart Airlines currently operates domestic flights within Chile and flights between Chile and Peru and between Chile and Argentina.   The ‘principal place of business’, along with the ‘regulatory control’ criterion, have been considered also by the ICAO in the context of relaxation or abolition of airline nationality requirements on a global scale.83

Following the interpretation rendered by the EU Commission in the Sabena/Swissair case, under EU law, ‘substantial ownership’ is deemed to exist when a person or an entity owns more than 50 per cent of the airline voting shares.84

5.4.1.2  Effective Control While ‘substantial ownership’ is a de jure criterion, and, as such, easy to ascertain, “the ‘effective control’ pertains to a de facto condition”.85 As a result, the control element has received widespread attention by regulators and stakeholders, as it is not linked to a tangible unit of measures. Control, indeed, may embrace different types of influence, that is, actual or legal, direct or indirect, negative or affirmative.86

Did You Know? United States domestic licensing law, for instance, provides that the president of the airline and at least two-­thirds of the board of directors and other managing officers must be United States citizens. EU law, instead, defines ‘effective control’ 82 The proof of the respect of this condition must be provided through a given set of circumstances, which, without being exhaustive, include: (i) the majority of aircraft are based in Chile; (ii) the majority of aircraft are registered in Chile; and (iii) the maintenance of the majority of aircraft is done in Chile. See, ICAO Working Paper, Proposal for the Liberalization of Air Carrier Ownership and Control, ATConf/6-WP/29 (2013), at 2. 83 Ibid. See also, Jose I. Garcia Arboleda, ‘Transnational Airlines in Latin America Facing the Fear of Nationality’, 37 Air & Space Law 2 (2012), at 103. 84 See, EU Commission Decision No. 95/404/EC on a Procedure Relating to the Application of the Council Regulation 2407/92 (Swissair/Sabena) O.J. (1995) L239/19. 85 Haanappel, ‘Airline Ownership and Control and Some Related Matters’ (2001), at 94. 86 Mendes de Leon, Introduction to Air Law (2017), at 48.

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as “the possibility of directly or indirectly exercising a decisive influence on the airline, by using all or part of the assets or by exercising a decisive influence in the running of the airline’s business”.87

Regulators have attempted to provide a comprehensive definition of ‘effective control’. Factual elements, which may concur to the identification of whom has the ‘effective control’ of an airline may include: • the identity and nationality of members of the supervisory board; • the identity and nationality of those who have the power to appoint or dismiss directors; • the identity and nationality of those who make critical decisions on the airline management; and • the identity and nationality of those who possess veto rights, and can, therefore, block decisions from being taken. In line with this, in the United States and Canada, for instance, an ‘actual control test’ has been developed and applied variously and heterogeneously by domestic courts and NAAs.88

5.4.2 Licensing The licensing of airlines represents a central element in understanding how international air services are conducted. Licensing has a twofold structure, comprising: • International element • Domestic element On the one hand, in order for airlines to perform international air services, they must obtain a license from the competent authorities of the designating State. On the other hand, domestic licensing regulations subject the issuance of an operating license to the fulfilment of various legal requirements, such as compliance with safety, insurance, environmental and financial conditions. The international element of licensing is intrinsically intertwined with the concept of designation, which will be analysed in further detail in Section 5.4.3, as a State Party to an

87 Regulation (EU) No. 1008/2008, Art. 2(9). 88 See, for instance, US Department of Transportation, In the Matter of the Citizenship of DHL Airways, Inc., DOT Order 2004–5–10. Docket No. OST-2002–13089 (2004); Canadian National Transportation Agency, Sunwings Airlines Inc., Decision No. 10-A-2010, 13 January 2010; Government of India, Director General of Civil Authority, Guidelines for Foreign Direct Investments in the Civil Aviation Services, File No. AV.14027/1/2003-AT(I) (October 2013).

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INTERNATIONAL AIR TRANSPORT ASA will, with all probability, designate an airline which it has itself licensed. This is the case mainly for two reasons: • the airline holds a valid AOC issued by the NAA of that State; and • the State has monitored that that airline meets all necessary requirements. Moreover, conditions necessary for the issuance of a license are technically specified in Annex 6 to the Chicago Convention 1944 and must be implemented in national laws.89

Did You Know? Article 33 of the Chicago Convention 1944 promotes a mechanism for mutual international recognition of operating licenses. Accordingly, contracting States shall recognise as valid AOCs issued by another contracting States, provided that the requirements under which the certificate was issued are at least equal to the applicable standards specified in Annex 6.90 In practice, similar clauses have also been encompassed in ASAs so as to facilitate mutual recognition of AOCs between States and provide uniformity in the field of airline licensing.91

However, licensing is prevalently a matter of national law. The requirements laid out in Annex 6 are contained in national licensing regulations, which also include conditions relating to the compliance with safety standards, insurance requirements and ownership cap.92

5.4.3  Designation of Airlines A State Party to an ASA can designate one or more carriers, which satisfy the designation requirements established in the applicable ASA prescribed in terms of ownership and control.93 However, in the event that a State Party to the ASA does not deem the designated carrier to comply with the designation requirements of being actually owned and controlled by nationals of the counterparty, it may deny, revoke, suspend, limit or impose conditions on the operating authorisation or technical permission to that carrier.94 As noted, prerequisites for designation also require airlines to comply with, among other regulations, ICAO safety and security standards, environmental regulations and domestic labour regulations. 89 See, Standard 4.2.1.3 of Annex 6 to the Chicago Convention 1944. 90 See, Chicago Convention 1944, Art. 33. 91 See also, Mendes de Leon, Introduction to Air Law (2017), at 47. 92 See, Section 1.3. 93 Stephan Hobe, Nikolai von Ruckteshell and David Heffernan, Cologne Compendium on Air Law in Europe (Carl Heymanns Verlag, 2013), at 481. 94 For example, when Canada designates Air Canada to provide service under its air services agreements with the United States, the United States requires that Air Canada is owned and controlled by Canadian nationals. See, Havel and Sanchez, The Principles and Practices of International Aviation Law (2014), at 100–101.

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INTERNATIONAL AIR TRANSPORT Market access is granted through the mechanism of designation. Designation is both a political and legal act, which is usually taken through diplomatic channels, by way of note verbale or, in some instances, directly by the aviation authorities of States (generally, NAAs). By way of designation, indeed, the beneficiaries of the traffic rights contained in an ASA, that is, the air carriers, become legally entitled to operate the air services listed therein. Depending on the conservative or liberal nature of the air services agreement, States can opt for: • single designation (one designated airline for each State) • dual designation (two designated airlines for each State) • multiple designations (unlimited designations for each State) Multiple designations is the instrument adopted in the vast majority of ‘Open Skies’ ASAs.

5.5 Airline Commercial Cooperation and Alliances 5.5.1 Rationale for Airline Cooperation The existing constraints concerning foreign investment in airlines and nationality requirements have constituted a significant limitation for air carriers. As a result of these constraints, airlines are de facto prevented from creating truly global networks and attracting foreign capital in order to assist with financial difficulties and remain competitive. Against this backdrop, airlines have started looking at alternative commercial solutions so as to circumvent the above-­mentioned restrictions.95 Consequently, commercial synergies have given rise to various technical and commercial agreements between air carriers, aiming at coordinating crucial components of air services operation. Commercial agreements, such as code-­sharing agreements, allow, for instance, airlines to offer flights beyond the territory of the home States of its partner carriers, even when these kinds of fifth freedom flights are not directly envisaged in their bilateral ASAs.

5.5.2 Interlining Interlining is a commercial agreement between two airlines through which airline A is allowed to market and sell a service operated by airline B. Such an agreement allows passengers to benefit, for example, from a single reservation and single check-­in operations.96 By virtue of an interline agreement, therefore, the British carrier, British Airways is entitled to sell a segment Sydney–Auckland operated by the Australian carrier Qantas. 95 See, among others, Lelieur, Law and Policy of Substantial Ownership and Effective Control of Airlines (2004), at 8. 96 The IATA interline is defined as: travel or potential travel involving multiple airlines on a single ticket, bought in a single transaction, using a single currency, which offers a passenger through-checked baggage, and a high degree of flexibility as to choice of timing, routing and carrier.

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INTERNATIONAL AIR TRANSPORT Importantly, unlike code-­sharing, airline A is not entitled to place its designator code on the flight operated by airline B. Hence, a net distinction between the two airlines remains. This is further underlined by the fact that while code-­share agreements are usually reciprocal – both airlines put their codes on air services operated by their partner – interlining may be ‘unidirectional’ as airline B may not be granted specular rights. It enables tickets to be provided for a journey partly on the competitor’s services and partly on services operated by the parties, and also enables a flexible ticket for travel on a competitor’s services to be used for travel on the parties’ services, and vice versa, subject to payment of any price difference and reasonable formalities.97 Finally, it should be observed that the practice of interlining, which seems now to have been significantly replaced by code-­share agreements, has a serious impact on the coordination of computer reservation systems, which may itself cause competition concerns.98

5.5.3  Code-­Sharing Code-­sharing can be defined as an agreement between two or more airlines according to which either their combined designator codes or the code of one of the airlines are used on a route flown by one of these airlines.99 Furthermore, ICAO has defined the notion of code-­ sharing as: the use of the flight designator code of one air carrier on a service performed by a second air carrier, which service is usually also identified (and may be required to be identified) as a service of, and being performed by, the second air carrier.100 In other words, through a code-­share agreement, airlines are able to market and sell air services under their own name and brand, even though being actually operated by their partners.101 The carrier selling and marketing the service is the ‘contractual or marketing carrier’, whereas the airline that actually operates with its ‘metal’, the service in question is defined as the ‘actual or operating carrier’. Such distinction is relevant, for example, with respect to liability and passenger rights.102 Hence, such mechanism allows air carriers to connect traffic to and from foreign points, to which they do not fly themselves, with their own flights, creating, thus, the commercial impression of a larger operational network.103

 97 John Balfour, ‘EC Competition Law and Airline Alliances’, 10 Journal of Air Transport Management 1 (2004), at 84.  98 See, for instance, Sveinn V. Gudmundsson, ‘Airline Alliances: Consumer and Policy Issues’, European Business Journal (1999), at 139–141.  99 See, Henry A. Wassenbergh, Principles and Practices in Air Transport Regulation (Institute of Air Transport 1993), at 165–169. See also, Petrus P.C. Haanappel, ‘Competition between Network, Feeder and Low-Cost Airlines’, 53 ZLW 2 (2004), at 532–534. 100 See, ICAO, ‘Implications of Airline Codesharing’, Circular No. 269-AT/110. 101 Henry A. Wassenbergh, ‘De-Regulation of Competition in International Air Transport’, 21 Air & Space Law 2 (1996), at 82–83. 102 See, Chapter 7. Montreal Convention 1999, Art. 39. 103 Havel and Sanchez, The Principles and Practices of International Aviation Law (2014), at 153.

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Did You Know? Airlines are universally identified through the so-­called IATA designator code, a two alphanumeric code assigned by the IATA. Designator codes are used to identify airlines for commercial purposes, such as ticketing, timetable, air waybills, radio communication. The sharing of IATA designator codes is the main technical feature of code-­share agreements. As an example, the German carrier Lufthansa (LH) can market and sell an air service operated by its Canadian partner Air Canada (AC), originally identified as AC123, as if it was its own LH5421 service. A list of major airlines’ designator codes include:

 Air France (AF )  Singapore Airlines (SQ)  Qantas (QF )  British Airways (BA)  Qatar Airways (QR)  Ethiopian Airlines (ET)  Iberia (IB)  United Airlines (UA)  Aeroflot (SU)  Air India (AI)  Korean Air (KE) IATA designator codes, which, as noted, relate to commercial activities, shall not be confused with the three-­letter codes that the ICAO assigns to any operator, aeronautical agency, airport in accordance with the ICAO Doc. 8585, containing ‘Designators for Aircraft Operating Agencies, Aeronautical Authorities and Services’.104

Code-­sharing is the most common type of commercial agreement in the airline sector and is believed to form the necessary basis for the creation of international alliances. From a legal perspective, however, it raises various intriguing issues not only with regard to competition,105 but also in terms of transparency, liability as well as international relations. With respect to transparency, for instance, both the EU and the United States have implemented specific policies so that the nature of code-­shared flights shall be made clear to 104 ICAO Doc. 8585, Designators for Aircraft Operating Agencies, Aeronautical Authorities and Services (2009). 105 See, Chapter 9.

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INTERNATIONAL AIR TRANSPORT the customer, at any time during his/her booking process.106 Furthermore, code-­sharing has a significant impact on aviation relations as well, as most States require the airline placing its designator code on a partner’s service to possess an air service agreement encompassing such rights with the State of final destination.

5.5.4  Global Alliances  The last thirty years of international air transport has been significantly characterised by the emergence of global alliances. Currently, the three major alliances account for more than 60 per cent of global airline capacity.107 • Star Alliance: • Established: 1997 • Partner Airlines: 27 • Destinations (Airports Served): 1,269 • Oneworld: • Established: 1999 • Partner Airlines: 13 • Destinations (Airports Served): 880 • SkyTeam: • Established: 2000 • Partner Airlines: 19 • Destinations (Airports Served): 1,074 To provide a clear definition of airline alliances is not an easy task, as the way airlines cooperate rapidly evolves. Global alliances are usually identified as major agreements in which many partner airlines coordinate commercial and strategic efforts to provide customers a plethora of benefits, such as joint check-­in and ticketing operations, joint frequent flyer programmes, better connections, co-­branded airport lounges and, in general, a seamless travel experience. In this context, airlines may also provide joint marketing operations and unique commercial agreements with credit institutions, as well as with hotels and rental car companies. The variations in types of alliances are significant. Alliances can range from common 106 See, EU Commission, Code Sharing: A Study into the Consequences for the Internal European Air Transport Market, Directorate General for Transport (1996); EU Commission, An Aviation Strategy for Europe (2015); USC § 41308 and 41309. See also, Jan E.C. De Groot, ‘Code-Sharing: United States: Policies and the Lessons for Europe’, 19 Air & Space Law 2 (1994), at 64. 107 IATA, The Future of Airline Distribution, 2016–2021, report published by Atmosphere Research Group (ARG), at 30. See also, among others, Robert Doganis, The Airline Business in the 21st Century (Routledge, 2006), at 77–81.

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INTERNATIONAL AIR TRANSPORT interests or coordination of frequent flyer programmes to coordination of marketing and revenue sharing.108 As to their legal structure, Havel has notably identified alliances as “mergers without a transfer of ownership rights”.109 Airline mergers, however, involve a partial or complete transfer of ownership rights. Mergers involving acquisitions of majority or complete control raise particular and compelling issues from a competition perspective and are generally approved provided that they generate efficiency and benefits to consumers.110 Examples of significant domestic and international airline mergers include:111 • Air Canada/Canadian Airlines (2000) • Air France/KLM (2004) • Delta/Northwest (2008) • Lufthansa/Swiss – Austrian Airlines – Brussels Airlines (2009) • British Airways/Iberia (2011) • LAN/TAM (2011) • Etihad/Alitalia (2014) • Qatar Airways/Air Italy (2018) The gradual liberalisation of international air transport services has facilitated the creation of a particular type of alliance that goes under the name of ‘metal neutral joint-­ventures’ or ‘metal neutral alliances’,112 whereby the degree of integration and the coordination of certain elements, such as revenue sharing, pricing and capacity, determine a complete ‘neutrality’ with regard to which carrier, within the alliance, the passenger is actually flying with. Notable examples of ‘metal neutral joint-­ventures’ are the transatlantic alliances, which have been granted an Antitrust Immunity from the United States DOT.113

Did You Know? The first significant case of international airline alliance dates back to 1992 whereby the Dutch carrier KLM acquired a considerable, yet allowed, percentage of voting shares in the now-­defunct United States carrier Northwest Airlines. This 108 Russel Miller, ‘International Airline Alliances: A Review of Competition Law Aspects’, 23 Air & Space Law 3 (1998), at 126. 109 Havel and Sanchez, The Principles and Practices of International Aviation Law (2014), at 148. 110 See, Chapter 10. 111 See, for instance, Kate Markhvida, ‘Antitrust and Competition Law’, in Paul S. Dempsey and Ram S. Jakhu (eds), Routledge Handbook of Public Aviation Law (Routledge, 2017), at 314–316. 112 See, Paul S. Dempsey, ‘Regulatory Schizophrenia: Mergers, Alliances, Metal Neutral Joint Ventures and the Emergence of a Global Aviation Cartel’, 83 Journal of Air Law & Commerce 3 (2018), at 37–39. 113 See, Chapter 10.

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‘merger’ not only raised nationality questions but also antitrust and competition concerns.114 The KLM/Northwest alliance is considered a pioneer not only in the field of airline alliances, being the predecessor of the current SkyTeam alliance, but also in the field of international (aero)political relations, as the cooperation was implemented at the same time as the first Open Skies Agreement (Netherlands–United States) was concluded in 1992.

Global airline alliances have attracted the increasing attention of aviation regulators and competition authorities, as coordination of elements, such as pricing, capacity, frequency and slots may result in the rising of anti-­competitive agreements. As a result, collaboration between EU and United States competitors has often been subject to investigation by the EU Commission and the United States DOT.

Recommended Literature Petrus P.C. Haanappel, Pricing and Capacity Determination in International Air Transport: A Legal Analysis (Kluwer Law International, 1984). Brian F. Havel, Beyond Open Skies: A New Regime for International Aviation (Kluwer Law International, 2009). Bin Cheng, The Law of International Air Transport (Oceania, 1962). Paul S. Dempsey, Public International Air Law (McGill University Institute and Centre for Research in Air and Space Law, 2008). Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017). Henry A. Wassenbergh, Principles and Practices in Air Transport Regulation (Martinus Nijhoff Publishers, 1993).

Points for Further Research • Understand the practical evolution of the freedoms of the air and the network development of international air carriers. • Identify the main differences between ASAs of the Open Skies type and Bermuda I and II ASAs. • Build awareness around airline cooperation, with particular regard to code-­sharing operation. • Become familiar with the criteria enshrined in Article 9 of the Chicago Convention 1944 that entitles a contracting State to prohibit and restrict their airspace. • Gain familiarity with the different terminology surrounding the use of unmanned aircraft systems. 114 See, Pablo Mendes de Leon, ‘Airline as Allies: How to Manage the Market?’, in Jan Walulik (ed.), Harmonising Regulatory and Antitrust Regimes for International Air Transport (Routledge, 2018), at 24.

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Chapter 6

Criminal Aviation Law

LEARNING OBJECTIVES  Identify each international criminal aviation convention.  Understand the need for international criminal aviation conventions.  See the different approaches to criminalising certain acts.  Understand the core themes in the conventions.  Appreciate the strengths and weakness of each convention.

6.1 Introduction In the early days of international civil aviation, the international community had little interest in regulating undesired acts committed on board of aircraft. However, the second half of the twentieth century saw a series of high-­profile incidents where perpetrators evaded punishment due to an ‘oases of lawlessness’1 during flights. As a result, States sought legal reform.

1 Chia-Jui Cheng (ed.), Studies in International Air Law: Collected Work of Cheng Bin (Brill-Nijhoff, 2017), at 371–385.

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United States v. Cordova, 89 F. Supp. 298 E.D.N.Y. (1950). On 2 August 1948, a Flying Tigers aircraft took off from San Juan, Puerto Rico and was bound for New York, United States. While over the Atlantic Ocean, the aircraft became tail heavy, which caused the aircraft to increase in altitude, requiring the pilot to intervene. The shift in weight was caused by a fight between Mr Cordova and Mr Santano over a missing bottle of rum. The cabin crew notified the pilot that there was a fight in the passenger compartment. The pilot tried to stop the fight, but Mr Cordova bit the pilot on the shoulder, hit Mr Santano and hit a member of the cabin crew. The aircraft landed at LaGuardia Airport in the United States, where both Mr Cordova and Mr Santano were immediately apprehended and charged with assault. As the event took place over the high seas, the relevant United States rules on admiralty and maritime jurisdiction were placed on the indictment. The rules pertain to offences taking place on board of ‘vessels’ or when committed on the ‘high seas’. It was found by the Court that an aircraft is not a ‘vessel’ nor could the ‘high seas’ include the airspace. As a result, although the court found there was an assault, it could not establish jurisdiction.

The corpus of law prohibiting certain behaviour, sometimes referred to as ‘criminal’ or ‘security’ aviation law, does not exist in one document and can instead be found in a number of sources. These include, among others: • International Law: • Annexes 92 and 17 to the Convention on International Civil Aviation (Chicago Convention 1944).3 • Specialised criminal treaties, such as the Convention on Cybercrime.4 • Extradition and mutual assistance treaties. • Air Service Agreements (ASAs).5 • Treaties aided by the International Civil Aviation Organization (ICAO), such as those discussed in this chapter.6 2 Annex 9 to the Chicago Convention 1944, Facilitation, 15th edn (October 2017). 3 Annex 17 to the Chicago Convention 1944, Security: Safeguarding International Civil Aviation Against Acts of Unlawful Interference, 10th edn (April 2017). It should be noted that other Annexes are relevant, such as Annex 2, 6, 10, 11, 13, 14 and 18. See, Ludwig Weber, ‘Aviation Security’, in Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law (Kluwer Law International, 2011), at 296–297. Convention on International Civil Aviation, 7 December 1944, 61 Stat. 1180; 15 UNTS 295. 4 Convention on Cybercrime, European Treaty Series – No. 185 23.XI.2001 (2001). 5 See, Chapter 5. 6 See, Convention on the Marking of Plastic Explosives for the Purpose of Detection, 30 ILM 721 (1991); Edmund Faller, ‘Aviation Security: The Role of ICAO in Safeguarding International Civil Aviation against Acts of Unlawful Interference’, 17 Annals of Air and Space Law (1992), at 369–381; Commonwealth Secretariat, ‘Implementation Kits for the International Counter-Terrorism Conventions’, www.unodc.org/pdf/crime/terrorism/, at Chapter 11.

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CRIMINAL AVIATION LAW • Regional Law: • European Convention on the Suppression of Terrorism, Strasbourg, (27 January 1977).7 • Regulation (EC) No. 300/2008 on common rules in the field of civil aviation security and resulting Regulations.8 • Domestic law: • General criminal law. • Aviation law.9 • Non-­Binding Documents: • Bonn Declaration on International Terrorism (1978).10 The term ‘security’ is not mentioned in the Chicago Convention 1944 nor does it provide ICAO with treaty making powers. Despite this, ICAO has been active in the preparation of international aviation law instruments before they are submitted to diplomatic conference for the adoption by States.11 This chapter will focus on this lex specialis international aviation law treaties, as shown later in this chapter, dealing with criminal acts that were created under the auspices of ICAO.

6.2  Background and Prohibited Acts Three approaches are utilised in the conventions to criminalise certain acts by natural persons. • Provide that domestic criminal law is applicable on board of aircraft (e.g. Tokyo Convention 1963). • Make one specific act an offence under the convention (e.g. The Hague Convention 1970).   7 European Convention on the Suppression of Terrorism, Strasbourg (27 January 1977).   8 Regulation (EC) No 300/2008 of the European Parliament and of the Council of 11 March 2008 on Common Rules in the Field of Civil Aviation Security and Repealing Regulation (EC) No 2320/2002, OJ L 97, 9 April 2008, at 72–84. See, European Commission, ‘Aviation Security’, www.ec.europa.eu/ transport/modes/air/security_en.   9 See, ICAO, Assembly Resolutions in Force (as of 8 October 2004), Doc. 9848, at A33–4: Adoption of National Legislation on Certain Offences Committed on Board Civil Aircraft (Unruly/Disruptive Passengers). 10 Bonn Declaration on International Terrorism (1978) 17:5 I.L.M. 1285 reproduced from the United States Weekly Compilation of Presidential Documents, Vol. 14, No. 29 (1978), at 1308–1309; James Busuttil, ‘The Bonn Declaration on International Terrorism: A Non-Binding International Agreement on Aircraft Hijacking’, 31 The International and Comparative Law Quarterly 3 (1982), at 474–487. 11 Ludwig Weber, ‘International Organizations’, in Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law: Selected Issues (Kluwer Law International, 2011), at 94.

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CRIMINAL AVIATION LAW • Create an exhaustive list of offences under the convention (e.g. Montreal Convention 1971 and Beijing Convention 2010). For the latter two, it is then for States to make such acts criminal offences in domestic law and to make such offences punishable by ‘severe penalties’.12 Convention on Offences and Certain Other Acts Committed on Board Aircraft 1963 (Tokyo Convention 1963) as amended by Protocol to Amend the Convention on Offences and Certain Other Acts Committed on Board Aircraft 2014 (Montreal Protocol 2014) Convention for the Suppression of Unlawful Seizure of Aircraft 1970 (The Hague Convention 1970) as amended by Protocol Supplementary to the Convention for the Suppression of Unlawful Seizure of Aircraft 2010 (Beijing Protocol 2010) Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation 1971 (Montreal Convention 1971) as amended by Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation 1988 (Montreal Protocol 1988) Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation 2010 (Beijing Convention 2010)

6.2.1 Tokyo Convention 1963 As demonstrated in the case of United States v. Cordova, acts of violence or unauthorised interference could go unpunished due to a lack of jurisdiction during international flights. As a result, during its ninth Session on 25 August to 12 September 1953, the ICAO Legal Committee officially established a subcommittee on The Legal Status of Aircraft to define the: • scope of jurisdiction when an aircraft is over a foreign State or the above the high seas; • rights and obligations of the aircraft commander in regards to the offences committed on board of an aircraft; and • rights and obligations of the relevant authorities in dealing with the people alleged to have committed an offence envisaged in the Tokyo Convention 1963. 12 See, Hague Convention 1970, Art. 2; Montreal Convention 1971, Art. 3; Beijing Convention 2010, Art. 3; Beijing Protocol 2010, Art. III. None of the Conventions provide clarification as to what constitutes severe penalties, so this is to be determined under domestic law. The principle of aut dedere aut judicare (‘either extradite or prosecute’), as found in public international law, also plays a role.

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CRIMINAL AVIATION LAW A draft Convention was prepared in 1962, finalised and adopted by the Diplomatic Conference convened in Tokyo by the ICAO Council on 20 August to 14 September 1963. This resulted in the Convention on Offences and Certain Other Acts Committed on Board Aircraft.13

Treaty Information Title of Treaty: Convention on Offences and Certain Other Acts Committed on Board Aircraft Short Title: Tokyo Convention 1963 Date of Adoption: 14 September 1963 Citation: 704 UNTS 219; 20 UST 2941; 2 ILM 1042 Entry into Force: 4 December 1969 Legal Status: 186 State Parties

The offences and acts that are regulated by the Tokyo Convention 1963 are specified in Article 1(1). This Convention shall apply in respect of: (a) offences against penal law; (b) acts which, whether or not they are offences, may or do jeopardize the safety of the aircraft or of persons or property therein or which jeopardize good order and discipline on board. Article 1(1)(a) does not specify prohibited conduct, rather it provides the contracting State with high levels of autonomy and flexibility by referring to domestic penal law to determine what constitutes an offence.

Definitions Penal: “Of, relating to, or being a penalty or punishment, esp. for a crime.”14 Penal Law/Code: “A compilation of criminal laws, usu. defining and categorizing the offences and setting forth their respective punishments. – Also termed criminal code.”15

13 See, for a detailed historical overview of the criminal conventions, ICAO, ‘Legal Instruments Related to Aviation Security’, www.icao.int/secretariat/PostalHistory/legal_instruments_related_ to_aviation_security.htm. 14 Bryan Garner (ed.), Black’s Law Dictionary, 8th edn (Thomson West, 1999), at 1168. 15 Ibid.

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CRIMINAL AVIATION LAW This formulation was a compromise as States could not agree on a list of offences due to the numerous differences between States’ domestic law. As a result, the scope of the Tokyo Convention 1963 is extremely fragmented due to the differences found between each States’ domestic law. Article 1(1)(b) makes it an offence for a person to ‘jeopardise safety’, ‘good order’ and ‘discipline’ on board an aircraft even when this is not prescribed as an offence under the State’s domestic law. This has an objective element where the acts ‘do’, but also a subjective element where the acts ‘may’ jeopardise the safety, good order and discipline on board. The latter then only requires the act to be a perceived jeopardy. As the Tokyo Convention 1963 does not provide an exhaustive list of definitions, such as for the terms ‘jeopardise’, ‘safety’, ‘good order’ and ‘discipline’, their meaning is to be determined by the domestic law of the contracting States.16 Article 11 introduces the term ‘unlawful seizure’ as an afterthought. However, it does not establish it as an offence, rather it dictates the steps that contracting States should take in cases of such an event. Notably, they: shall take all appropriate measures to restore control of the aircraft to its lawful commander or to preserve his control of the aircraft  [and]  permit its passengers and crew to continue their journey as soon as practicable, and shall return the aircraft and its cargo to the persons lawfully entitled to possession. The obligations provided to the contracting States are based on allowing the air service to continue operating as designed, rather than making it an offence. As a result, making unlawful seizure a specified offence would need to be addressed in another convention.

6.2.2 Hague Convention 1970 The Tokyo Convention 1963 marked the first international effort to combat threats against international civil aviation. However, it failed to fully address the issue of unlawful seizure, or what is more commonly referred to as ‘hijacking’, which saw a big increase in the 1960s and 1970s. Early examples were focused around, but not limited to, the Middle East and the Caribbean, but as the 9/11 attacks show, no part of the world is immune.17 As the number of hijackings rose through 1968 to 1970, an extraordinary Assembly of the ICAO Assembly was held in Montreal on 16–30 June 1970 to discuss aviation security. The seventeenth 16 Alona Evans, ‘Aircraft Hijacking: Its Cause and Cure’, 63 American Journal of International Law 4 (1969), at 708. 17 Hijacking has been linked to piracy. See, Alec Samuels, ‘The Legal Problems: An Introduction’, 37 Journal of Air Law and Commerce (1971), at 164. See, for a brief history, Alona Evans, ‘A Proposed Method of Control’, 37 Journal of Air Law and Commerce (1971), at 171–175. See, for a detailed description of The Hague Convention 1970, Abraham Abramovsky, ‘Multilateral Conventions for the Suppression of Unlawful Seizure and Interference with Aircraft Part I: The Hague Convention’, 13 Columbia Journal of Transnational Law (1974), at 381–405.

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CRIMINAL AVIATION LAW extraordinary Assembly of the ICAO Assembly produced a number of Resolutions and eventually led to the adoption of Annex 17 to the Chicago Convention 1944 on security. Despite this, further legal action was required, so on 1–16 December 1970, seventy-­seven States and twelve international organisations met in The Hague for a Diplomatic Conference. The result was the Convention for the Suppression of Unlawful Seizure of Aircraft.18

Treaty Information Title of Treaty: Convention for the Suppression of Unlawful Seizure of Aircraft Short Title: The Hague Convention 1970/Hijacking Convention 1970 Date of Adoption: 16 December 1970 Citation: 860 UNTS 105; 22 UST 1641; 10 ILM 133 Entry into Force: 14 October 1971 Legal Status: 185 State Parties

The Hague Convention 1970 compliments Article 11 of the Tokyo Convention 1963 as it establishes the offence of unlawful seizure in international aviation law.19 Article 1(a) of The Hague Convention 1970 establishes a specific offence that applies when a person is on board an aircraft in flight. A person that “unlawfully, by force or threat thereof, or by any other form of intimidation, seizes, or exercises control of, that aircraft, or attempts to perform any such act” shall have committed an offence under the convention. For it to be an offence, it can: • include whatever means of implementation, and • be successful or merely an attempt. As a result, it is very broad. Article 1(b) also makes it an offence to be an accomplice to someone engaging in an activity covered by Article 1(a). Despite the broad scope of the offence, it does not include acts from outside of the aircraft, nor does it cover planning or a mere threat to commit the offence.

6.2.3 Montreal Convention 1971 Two cases of sabotage made it clear that there was a need for an international convention that addresses this issue. The first was in Switzerland on 21 February 1970 where a bomb was placed in a postal package on Swissair flight SR330 flight from Zurich, Switzerland to Hong Kong via Tel Aviv, Israel. The bomb exploded while the aircraft was in flight in the Swiss airspace and killed all 47 people on board. The second was in Germany on the same 18 See, for early reactions from States, Bert Rein, ‘A Government Perspective’, 37 Journal of Air Law and Commerce (1971), at 183–193. 19 It should be noted that The Hague Convention 1970 does not use the term ‘hijacking’, rather opting for the same terminology as the Tokyo Convention 1963.

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CRIMINAL AVIATION LAW day where a bomb was placed on board an Austrian Airlines aircraft. The pilot was fortunately able to return to Frankfurt. The Popular Front for the Liberation of Palestine claimed responsibility for both assaults. As a result of these events, an International Conference on Air Law met in Montreal on 8–23 September 1971. The result was the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation.

Treaty Information Title of Treaty: Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation Short Title: Montreal Convention 1971/Sabotage Convention 1971 Date of Adoption: 23 September 1971 Citation: 974 UNTS 177; 24 UST 564; 10 ILM 1151 Entry into Force: 26 January 1973 Legal Status: 188 State Parties

Article 1(a) makes it an offence to use violence against any person on board whether this be passengers or crew members. The Montreal Convention 1971 does not define the term ‘violence’. It is likely to include physical acts, but does not necessarily require the use of a ‘weapon’20 and may also include a threat of violence. The violence must also endanger the safety of the aircraft. This can lead to certain acts of violence falling both inside or outside the scope of the Montreal Convention 1971, such as intimidation, sexual assault21 of passengers and crew,22 or drunk passengers23 as these may or may not affect the safety of the flight.24 This opens the debate as, for example, it can be posited that “such acts do not directly endanger the safety of the aircraft and, hence, do not come within the ambit of the Convention.”25 Whereas, the flight and cabin crew may be required to deviate from their normal duties to assist which may impact upon safety. Article 1(1)(b) makes it an offence to either ‘destroy’ or ‘damage’ an aircraft in a way that endangers safety. An example of this is Malaysia Airlines flight MH17, which was shot down on 17 July 2014 by a missile while flying over Ukraine, which killed 283 passengers and fifteen crew on board.26 The term ‘destroy’ can be interpreted to mean that the act puts the 20 Abramovsky, ‘Multilateral Conventions for the Suppression of Unlawful Seizure and Interference with Aircraft Part II: The Montreal Convention’ (1975), at 283. 21 Tsevas v. Delta Airlines, No. 97 C 0320. N.D. Ill. (1997). 22 Evgeny Dogaev (a.k.a. Evgeny Rotshtein) v. Czech Republic [2014] EWHC 2995. 23 R. v. Heather Susan Tagg, [2001] EWCA Crim 1230. 24 See, Vincent Correia, ‘Some Cases on Unruly Behaviour and Criminal Offences Committed on Board Aircrafts’, http://media.leidenuniv.nl/legacy/session-3---vincent-correia.pdf. 25 Abramovsky, ‘Multilateral Conventions for the Suppression of Unlawful Seizure and Interference with Aircraft Part II: The Montreal Convention’ (1975), at 285. 26 See, Pınar Ölçer, ‘The Downing of MH17: Fact-Finding and Constructing a Legal Response’, 42 Air and Space Law 2 (2017), at 137–162; Paul Freeman, Melissa Tang and Lau Chee Chong, ‘Lightning Doesn’t Strike Twice: The Tragedy and Challenges of the MH370 and MH17 Losses’, 42 Air and Space Law 4/5 (2017), at 423–442.

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CRIMINAL AVIATION LAW aircraft in a position beyond repair. The term ‘damage’ would result in an act that alters the aircraft from its prior state, such as deviating it from its approved airworthiness standard,27 but is repairable. The line between the two may be grey in certain circumstances, however, as the Montreal Convention 1971 does not distinguish between the two, this point is mostly academic. Again, such act must endanger the safety of the flight.

Did You Know? The Convention on the Marking of Plastic Explosives for the Purpose of Detection28 attempts to ensure that plastic and sheet explosives, which are often easy to conceal, can be detected prior to them being placed on board of an aircraft. This Convention was a response to the mid-­air destruction of Air India Flight 182 on 23 June 1985 while over the Atlantic and Pan Am Flight 103 on 21 December 1988 while over Lockerbie, United Kingdom.29 Both cases involved a bomb exploding while the aircraft were in flight, resulting in 329 and 270 people tragically dying respectively.

Article 1(1)(c) makes it an offence if one  places or causes to be placed on an aircraft in service, by any means whatsoever, a device or substance which is likely to destroy that aircraft, or to cause damage to it which renders it incapable of flight, or to cause damage to it which is likely to endanger its safety in flight.  This requires certain criteria to be satisfied: 1. The act can be direct or indirect. a. Direct: This can mean physically taking the device or substance on board as a passenger or crew member, or delivering it in person by placing in on board. b. Indirect: This is where the individual uses a third person to assist. This can include sending the device or substance by mail or using a cargo company for transportation. 2. The phrase “by any means whatsoever” can include the placing on board and on the outside of the aircraft. 3. The item in question must either be a ‘device’ or ‘substance’. a. Device: This refers to something that is made, such as mechanical or electronic equipment. b. Substance: This refers to matter, such as chemicals.30 27 See, for more information on airworthiness, Annex 8 to the Chicago Convention, Airworthiness of Aircraft, 11th edn (July 2010). 28 Convention on the Marking of Plastic Explosives for the Purpose of Detection, 30 ILM 721 (1991). 29 Lockerbie – Abdelbaset Ali Mohmed Al Megrahi v. Her Majesty’s Advocate, Case No: 1475/99 and Appeal No: C104/01. 30 The term ‘weapon’ was not included and was in fact rejected from the Montreal Convention 1971. ICAO, International Conference on Air Law (Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation), Doc 9081-LC/170-1 (1971).

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If the above is satisfied, then the act is an offence if it destroys or damages the aircraft making it incapable of flight, or endangers safety while in flight. The Case Concerning the Aerial Incident of 3 July 1988 (Islamic Republic of Iran v. United States of America) “This case arises from the destruction of a civilian aircraft – Iran Air Airbus A300, registration number EP-­IBU, operating as flight IR 655 between Bandar Abbas and Dubai (herein referred to as ‘IR 655’) – while flying in the Islamic Republic’s airspace and over its internal and territorial waters in the Persian Gulf and the killing of its 290 passengers and crew by two surface-­to-air missiles launched by the guided missile cruiser, Vincennes, on the morning of Sunday, 3 July 1988.” Before the Court could make a decision on the case brought by Iran, the two States reached an agreement. As a result, the International Court of Justice (ICJ) passed the case to ICAO. The case was not, prior to submission to the ICJ, dealt with by the Council of ICAO under Article 84.31

Article 1(1)(d) is the first offence not focusing on the aircraft as it makes it an offence to ‘destroy’, ‘damage’ or ‘interfere’ with air navigation facilities. The scope of the term ‘air navigation facilities’ is not stated in the Convention, however, recourse to Article 28 of the Chicago Convention 1944 shows that it may include “airports, radio services, meteorological services and other air navigation facilities to facilitate international air navigation”.32 Article 4(5) of the Montreal Convention 1971 limits the scope: In the cases contemplated in subparagraph (d) of paragraph 1 of Article 1, this Convention shall apply only if the air navigation facilities are used in international air navigation.

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As a result, this does not apply to facilities providing only domestic services. However, the exact requirements for determining this are not specified (e.g. number of international flights per week, month or year; type of licence; or past or future use of the facilities). Article 1(1)(e) makes it an offence to knowingly communicate false information that endangers the safety of an aircraft in flight. This can include bomb threats. Ryanair v. Brian Lake, 2:17-cv-­00166 (2017) In February 2016, “Hello @Ryanair, you have 15 minutes before I commit the biggest terror attack the UK has ever seen on one of your planes. Be ready” was posted on Twitter.33 The threat was vague enough to include all of Ryanair’s aircraft, so those in flight could fall under the scope of the Montreal Convention 1971. Ryanair took the threat seriously and managed to trace the tweet to Brian Lake from Pennsylvania, United States. The airline filed extortion and defamation proceedings claiming the tweet had “specific intent of harming Ryanair’s business and its reputation of providing high-­quality, reliable, low-­cost goods and services in the commercial airline industry”.34 A United States District Court judge ordered Brian Lake to pay a total of USD 284,148.

31 See, Chapter 3. 32 See, for a definition, Beijing Convention 2010, Art. 2(c). 33 Simon Calder, ‘Ryanair Wins £220,000 from Twitter User Who Posted Terror Threat’, The Independent, 14 July 2017, www.­ independent.co.uk/travel/news-and-advice/ryanair-bomb-threat-terror-twitter-brian-lake-pennsylvania-extortion-a7841446.html. 34 Ibid.

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CRIMINAL AVIATION LAW Article 1(2)(a) makes it an offence when a person ‘attempts’ to carry out any of the offences that are listed in Article 1(1). Furthermore, Article 1(2)(b) takes legal liability further and also makes it an offence to be an ‘accomplice’ to any person who either commits or attempts to commit any of the offences that are listed in Article 1(1).

6.2.4 Montreal Protocol 1988 It became apparent that the scope of offences listed in Article 1 of the Montreal Convention 1971 did not go far enough to encapsulate all acts of sabotage against different aviation stakeholders. This was highlighted by the airport bomb explosions at Frankfurt, Germany and Tokyo, Japan in June 1985, as well as the joint terrorist attacks at airports in Rome, Italy and Vienna, Austria on 27 December 1985. The cases demonstrated that the existing treaties did not cover such attacks and, as a result, an International Conference on Air Law was held in Montreal on 9–24 February 1988 to discuss this issue. The Conference resulted in Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, Supplementary to the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation.

Treaty Information Title of Treaty: Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, Supplementary to the Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation Short Title: Montreal Protocol 1988 Date of Adoption: 24 February 1988 Citation: UNTS 1990 Entry into Force: 6 August 1989 Legal Status: 175 State Parties

Pursuant to Article V of the Montreal Protocol 1988, a State may only ratify it if it is already a contracting State to the Montreal Convention 1971 or if it ratifies both instruments together. This is because the Montreal Protocol 1988 supplements the Montreal Convention 1971, as declared in Article I. Contracting States of the Montreal Convention 1971 have no obligation to ratify the Montreal Protocol 1988, so there are cases where States are only party to the prior without being a contracting State the latter. This is exemplified by the difference in total number of State Parties. Article II of the Montreal Protocol 1988 adds two new offences to the Montreal Convention 1971, which focus specifically on airports. The first offence is found in Article II(1 bis) (a), whereby a person commits an offence if that person:

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CRIMINAL AVIATION LAW unlawfully and intentionally, using any device, substance or weapon: […] performs an act of violence against a person at an airport serving international civil aviation which causes or is likely to cause serious injury or death. This has four limitations: 1. The act must be carried out by either a ‘device’, ‘substance’ or ‘weapon’. 2.

The act must be against a natural person. Therefore, it does not include property or legal persons, such as companies, as this is covered in Article II(1 bis)(b).

3. It must be at an airport serving international civil aviation.35 • The exact requirements for this are not specified, such as, how many international flights must be served per week, month, year or at any point in the airports history or future. Thus, the scope could be interpreted to be quite broad. • The victim of the act does not have to be involved in an international flight. It could include domestic passengers, airport staff,36 international passengers, third party service providers, or friends and family of passengers. 4. It must cause or likely cause serious injury or death. Neither the Montreal Convention 1971 nor the Montreal Protocol 1988 provides definitions on these terms, as a result, they are open to interpretation and will require analysis of the specific case by domestic courts. The second offence is found in Article II(1 bis)(b), whereby a person commits an offence if that person: unlawfully and intentionally, using any device, substance or weapon: […] destroys or seriously damages the facilities of an airport serving international civil aviation or aircraft not in service located thereon or disrupts the services of the airport, if such an act endangers or is likely to endanger safety at that airport. This offence links with Article 1(d) of the Montreal Convention 1971, but instead of air navigation facilities, this new offence pertains to the destruction or damage of airports and 35 Ibid. 36 See, for more information on staff as threats to security, Peter Greco, ‘Insider Threat: The Unseen Dangers Posed by Badged Airport Employees and How to Mitigate Them’, 82 Journal of Air Law and Commerce (2017), at 717–742.

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CRIMINAL AVIATION LAW certain aircraft. Again, the act must ‘endanger’ or ‘likely endanger’ safety at the airport, so acts such as minor criminal damage will unlikely fall under this offence.

6.2.5  Beijing Convention 2010 The events of 9/11 highlighted that there was an urgent requirement to strengthen the existing legal framework for international cooperation for the prevention and suppression of unlawful acts against civil aviation.37 Additionally, it showed that new and emerging threats against civil aviation are not necessarily covered by the existing conventions. Motivated by this, the International Conference on Air Law (Diplomatic Conference on Aviation Security), which was held in Beijing on 30 August–10 September 2010, concluded with the Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation.38

Treaty Information Title of Treaty: Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation Short Title: Beijing Convention 2010 Date of Adoption: 10 September 2010 Citation: N/A Entry into Force: 1 July 2018 Legal Status: 34 signatures, 17 ratifications, 11 accessions, 1 acceptance

The Beijing Convention 2010 is an attempt to modernise and consolidate the Montreal Convention 1971 and Montreal Protocol 1988 as it criminalises: “a number of acts constituting new and emerging threats against civil aviation, including certain preparatory acts for the offences” as well as strengthening “the capacity of States to prevent the commission of these offences, and to prosecute and punish those who commit such offences.”39

37 See, Ruwantissa Abeyratne, ‘The Beijing Convention of 2010: An Important Milestone in the Annals of Aviation Security’, 36 Air and Space Law 3 (2011), at 243–255. The Aviation Security Action Plan 2002, ICAO Council, 166th Session (June 2002) was agreed and created the USAP as a result of the 9/11 attacks. See also, ICAO, ‘ICAO Global Aviation Security Plan (GASeP), www. icao.int/Security/Pages/Global-Aviation-Security-Plan.aspx. 38 ICAO, Administrative Package for Ratification of or Accession to the Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation (Beijing Convention 2010), www. icao.int/secretariat/legal/Administrative%20Packages/Beijing_Convention_EN.pdf. 39 Ibid.

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Did You Know? Article 1(1)(a)–(e) of the Beijing Convention 2010 replicates Article 1(1)(a)–(e) of the Montreal Convention 1971, however, ICAO has noted that the new instrument includes new types of attacks, such as cyberattacks.40 Therefore, a distinguishing characteristic of the Beijing Convention 2010, as well as the Beijing Protocol 2010, from the previously adopted Conventions is that for they are proactive. In other words, they cover emerging threats, rather than responding to existing ones.

Article 1(1)(f )–(i) introduces new offences into the international criminal aviation legal regime. The 9/11 attacks were a deadly reminder of the vulnerabilities of aviation. As a result, it is not surprising that the first new offence in a post-­9/11 convention addresses this scenario. Article 1(1)(f ), makes it an offence to use “an aircraft in service for the purpose of causing death, serious bodily injury, or serious damage to property or the environment”.41 Thus, it criminalises any attempt to use aircraft as a weapon.

Did You Know? The new inclusion of the environment is not confined to criminal aviation law. For example, Article 1(c)(iii) of the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation42 covers this for transportation by sea.

This does not require the act to be based on terrorism and can include acts like the 2002 Tampa airplane crash, where an individual crashed a plane into a building to commit suicide. A more recent example would be Germanwings Flight 9525 where the pilot crashed the aircraft into the French Alps killing all on board. Article 1(1)(g) makes it an offence to release or discharge “from an aircraft in service any BCN weapon or explosive, radioactive, or similar substances in a manner that causes or is likely to cause death, serious bodily injury or serious damage to property or the environment”.43 This, then involves using the aircraft to facilitate the offence, rather than as the target or as a tool. Article 1(1)(h), extends this and makes it an offence to do such acts against or on board an aircraft. As the Beijing Convention 2010 breaks away from the generic term ‘weapon’ to more specific terms, such as such as ‘biological weapon’, ‘chemical weapon’ and ‘nuclear weapon’, Article 2 was required to provide definitions. However, not every new term was 40 Abeyratne, ‘The Beijing Convention of 2010: An Important Milestone in the Annals of Aviation Security’ (2011), at 249–250. 41 The inclusion of the term ‘environment’ can be seen in maritime law. Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation 27 ILM 668; 1678 UNTS 221 (1988); and Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf 1678 UNTS 304; 27 ILM 685 (1988). 42 Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation, 27 ILM 668; 1678 UNTS 221 (1988). 43 ‘BCN’ refers to biological weapons, chemical weapons and nuclear weapon.

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CRIMINAL AVIATION LAW defined. For example, ‘explosive’ is not defined nor is it found in the other Treaties. As a result, recourse to domestic law is still required. Article 1(1)(i), taking the role of an export control clause, makes it an offence if one “transports, causes to be transported, or facilitates the transport of, on board an aircraft” the items specified in the Convention. It shall, however, not be an offence for a State Party or authorised entity of that State engaging in Article 1(1)(i)(3) and (4) activities, if it is consistent with the applicable multilateral non-­proliferation treaties to which it is a party. It can then be seen that the Beijing Convention 2010 also forms part of a larger international regime, outside of aviation, with regards to export and use of weapons. This is advanced through Article 6, which links the Beijing Convention 2010 with the United Nations Charter 194544 and international humanitarian law. This link finds practical application in Article 6(2), which declares that the Beijing Convention 2010 does not apply to armed forces during armed conflict. Further, “activities undertaken by military forces of a State in the exercise of their official duties, inasmuch as they are governed by other rules of international law, are not governed by this Convention.” This is a step further from the traditional aircraft of military, customs and police services exemption as it also excludes activities of the military. Finally, the Beijing Convention 2010 does not affect the rights, obligations and responsibilities found under the treaties listed in Article 7. Article 1(2) of the Beijing Convention 2010 copies the offences found in Article II of the Montreal Protocol 1988 on acts of violence and acts directed towards the facilities of an airport. Article 1(3)(a) of the Beijing Convention 2010 provides that it is also an offence when a person makes a ‘threat’ to commit the offences in Article 1 (1)(a)–(d) and (f )–(h) and Article 1(2). Further, it is an offence under Article 1(3)(b) if one “unlawfully and intentionally causes any person to receive such a threat”. So long as the threat made “under circumstances which indicate that the threat is credible”. As a result, there is a subjective element to Article 1(3) offences. Article 1(4) provides a list of secondary offences. • ‘Attempt’ to commit an offence in Article 1(1) and (2) • ‘Organise’ or direct an offence in Article 1 (1)–(3) and (4)(a) • ‘Participate’ as an accomplice in an offence in Article 1 (1)–(3) and (4)(a) • ‘Assist’ another person that has committed an offence in Article 1 (1), (2), (3), (4)(a), (4)(b) or (4)(c) This goes much further than previous conventions at targeting secondary actors. Article 1(5) obliges a State party to make other secondary acts offences under domestic law, regardless of whether the act was committed or only attempted for group activities. Article 4 provides legal liability for persons responsible for the management or control of a legal entity that commits an offence in Article 1, thus, it lifts the corporate veil in order to locate those in charge of the act. Such liability may be criminal, civil or administrative. This 44 Charter of the United Nations, 24 October 1945, 1 UNTS XVI (1945).

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CRIMINAL AVIATION LAW is a major move away from the approach of the other treaties, which focus only on natural person’s activities.45

6.2.6  Beijing Protocol 2010 In order to combat the growing number of unlawful acts and new types of threats against civil aviation, the international community came together to discuss this issue at the International Conference on Air Law (Diplomatic Conference on Aviation Security) in Beijing on 30 August–10 September 2010. While the Beijing Convention 2010 was a new treaty, it was also felt appropriate to supplement The Hague Convention 1970 with a protocol. The result was the Protocol Supplementary to the Convention for the Suppression of Unlawful Seizure of Aircraft.46

Treaty Information Title of Treaty: Protocol Supplementary to the Convention for the Suppression of Unlawful Seizure of Aircraft Short Title: Beijing Protocol 2010 Date of Adoption: 10 September 2010 Citation: N/A Entry into Force: 1 January 2018 Legal Status: 35 signatures, 18 ratifications, 13 accessions, 1 acceptance

The Beijing Protocol 2010 amends the scope of The Hague Convention 1970 as specified in Article I with the aim of covering different forms of hijacking, including through modern technological means. The content of the Beijing Protocol 2010 is extensively salvaged from other instruments. • Article II – Article 1(1) is taken from Article 1(a) of The Hague Convention 1970. • Article II – Article 1(2)–(5) is taken from Article 1(2)–(5) of the Beijing Convention 2010. As a result, the Protocol does not add any new offences to the corpus of international criminal aviation law but does extend the list of offences found in The Hague Convention 1970. 45 See, Beijing Protocol 2010, Art. IV. 46 Administrative Package for Ratification of or Accession to the Protocol Supplementary to the Convention for the Suppression of Unlawful Seizure of Aircraft (Beijing Protocol 2010), www.icao.int/ secretariat/legal/Administrative%20Packages/Beijing_protocol_EN.pdf.

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CRIMINAL AVIATION LAW The majority of changes represent terminology or phraseology changes, rather than substantive legal ones, to reflect more modern rule-­making styles. For example, Article XVII of the Beijing Protocol 2010 acknowledges the change in terminology from ‘contracting States’ to ‘State Parties’. This is the case with other Articles. • Article III • Article V • Article VIII • Article IX • Article XI(1)–(4) • Article XIV • Article XV These changes do not appear to affect the substantive content of the affected Articles of The Hague Convention 1970.

6.2.7 Montreal Protocol 2014 The issue of unruly passengers continued to grow despite the existing legal framework. Appreciating the problem, the International Air Transport Association (IATA) collected statics to highlight this issue. • In 2015, there was one incident for every 1,205 flights. This rose to one incident for every 1,424 flights in 2016; • The majority of cases were verbal in nature and could be dealt with by trained crew; • Physical aggression or damage to aircraft constituted 12 per cent of reports; • Alcohol or drugs was noted in 33 per cent of reported cases; • The exact figures are likely to be higher.47 Due to the increase number of unruly passengers, IATA asked ICAO to review and improve the legal regime.48 The international community gathered in Montreal on 26 March–4 April 47 IATA, ‘Fact Sheet: Unruly Passengers’, www.iata.org/pressroom/facts_figures/fact_sheets/­ Documents/fact-sheet-unruly-passengers.pdf. ICAO, Progress Report on Legal Work Relating to Unruly Passengers and on the Implementation of the Beijing Convention and the Beijing Protocol, A38-WP/49 – LE/1 11/07/2013. 48 Michael Jennison, ‘The Montreal Protocol of 2014 is Intended to Modernise the Tokyo Convention of 1963: Can it Succeed?’, 39 Annals of Air and Space Law (2014), at 7. See, ICAO, Views of the International Air Transport Association (IATA) on Recommending the Formation of a Special Study Group to Examine Emerging Legal Issues Presented by Unruly/Disruptive Passengers, LC/34-WP/2–4 14/09/09.

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CRIMINAL AVIATION LAW 2014 to discuss this issue at the International Conference on Air Law to consider amending the Tokyo Convention 1963.49 The result was the Protocol to Amend the Convention on Offences and Certain Other Acts Committed on Board Aircraft.50

Treaty Information Title of Treaty: Protocol to Amend the Convention on Offences and Certain Other Acts Committed on Board Aircraft Short Title: Montreal Protocol 2014 Date of Adoption: 4 April 2014 Citation: N/A Entry into Force: Not in Force Legal Status: 32 signatures, 8 ratifications, 12 accessions

As it is a Protocol, which per Article I amends the Tokyo Convention 1963, they shall be read and interpreted together. As the two documents are intertwined, the Montreal Protocol 2014 can only be adopted by a State which is party to the Tokyo Convention 1963 per Articles XV and XVII. As the Tokyo Convention 1963 already covers unruly passengers, the Montreal Protocol 2014 does not introduce a new offence.51 However, to complement the offence, Article X – Article 15(1) bis has been included to encourage contracting States “to take such measures as may be necessary to initiate appropriate criminal, administrative or any other forms of legal proceedings” against those who have committed an act or offence specified in Article 1(1) of the Tokyo Convention 1963. Whereas the Tokyo Convention 1963 does not define any acts of offences to be included, rather leaving it to the contracting States to determine this point, Article X – Article 15(1) bis provides some guidance to this as it includes physical assault, threat to commit physical assault against a crew member and refusal to follow instruction flowing from the aircraft commander. Article X – Article 15(2) bis reiterates that State Parties are free to introduce or maintain domestic law with the aim of punishing unruly and disruptive passengers, and Article XII 49 ICAO, ‘Administrative Package for Ratification of or Accession to the Protocol to Amend the Convention on Offences and Certain other acts Committed on Board Aircraft (Montreal Protocol, 2014)’, www.icao.int/secretariat/legal/Administrative%20Packages/Montreal%20Protocol%202014_ EN.pdf. 50 See, for a discussion on whether it ‘amends’ or is an ‘addition’ to the Tokyo Convention 1963, Ruwantissa Abeyratne, ‘A Protocol to Amend the Tokyo Convention of 1963: Some Unanswered Questions’, 39 Air and Space Law 1 (2014), at 52–54. See also, ICAO, Guidance Material on Legal Aspects of Unruly/Disruptive Passengers, Cir. 288 (2002). 51 IATA, ‘Guidance on Unruly Passenger Prevention and Management’, www.iata.org/policy/ Documents/2015-Guidance-on-Unruly-Passenger-Prevention-and-Management.pdf.

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CRIMINAL AVIATION LAW – Article 17(2) acknowledges the link with international obligations. The scope of offences is consequently broader than Article 1 of the Tokyo Convention 1963.

6.3 Applicability Each convention is applicable in a certain set of circumstances, so each convention must be assessed on its own merits. Table 6.1  Applicability of the criminal aviation conventions Tokyo 1963 Political, racial or religious acts

Article 2

In flight

Article 1(2)

Hague 1970

Montreal 1988

Beijing C Beijing P 2010 2010

Montreal 2014 Article III

Article 3(1)

In service

Surface of the High Sea

Montreal 1971

Article 2(a)

Article 2(a)

Article 2(b)

Article 2(b)

Article II – Article 1(3)(a) Article V – Article 3(1)

Article 1(2)

Other area Article outside 1(2) territory of a State Non-­Military Article only 1(4)

Article 3(2)

Article 4(1)

Article 5(1)

International Element

Article 3(3)–(5)

Article 4(2)–(6)

Article 5(2)–(6)

Article V – Article 3(5)

The Protocols are often silent on applicability as these are dealt with by the foundational conventions.

6.3.1 Religious Motivation Article 2 of the Tokyo Convention 1963 provides for an exemption for acts based on political, racial and religious motivation. It may seem peculiar as the Convention discusses hijacking, which is often motivated by political means. This, however, has certain conditions:

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CRIMINAL AVIATION LAW • This does not affect the rights provided in Article 4 on jurisdiction; • This exemption does not apply when safety ‘so requires’. As this refers to acts taken in penal law, as opposed to the physical steps taken during the offence or act, there is a very limited scope where safety would be affected; • States can still take actions under domestic law;52 • It is limited to political, racial and region, so excludes nationality, ethnic or gender reasons. The Tokyo Convention 1963 does not provide definitions so, for example, the scope of ‘political offence’ may vary wildly between different contracting States.53 There is then no basis for action for offences falling under the scope this Article. Despite the rejection of this clause in later conventions, Article III of the Montreal Protocol 2014 extends the scope to include nationality, ethnic origin and gender.

6.3.2 In flight and In Service Article 1(3) of the Tokyo Convention 1963 defines the term ‘in flight’ as when: an aircraft is considered to be in flight from the moment when power is applied for the purpose of take-­off until the moment when the landing run ends. This could include from the moment the auxiliary power unit is turned on or, further on in the operation, as when the aircraft is taxiing or power is applied for take-­off. This definition was further qualified in other conventions. [A]n aircraft is considered to be in flight at any time from the moment when all its external doors are closed following embarkation until the moment when any such door is opened for disembarkation. In the case of a forced landing, the flight shall be deemed to continue until the competent authorities take over the responsibility for the aircraft and for persons and property on board.54

Did You Know? The term in flight was used for the first time in Article 1(2) of the Rome Convention 1952.55

52 Robert P. Boyle and Roy Pulsifer, ‘The Tokyo Convention on Offenses and Certain Other Acts Committed on Board Aircraft’, 30 Journal of Air Law and Commerce (1964), at 333. 53 Sami Shubber, Jurisdiction over Crimes on Board Aircraft (Springer, 1973), at 154. 54 See, Hague Convention 1970, Art. 3(a); Montreal Convention 1971, Art. 2(a); Beijing Convention 2010, Art. 2; Montreal Protocol 2014, Art. 1(3)(a). 55 Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface, 7 October 1952, 310 UNTS 181; ICAO Doc. 7364 (1952). See, Chapter 8.

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CRIMINAL AVIATION LAW The Montreal Convention 1971 adopts the new term ‘in service’. This is also found in the two Beijing documents. [A]n aircraft is considered to be in service from the beginning of the preflight preparation of the aircraft by ground personnel or by the crew for a specific flight until twenty-­four hours after any landing; the period of service shall, in any event, extend for the entire period during which the aircraft is in flight as defined in paragraph (a) of this Article. This term covers a longer duration of time than the term ‘in flight’ as it also covers times when the aircraft is on the ground during pre-­flight and cases where the aircraft has to stop overnight at an airport. This is an important inclusion as the Montreal Convention 1971 tries to protect passengers, crew and the aircraft from all cases of sabotage. This incorporates scheduled, intended and forced landings.

6.3.3  Surface of the High Sea and other Areas Outside Territory of a State As one of the raisons d’être for the Tokyo Convention 1963 is to establish jurisdiction to offences and acts committed on board of an aircraft outside the territory of a State Party, the inclusion of this term allows for global coverage.

Definitions High Seas: This has been defined in international law to mean “all parts of the sea that are not included in the territorial sea or in the internal waters of a State.”56 This is because it covers all areas outside the geographical scope of Article 2 of the Chicago Convention 1944 where an aircraft can fly.57

6.3.4 Non-­Military The international criminal aviation conventions explicitly state that they are not applicable to ‘aircraft used in military, customs or police services’. The wording is taken from Article 3(2) of the Chicago Convention 1944, which lists the same three categories of aircraft. The Conventions do not make any reference to division between civil aircraft and State aircraft, whereas this is done in the Chicago Convention 1944. This omission of State aircraft and civil aircraft is deliberate to allow flexibility.58 For example, a State-­registered aircraft conducting civil activities would probably fall within the scope of the Tokyo Convention 1963. 56 Convention on the High Seas, 13 UST 2312; 450 UNTS 11 (1958), Art. 1. 57 See, Section 3.2.1. 58 “This difference in terminology is explained by the fact that State aircraft provide air transport that is usually provided by civil aircraft and civil transport in some cases”. Abeyratne, Aviation Security Law (2010), at 220.

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CRIMINAL AVIATION LAW Thus, providing the crew with the same rights and obligations to protect civil passengers as if it were on a civil registered aircraft. The use, as opposed to registration or ownership, of the aircraft is the method to determine the status.59

6.3.5 International Element As the Conventions were created under the auspices of ICAO, whose competencies stem from the Chicago Convention 1944 on international civil aviation, it would be expected that each of the criminal conventions would cover only international flights. However, the Tokyo Convention 1963 does not make any reference to international flights. This is, however, not the case for Article 4(2) of the Montreal Convention 1971 and Article 5(2) of the Beijing Convention 2010 which both declare that: this Convention shall apply irrespective of whether the aircraft is engaged in an international or domestic flight, only if: (a) the place of take-­off or landing, actual or intended, of the aircraft is situated outside the territory of the State of registry of that aircraft; or (b) the offence is committed in the territory of a State other than the State of registry of the aircraft. The Hague Convention 1970 Article 3(3) declares that: This Convention shall apply only if the place of take-­off or the place of actual landing of the aircraft on board which the offence is committed is situated outside the territory of the State of registration of that aircraft; it shall be immaterial whether the aircraft is engaged in an international or domestic flight. As a result, not every flight will fall under the scope of the respective convention, so attention must be given to the specific route taken by the aircraft.

6.4 Jurisdiction Jurisdiction is the capacity of a State to prescribe and enforce the law, as well as to make a legally binding decision that affects the parties involved in the case. State jurisdiction may extend beyond its territory over persons and things.

59 Boyle and Pulsifer, ‘The Tokyo Convention on Offenses and Certain Other Acts Committed on Board Aircraft’ (1964), at 332–333.

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Did You Know? There are four main types of jurisdiction in international law: 1. Territoriality:

 Subjective: A State has power to exercise jurisdiction within its territory.



 Objective: A State has jurisdiction of extraterritorial conduct when it has an injurious effect in territory.

2. Nationality:

 Active Personality: A State may exercise jurisdiction over its nationals and their conduct even when they are outside of its territory.



 Passive Personality: A State may exercise jurisdiction over acts committed by a non-­national in which the victim is a national of that State.

3. Protective Principle: A State may exercise jurisdiction over acts that threaten that State’s security. 4. University Principle: A State may exercise jurisdiction over acts that are so severe that it is in the interest of the international community that all States should be able to seize jurisdiction.

Aviation often involves crossing international borders and a variety of stakeholders from different States. As a result, establishing jurisdiction is not always straightforward. The problem can be highlighted by the case study below. • The aircraft is registered in State A • The aircraft is operated by an airline of State B • The place of departure is located in State C • The scheduled place of arrival is located in State D • The aircraft is diverted to State E • The offender is a national of State F • The victim is a national of State G • The location of the incident was over the high seas As a result, there are numerous potential States with jurisdiction, or in fact none due to the inclusion of the high seas which is not part of the territory of any State. In order to establish jurisdiction, each of the conventions contain provisions that address jurisdiction. These can be broken down into the following, basic headings:

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CRIMINAL AVIATION LAW Table 6.2  Jurisdiction under the criminal aviation conventions Tokyo 1963 Articles 3–4

Hague 1970 Article 4

Montreal 1971 Article 5

State of registration





Criminal jurisdiction found in domestic law



Montreal 1988 Article III

Beijing C 2010 Article 8

Beijing P 2010 Article VII

Montreal 2014 Article IV



















State of landing











State of lessee on dry lease











State where alleged offender is present and is not extradited











State where the offence  has effect on the territory State of alleged offender







State of victim







State where offence is against its security



State where offence consists a breach of law on the flight or manoeuvre of aircraft











 State where it is necessary to ensure the observance of a treaty State where offence happened State where a stateless alleged offender has their habitual residence



It was the drafters’ desire to ensure that at least one contracting State has jurisdiction, so the conventions facilitates this enormously. This scope of inclusion has been enhanced by appreciation of commercial agreements, notably through lease agreements.

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Definitions Dry lease: This is “where the aircraft is made available for use to the lessee, without crew, maintenance and insurance. The dry lessee is to provide its own crew and the lease agreement contains precise lessee undertakings regarding maintenance and insurance of the aircraft.” Wet lease: This is “where the lessor provides the aircraft including crew, maintenance and insurance.” In cases of a wet lease, the State of registration will continue to have jurisdiction.60 Difficulties may arise when: • more than one State attempts to assert its jurisdiction, • no State wants to assert its jurisdiction, • no State has jurisdiction, or • the place where the offence was committed cannot be determined.61 As a result, the system is not complete and issue may still arise. States may be required to cooperate to resolve such a difficulty, however, this does not guarantee a solution as politics may exist between the States.

6.5 Obligations of Contracting States The Conventions provide a number of procedural obligations on each State Party. Table 6.3  Obligations of contracting States under the Criminal Aviation Conventions Obligation Article

Tokyo 1963

Disembarkation of alleged offender

12

Hague 1970

Montreal 1971

Montreal 1988

Beijing C Beijing P 2010 2010

VIII

Take delivery of 13(1) alleged offender Take into 13(2) custody the alleged offender

6(1)

6(1)

60 See, Section 3.6. 61 Mendes de Leon, Introduction to Air Law (2017), at 492.

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Montreal 2014

9(1)

CRIMINAL AVIATION LAW Obligation Article

Tokyo 1963

Hague 1970

Montreal 1971

Notify other States

13(3) & (5)

6(3) & (4)

6(3) & (4)

9(3)&(4)

6(2)

6(2)

9(2)

8

12, 13 & XI, XII & 14 XIII

Take preliminary 13(4) enquiry of facts

Montreal 1988

Beijing C Beijing P 2010 2010

Montreal 2014

Return of 14 alleged offender Onward journey 15 of alleged offender Extradition

16

8

Flight safety

17

9(1)

XIV

Facilitation of flight

9(2)

10

16

Send to competent authorities

7

7

10

Assistance between States

10

11 & 12

17 & 18

Report to ICAO

11

13

19

Treatment of alleged offender Joint Air Transport Operating Organizations or International Operating Agencies2

18

5

XI

9

X

IX, XV & XVI

11

X

15

VIII

It can be seen that the conventions provide a lot of procedural rights and obligations to the States. Each provision must be looked at individually, within the context of the specific convention. Caution should be given when applying these obligations, as they may not be complete. For example, Article 16(2) of the Tokyo Convention 1963 makes it explicitly clear that: “nothing in this Convention shall be deemed to create an obligation to grant extradition”. As a result, it does not provide an obligation to extradite and instead leaves extradition to other international instruments to govern. Another example is found in Article 7 of The Hague Convention 1970, which provides two possibilities to a contracting State in which an alleged offender is found. The State can either:

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CRIMINAL AVIATION LAW • extradite the offender, or • submit the offender to the competent authorities for the purpose of persecution.62 The concerned State has discretion to prosecute the alleged offender or not as it is only obliged to submit the individual “for the purpose of prosecution”.63 Therefore, there is no obligation to send the alleged offender to court or prosecute the alleged offender if found guilty.

6.6 Powers of the Aircraft Commander The powers of the aircraft commander are contained in Chapter III of the Tokyo Convention 1963.64 Chapter III must be assessed in its entirety as is has a different scope than the rest of the Convention.  • Article 5(1) requires an international element: “[T]he last point of take-­off or the next point of intended landing is situated in a State other than that of registration, or the aircraft subsequently flies in the airspace of a State other than that of registration with such person still on board.” This is opposed to the rest of the Tokyo Convention 1963 that just requires the aircraft to be in flight; • Article 5(2) provides a different definition for the term ‘in flight’: In flight includes the time the aircraft’s doors are closed following embarkation, until the door is opened for disembarkation. The scope is wide in the cases of forced landing as in flight shall continue until the competent authorities take over. As a result, the time duration of the powers of the aircraft commander overlap with the other Articles of the Tokyo Convention 1963, but they are not identical. The powers of the aircraft commander fall into three broad areas.65

6.6.1 Restraint Article (6)(1) of the Tokyo Convention 1963 provides the powers of the aircraft ­commander. The aircraft commander may, when he has reasonable grounds to believe that a person has committed, or is about to commit, on board the aircraft, an offence or act 62 Jacob Sundberg, ‘The Case for an International Criminal Court’, 37 Journal of Air Law and Commerce (1971), at 211–227. 63 The inclusion of compulsory prosecution was rejected by the drafters. Robert Boyle, ‘International Action to Combat Aircraft Hijacking’, 4 University of Miami Inter-American Law Review (1972), at 473. 64 Jordan Campbell, ‘Get off My Plane: The Need for Extreme Deference to Captains and Crews on International Flights under the Tokyo Convention of 1963’, 77 Journal of Air Law and Commerce 2 (2012), at 367–402. 65 See, Aaron Swerdlow, ‘Modern Approaches to the Powers of the Aircraft Commander Under Article 6 of the Tokyo Convention’, 10 Issues Aviation Law and Policy 1 (2010), at 105–144.

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CRIMINAL AVIATION LAW contemplated in Article 1 paragraph 1, impose upon such person reasonable measures including restraint which are necessary; (a) to protect the safety of the aircraft, or of persons or property therein; or (b) to maintain good order and discipline on board; or (c) to enable him to deliver such person to competent authorities or to disembark him in accordance with the provisions of this Chapter. According to Article 6(2), the aircraft commander may require or authorise other crew members or passengers to assist in restraining the person. Other crew members and passengers “may also take reasonable preventive measures without such authorization when he has reasonable grounds to believe that such action is immediately necessary”. The measures taken to restrain the individual shall be applied not beyond any point after the landing of the aircraft unless: (a) such point is in the territory of a non-­Contracting State and its authorities refuse to permit disembarkation of that person or those measures have been imposed in accordance with Article 6, paragraph 1(c) in order to enable his delivery to competent authorities; (b) the aircraft makes a forced landing and the aircraft commander is unable to deliver that person to competent authorities; or (c) that person agrees to onward carriage under restraint.66 Finally, per Article 7(2), the aircraft commander is obliged to notify the State of landing as soon as practically possible when such an individual has been placed under restraint in accordance with Article 6 of the Tokyo Convention 1963. While the aircraft commander and those assisting shall be immune from criminal prosecution while acting in accordance with Chapter III of the Tokyo Convention 1963 following Article 10, this immunity is not absolute. Each event must be judged on a case-­by-case basis to assess whether the aircraft commander and any assistants acted on reasonable grounds to satisfy Article 6 and not beyond that prescribed in Article 7. As a result, an act may be within or outside of the limits prescribed by the Tokyo Convention 1963.67

66 Tokyo Convention 1963, Art. 7(1). 67 See, Zikry v. Air Canada (No. 1716/05 A, Magis. Ct. Haifa, 9 November 2006); Eid v. Alaska Airlines (No. 06–16457, 621 F.3d 858, 9th Cir., 30 July 2010); Cerqueira v. American Airlines, 520 F.3d 1, 1st Cir., 10 January 2008); Moshe Leshem, ‘Court Analyzes the Elements of Air Carriers Immunity Under the Tokyo Convention 1963: Zikry v. Air Canada’, 32 Air and Space Law 3 (2007), at 220–224; Gerard Chouest, ‘Eid v. Alaska Airlines No. 06–16457 (9th Cir. 30 July 2010)’, 36 Air and Space Law 4/5 (2011), at 335–338; ICAO, Amendment to Article 10 of the Tokyo Convention 1963, International Conference on Air Law, 26 March to 4 April 2014, Montreal, Canada, DCTC Doc No. 15 28/02/14 (2014).

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6.6.2 Disembarkation The pilot is not free to land in any State, as this would require prior second freedom of the air permission or ad hoc permission granted by the landing State.68 However, the aircraft commander is allowed to disembark persons once the aircraft has landed under the conditions set forth in Article 8(1). The aircraft commander may, in so far as it is necessary for the purpose of subparagraph (a) or (b) of paragraph 1 of Article 6, disembark in the territory of any State in which the aircraft lands any person who he has reasonable grounds to believe has committed, or is about to commit, on board the aircraft an act contemplated in Article 1, paragraph 1(b). Disembarkation is not an absolute right as it must be in a contracting State and the aircraft commander must have ‘reasonable grounds’ to believe that the individual has committed or was about to commit an act or offence as set out in Article 1(1).

6.6.3 Delivery Article 9(1) allows the aircraft commander to deliver the individual to the relevant competent authorities of the contracting State. This is more limited than the disembarkation requirements for three reasons. 1. There is a level of discretion left to the aircraft commander as the Article uses the term ‘may’ rather than obligatory terms such as ‘shall’ or ‘must’. 2. The delivery can only be carried out between the aircraft commander and a contracting State. Therefore, if the aircraft lands in a non-­contracting State, either due to forced landing or the aircraft reaches its place of destination, the Tokyo Convention 1963 does not cover such a situation. 3. Delivery is only for ‘serious offences’. This term is not defined and is then left to the aircraft commander to interpret. If the aircraft commander intends to deliver an individual to the competent authorities, then the authorities of such State shall be notified as soon as practicable by the aircraft commander of the intention to deliver, as per Article 9(2). Once delivery has taken place, as per Article 9(3), the aircraft commander shall provide evidence and information to the authorities. The powers of the aircraft commander remain the same under the Montreal Protocol 2014. However, Article 9(1) is amended by the Protocol to reduce the burden of the aircraft commander with regards to delivering the person alleged of committing an act or an offence. Now, the aircraft commander may deliver based on reasonable believe that the person “committed on board the aircraft an act which, in his opinion, is a serious offence” without the requirements of “according to the penal law of the State of registration of the aircraft” as found in Article 9(1) of the Tokyo Convention 1963. This change allows the 68 See, Section 5.2.2.

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CRIMINAL AVIATION LAW aircraft commander to focus on the safety of the aircraft, without having to assess the offence or act against the domestic law of the State of registration.

6.7 In-­Flight Security Officer While in-­flight security officers or Sky Marshals have been used since the 1960s, mainly by the United States, it was the 9/11 attacks against the United States that prompted their inclusion in an international aviation law convention.69 As a result, they were included in the Montreal Protocol 2014 in Article VII – Article 6(3), which ended up being the most contentious issue during negotiations.70 While a definition of the term ‘in-­flight security officer’ was discussed during the drafting stage, a definition was not included.71 Despite this, Article 6(3) does provide some guidance as it includes only in-­flight security officers authorised under an agreement between the relevant contracting States.72 Where an in-­flight security officer is permitted, the in-­flight security officer may “take reasonable preventive measures” without prior authorisation from the aircraft commander, per Article 6(3), so long as the in-­flight security officer: has reasonable grounds to believe that such action is immediately necessary to protect the safety of the aircraft or persons therein from an act of unlawful interference, and, if the agreement or arrangement so allows, from the commission of serious offences.73 Article 6(3) introduces for the first time the concept of ‘unlawful interference’. This should be interpreted to mean those acts and offences falling under the Tokyo Convention 1963 as amended, as opposed to using the definition found in Chapter 1 of Annex 17 to the Chicago Convention 1944.74 Acts of unlawful interference. These are acts or attempted acts such as to jeopardize the safety of civil aviation, including but not limited to: •

unlawful seizure of aircraft;

•

destruction of an aircraft in service;

•

hostage-­taking on board aircraft or on aerodromes;

69 See, Michael Jennison, ‘The Montreal Protocol of 2014 is Intended to Modernise the Tokyo Convention of 1963: Can it Succeed?’, 39 Annals of Air and Space Law (2014), at 8–10. 70 Ibid., at 8. See also, Jeffrey Klang, ‘Federal Air Marshals: The Last Line of Defense’, 27 Annals of Air and Space Law (2002), at 363–380. 71 Ibid., at 31–32. 72 Ibid. 73 See, for a definition of ‘unlawful interference’, Annex 6 to the Chicago Convention 1944, Operation of Aircraft, Part II – International General Aviation – Aeroplanes, 10th edn (2016), at 1.1. 74 See, for Annex 17’s approach to in-flight security officers, Annex 17 to the Chicago Convention 1944, at 4.7.5, 4.7.7 and 4.7.8.

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forcible intrusion on board an aircraft, at an airport or on the premises of an aeronautical facility;

•

introduction on board an aircraft or at an airport of a weapon or hazardous device or material intended for criminal purposes;

•

use of an aircraft in service for the purpose of causing death, serious bodily injury, or serious damage to property or the environment;

•

communication of false information such as to jeopardize the safety of an aircraft in flight or on the ground, of passengers, crew, ground personnel or the general public, at an airport or on the premises of a civil aviation facility.75

The rights of the in-­flight security officer are, thus, less than that as if he/she were a ­passenger. There is a balancing act between the aircraft commander and the in-­flight security officer. It could either be seen that the two have separate but equal authority or that the aircraft commander has the ultimate responsibility, where the in-­flight security officer shall fall under such authority. The latter would seem to prevail as it conforms to Annex 6 of the Chicago Convention 1944.76 Article 6(4) clarifies that the Montreal Protocol 2014 does not constitute prior consent nor is any contracting State obliged to “establish an IFSO programme or to agree to a bilateral or multilateral agreement or arrangement authorizing foreign IFSO to operate in its territory.” This must be done separately. Article 10 has thus been amended by Article IX of the Montreal Protocol 2014 to also include the in-­flight security officer under the scope of criminal immunity.

6.8  Dispute Settlement The potential for dispute settlement was envisaged by the drafters of the Conventions. As a result, all of the Conventions, excluding the Protocols, contain dispute settlement mechanisms regarding the interpretation and application of the Convention between contracting States.77 Three different dispute forums are provided in the Conventions: 1. Negotiation 2. Arbitration 3. International Court of Justice (ICJ)

75 Ibid., at 1–1. 76 Annex 6 to the Chicago Convention 1944, at Chapter 4.5.1. See, Ruwantissa Abeyratne, ‘Protocol to the Tokyo Convention of 1963: A Legal Triumph or Damp Squid?’, 39 Air and Space Law 4/5 (2014), at 251. 77 See, Tokyo Convention 1963, Art. 24; Hague Convention 1970, Art. 12; Montreal Convention 1971, Art. 14; Beijing Convention 2010, Art. 20.

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CRIMINAL AVIATION LAW When a dispute arises, contracting States must first undergo negotiation, if this fails then arbitration should be sought, and as a last resort, one of the States may refer the dispute to the ICJ.

Definition Arbitration: This “is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.”78 Referral to the ICJ must be done by a State Party to the dispute within six months from the date of the request for arbitration when they are unable to agree on the organisation of the arbitration. As a result, this is a step-­by-step process, where the prior option must be exhausted before moving on to the next. The dispute settlement pertains to the ‘interpretation’ or ‘application’ of the Conventions and is between the States.79 It does not cover the criminal proceedings initiated against persons accused of engaging in the offences. Such matters are the responsibility of the domestic criminal courts and are administered under domestic law. Article XIII – Article 18 bis of the Montreal Protocol 2014 makes it clear that recovery of damages under domestic law is allowed in case of disembarkation or delivery. Offences and acts under the Montreal Protocol 2014 can cause financial loss to an air operator, such as fixing destroyed property, costs incurred due to staff medical leave or charges incurred due to diversion. Successful recovery will depend greatly on the domestic law of the State and the location of the person.

6.9 Issues of Entry into Force The three most recent treaty instalments have not received a lot of attention from States, the Beijing Convention 2010 and Beijing Protocol 2010 only entered into force in 2018, with very few ratifications as compared to the other criminal conventions, and the Montreal Protocol 2014 has not entered into force. In order for the Montreal Protocol 2014 to enter into force, it must have twenty-­two ratifications, acceptance, approval or accession as detailed in Article XVII. The Montreal Protocol 2014: • Extends jurisdiction to the State in which the operator is located and the State of destination. • Lowers the test of what constitutes unruly behaviour making it more practical for the pilot in command;

78 World Intellectual Property Organization, ‘What is Arbitration?’, www.wipo.int/amc/en/arbitra tion/what-is-arb.html. 79 See, Chapter 3.

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CRIMINAL AVIATION LAW • Allows airlines to recover costs incurred by unruly passengers from the offending passenger; and • Introduces an in-­flight safety officer. The last point could be detrimental to its entry into force as it is a controversial topic. Despite the positive contributions, its added value is questionable as a lot of its Articles are dedicated to simply modernising the text of the Tokyo Convention 1963 and it utilises the existing text of the Tokyo Convention 1963. The Beijing Convention 2010 has entered into force as it obtained the required 22 ratifications as detailed in Article 22. However, its success is also limited. As the Beijing Convention 2010 takes from past conventions, some of the same deficiencies are still present. For example, there are several key terms, such as ‘substance’ and ‘weapon’ with missing definitions, which produces legal uncertainty and there is a lack of a prosecution mechanism. In addition, there are new deficiencies hindering its number of ratifications. • The military exclusion clause found in Article 6(2) provides a lack of prosecution for what would otherwise constitute an offence against civil aviation, when such acts are done by armed forces during and armed conflict; • The Beijing Convention 2010 is a mix of reactive and proactive rule-­making. Aviation law is often written in the blood of accidents, so without major recent accidents within the scope of the offences, the political will of States to adopt the Beijing Convention 2010 may be minimal; • There is a lot of repetition with other treaties, so the added value of the Beijing Convention 2010 is questionable; • The Beijing Convention 2010 did not go far enough to incorporate all emerging threats, such as its weak approach to cybersecurity; • The extradition requirements may be too invasive on existing laws for States to accept; • The expansion of jurisdiction may be too much for States to accept; and • There is concern among some States that it is highly intrusive into States’ domestic legal systems. As a result, the Beijing Convention 2010 has only just entered into force and the numbers of State Parties are likely to remain low for some time compared with the high adoption number of the preceding instruments.

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Recommended Literature Ruwantissa Abeyratne, Aviation Security Law (Springer, 2010). Ruwantissa Abeyratne, ‘The Beijing Convention of 2010: An Important Milestone in the Annals of Aviation Security’, 36 Air and Space Law 3 (2011), 243–255. Ruwantissa Abeyratne, ‘A Protocol to Amend the Tokyo Convention of 1963: Some Unanswered Questions’, 39 Air and Space Law 1 (2014), 47–58. Abraham Abramovsky, ‘Multilateral Conventions for the Suppression of Unlawful Seizure and Interference with Aircraft Part I: The Hague Convention’, 13 Columbia Journal of Transnational Law (1974), 381–405. Abraham Abramovsky, ‘Multilateral Conventions for the Suppression of Unlawful Seizure and Interference with Aircraft Part II: The Montreal Convention’, 14 Columbia Journal of Transnational Law (1975), 268–300. Robert Boyle and Roy Pulsifer, ‘The Tokyo Convention on Offenses and Certain Other Acts Committed on Board Aircraft’, 30 Journal of Air Law and Commerce (1964), 305–354. Commonwealth Secretariat, ‘Implementation Kits for the International Counter-­Terrorism Conventions’, www.unodc.org/pdf/crime/terrorism/. R. Mankiewicz, ‘The 1970 Hague Convention’, 37 Journal of Air Law and Commerce (1971), 195–210.

Points for Further Research • What is the role of domestic law in international criminal aviation law? • Why has the Montreal Protocol 2014 not come into force and why are States reluctant to become contracting States of the Beijing Convention 2010 and Beijing Protocol 2010? • Is there a hierarchy between the in-­flight security officer and the aircraft commander? • How do the treaties regulate cyberattacks? • Should domestic courts be given so much room to interpret the conventions or should the conventions be more prescriptive with definitions?

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Chapter 7

Contractual Liability

LEARNING OBJECTIVES  Identify the main features of the Warsaw Convention 1929 and the Montreal Convention 1999 and be able to make a comparison of the two international legal instruments.  Identify whether an event may constitute an accident under the Warsaw/Montreal System.  Understand the relevance of the principle of exclusivity of the Warsaw/Montreal System.  Become familiar with the limitations of liability for the air carrier and exoneration as provided in the Montreal Convention 1999.  Being able to identify the places of jurisdiction in which a claim may be lawfully brought in accordance with the terms of the Montreal Convention 1999.

7.1 Introduction International private aviation law can be considered as that branch of laws governing actions and events concerning private individuals or private entities in the carrying out of aviation activities. International private aviation law applies to aviation activities having an international dimension, that is, involving more than one State. Domestic air carriage does not fall within the scope of international regulation. International private aviation law can be divided into three macro-­thematic areas:

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CONTRACTUAL LIABILITY 1. Contractual air carrier liability vis-­à-vis passengers;1 2. Third-­party liability and liability for damage caused on the surface of the Earth;2 3. Aviation Insurance.3 The focus of this chapter is exclusively the international legal framework concerning airline liability in the carriage of passengers, cargo and mail by air by way of contract. Contractual air carrier liability is enshrined in a hybrid system that comprises elements of international and national law. While basic principles and rules concerning liability have been unified and harmonised on a global level by means of the adoption of international legal instruments, cases are still to be decided by national courts, as international conventions do not in any way establish an international judicial forum for contractual airline liability.

7.2 Historical Background The establishment of an international legal regime concerning airline liability became necessary as soon as the massive development of commercial air transportation started. It should not come as a surprise, therefore, that the first international piece of legislation concerning private aviation law was the Convention for the Unification of Certain Rules Relating to International Air Carriage, known as the Warsaw Convention 1929, which was adopted more than a decade earlier than the Chicago Convention 1944. Two main reasons may be identified with respect to the necessity of delineating an international legal regime concerning airline liability: 1. Passengers needed uniform legal protection as to damage arising from accidents occurring in the course of international air transportation; and 2. A limitation of liability for airlines was vital so to allow an efficient and a fast development of international air transportation, which is in the public interest.4 Such a limitation also ensured that airlines could get adequate insurance to prevent risks inherent to the operation of aircraft.5 However, the main essence of the Warsaw Convention 1929 seems to have been that of significantly limiting carrier liability in an attempt to foster and facilitate a fast development of international carriage by air as a means of transportation.

1 See, Chapter 7. 2 See, Chapter 8. 3 See, Chapter 9. 4 The exposure of air carriers to unlimited liability in the event of damage to passengers, baggage and goods would have had a detrimental impact on the aviation industry. Limitations of liability have also been among the most litigated elements and limits have been subject to various amendments since 1929. See, Lawrence B. Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (Kluwer Law International, 2000), at 120–121. 5 Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017), at 149.

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7.2.1  Warsaw Convention 1929 The Warsaw Convention 1929 represents the first international instrument adopted in the field of private aviation law. The Convention, which is still in force, has had an unquestionable success. Its fundamental purpose was to unify international law with regard to airlines’ liability and to “supplant […] domestic laws if they differed from the terms of the Convention”.6

Treaty Information Title of Treaty: Convention for the Unification of Certain Rules Relating to International Carriage by Air Short Title: Warsaw Convention 1929 Date of Adoption: 12 October 1929 Citation: N/A Entry into Force: 13 February 1933 Legal Status: 152 State Parties

The Warsaw Convention 1929, as well as its amendments and successors, only focus on certain essential matters, however, bestowing on national legal regimes and courts the identification of certain parameters, such as the determination and calculation of damage.7 The Warsaw Convention 1929 has received, in its almost century-­old existence, lots of criticism specifically with respect to liability limitation, which was considered too low and inadequate. Excessively low liability exposure was among the main reasons leading the United States to not become a party to this Convention. Moreover, in light of such controversial features, the Warsaw Convention 1929 has been subject to several amendments, in the form of protocols or international legal instruments, which have given rise to the so-­ called ‘Warsaw System’. The need for modernisation of the Warsaw Convention 1929 lead eventually to the adoption, in 1999, of the Montreal Convention 1999, which will be scrutinised in depth later in this chapter.

7.2.2 Amendments and Additions Following the Warsaw Convention 1929 Shortly after the adoption of the Warsaw Convention 1929, the aviation community began to consider the revision of certain crucial elements of the Convention, as, for instance, low

6 Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (2000), at 4. 7 Elmar Giemulla and Ludwig Weber (eds), International and EU Aviation Law: Selected Issues (Kluwer Law International, 2011), at 235.

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CONTRACTUAL LIABILITY limits of liability, strict requirements concerning documentation and some other shortcomings were seen to undermine the Convention’s appropriateness. It was, however, only after the end of World War II that the Legal Committee of ICAO, which replaced the CITEJA8 in the drafting of new conventions concerning international aviation, held numerous meetings and conferences to discuss new legal development with respect to carrier liability in international carriage by air. The numerous treaties and ­protocols, which, in different ways, have amended the Warsaw Convention 1929 are briefly discussed below. They, along with the original drafting of the Warsaw Convention 1929, are cumulatively referred to as the ‘Warsaw System’.

7.2.2.1  The Hague Protocol 1955 Treaty Information Title of Treaty: Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air Short Title: Hague Protocol 1955 Date of Adoption: 28 September 1955 Citation: 478 UNTS 371 Entry into Force: 1 August 1963 Legal Status: 137 State Parties

Most State Parties to the Warsaw Convention 1929 are also State Parties to The Hague Protocol 1955. For these States, the applicable regime is that amended by the provisions of The Hague Protocol 1955. The focus of The Hague Protocol 1955 was that of raising liability limits, which were considered by some States, including the United States, too low. This attempt was still considered unsuccessful by the United States. The United States is in fact still not a party to The Hague Protocol 1955. The Hague Protocol 1955 also attempted to address some interpretative controversies regarding crucial expression that had been translated from the original French version of the Warsaw Convention 1929.9

8 The Comité Internationale Technique d’Experts Juridique Aériens (CITEJA, International Technical Committee of Legal Experts on Air Questions) was formed in 1925 and was appointed to study, develop and draft a convention regarding the unification of private aviation law, and whose work eventually culminated with the drafting of the Warsaw Convention in 1929. 9 See, for instance, the issue relating to the interpretation of the term ‘wilful misconduct’, which French courts had interpreted as equivalent to ‘intention’. Brian F. Havel and Gabriel S. Sanchez, The Principles and Practice of International Aviation Law (Cambridge University Press, 2014), at 263.

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7.2.2.2  Guadalajara Convention 1961 Treaty Information Title of Treaty: Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other Than the Contracting Carrier Short Title: Guadalajara Convention 1961 Date of Adoption: 19 September 1962 Citation: ICAO Doc. No. 8181 Entry into Force: 1 May 1964 Legal Status: 86 State Parties

The Guadalajara Convention 1961 introduced a significant element, namely, the distinction between ‘contracting carrier’ and ‘actual carrier’. As will be discussed, this distinction can also be found in Articles 39 and 40 of the Montreal Convention 1999, whereby the contracting carrier is liable for entire carriage, while the actual carrier is only liable for the segment it performs.

7.2.2.3  Guatemala City Protocol 1971 Treaty Information Title of Treaty: Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as Amended by The Hague Protocol Short Title: Guatemala City Protocol 1971 Date of Adoption: 8 March 1971 Citation: ICAO Doc. No. 8392 Entry into Force: N/A Legal Status: Not in force

The Guatemala City Protocol 1971 originally received twenty-­one signatures, but eventually never entered into force, due to a very scarce number of ratifications. Article 20 of this Protocol requires thirty ratifications for the Protocol to enter into force. The primary objective of this international document was that of raising the liability caps, which, upon request

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CONTRACTUAL LIABILITY by the United States delegation, were raised up to 1.5 million Gold Francs (equivalent to USD 100,000).10 The Guatemala Protocol 1971 is not expected to enter into force; after that, the liability limits were revised in the Montreal Convention 1999.

7.2.2.4  Montreal Additional Protocols 1975 Four protocols were adopted in 1975 in Montreal to amend and modernise the Warsaw System: • Montreal Additional Protocol No. 111: This amended the currency of reference, introducing the monetary standards in SDR (in force – fifty-­one State Parties). • Montreal Additional Protocol No. 212: This converted the limits of The Hague Protocol 1955 into SDR, in line with Protocol No. 1 (in force – fifty-­two State Parties). • Montreal Additional Protocol No. 313: This set a new liability cap of SDR 100,000, amending the Guatemala City Protocol 1971 limits. It is the only one of the Montreal Protocols to have not entered into force (not in force). • Montreal Additional Protocol No. 414: This modernises and simplified the rules concerning documentation under Articles 3 and following of the Warsaw Convention 1929. It also set out the limit of SDR 17 per kilogramme as to liability in the carriage of cargo (in force – sixty State Parties). The Warsaw System, which included the legal instruments discussed above, was still felt inadequate to protect the legal interests of passengers and the commercial needs of the industry.

10 Giemulla and Weber, International and EU Aviation Law: Selected Issues (2011), at 227. 11 Additional Protocol No. 1 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, opened for signature 25 September 1975, ICAO Doc. No. 9145, entered into force 15 February 1996. 12 Additional Protocol No. 2 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as Amended by The Hague Protocol 1955, opened for signature 25 September 1975, ICAO Doc. No. 9146, entered into force 15 February 1996. 13 Additional Protocol No. 3 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as Amended by The Hague Protocol 1955 and the Guatemala City Protocol 1971, opened for signature 25 September 1975, ICAO Doc. No. 9147. 14 Additional Protocol No. 4 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as Amended by The Hague Protocol 1955, opened for signature 25 September 1975, ICAO Doc. No. 9148, entered into force 14 June 1988.

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WARSAW SYSTEM Convention for the Unification of Certain Rules Relating to International Carriage by Air (Warsaw Convention 1929) amended by Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air (Hague Protocol 1955) amended by Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other Than the Contracting Carrier (Guadalajara Convention 1961) amended by Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, as Amended by The Hague Protocol (Guatemala City Protocol 1971) amended by Montreal Additional Protocol No. 1 amended by Montreal Additional Protocol No. 2 amended by Montreal Additional Protocol No. 3 amended by Montreal Additional Protocol No. 4 United States and International Air Transport Association Montreal Agreement 1966 International Air Transport Association Intercarrier Agreement 1995 MONTREAL SYSTEM Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention 1999)

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7.2.2.5  United States and International Air Transport Association Montreal Agreement 1966 It is a private agreement between the International Air Transport Association (IATA) airlines flying from or to the United States and the United States Civil Aeronautics Board (CAB) – predecessor of the United States Department of Transportation (DOT) – concluded to increase liability limits to USD 75,000 to all international carriage by air for which a point in the United States was a point of departure or destination and an agreed stopping place. It took the form a private agreement between the carriers and the passengers.15

7.2.2.6  International Air Transport Association Intercarrier Agreement 1995 The second agreement involving IATA is a private agreement, which allowed carriers to amend their conditions of carriage so as to modernise the “stagnating Warsaw System”16 and waive liability limitations, which were considered grossly inadequate in many jurisdictions.17 The IATA Intercarrier Agreement 1995 significantly fostered the revision of the Warsaw System and accelerated the development of the new Montreal Convention 1999.

7.2.3  Montreal Convention 1999 The Montreal Convention 1999 was adopted, under the auspices of ICAO, on 28 May 1999 with the objective of replacing the Warsaw System. More specifically, the main purpose of the Montreal Convention 1999 included the “modernisation and consolidation of the Warsaw Convention and related instruments” and, broadly, harmonisation of private international aviation law.18

Treaty Information Title of Treaty: Convention for the Unification of Certain Rules for International Carriage by Air Short Title: Montreal Convention 1999

15 See, Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 269–271; see also, Paul S. Dempsey and Michael Milde, International Air Carrier Liability: The Montreal Convention 1999 (Centre for Research in Air & Space Law McGill University, 2005), at 20–24. 16 Mendes de Leon, Introduction to Air Law (2017), at 151. 17 See, Ruwantissa Abeyratne, ‘Management of the Warsaw System of Air Carrier Liability’, 3 Journal of Air Transport Management 1 (1997), at 37–45. 18 Preamble to the Montreal Convention 1999. Emphasis was also laid on the “importance of ensuring protection of the interests of consumers […] and the need for equitable compensation based on the principle of restitution”.

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Date of Adoption: 28 May 1999 Citation: 2242 UNTS 309 Entry into Force: 4 November 2003 Legal Status: 136 State Parties

The new convention was drafted in six equally authentic languages: • English

• Arabic

• French

• Russian

• Chinese

• Spanish

The Montreal Convention 1999 neither replaces nor supersedes the Warsaw Convention 1929, as the two Conventions are formally independent and respectively in force. While both Conventions still remain independently applicable in different scenarios, the Montreal Convention 1999 clarifies that this Convention shall apply in the event the States involved are also parties to the Warsaw Convention 1929.19 In light of this, the wording and structure of the two conventions are very similar, as shown by the common approach concerning the use of certain terms and categories.20 As a result, it must be noted that also the interpretation of terms and provisions of both the Montreal Convention 1999 and the Warsaw Convention 1929, decisions and jurisprudence may be considered interchangeably to the extent that the terminology has not ­significantly changed and with regard to notions and provisions that form part of both Conventions.

7.3  Scope of Application Article 1 of the Montreal Convention 1999 declares: This Convention applies to all international carriage of persons, baggage or cargo performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking. Accordingly, the Convention is applicable to: • international carriage by aircraft for reward; • gratuitous international carriage performed by an air transport undertaking.

19 Montreal Convention 1999, Art. 55(a). 20 See, Mendes de Leon, Introduction to Air Law (2017), at 153.

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CONTRACTUAL LIABILITY ‘International carriage’ is defined as the carriage of passengers, cargo or mail in which the place of departure and the place of destination are situated either: • within the territories of two different State Parties; or • within the territory of a single State Party if there is an agree stopping place within the territory of another State, even if that State is not a Party to the Montreal Convention 1999.21 It clearly follows that pure domestic carriage does not fall under the application of the Convention.22 Nationality of the air carrier or the passengers (or shippers) cannot be used to determine whether carriage is international under the Montreal Convention 1999. Also, the intent of the passenger may not always be relevant for the determination of the international nature of the carriage and the subsequent competent court.23 Carriage within points located in the same country may be considered international carriage under the Montreal Convention 1999, if it forms part of one undivided carriage to be performed by several successive carriers and it has been regarded by the parties as a single operation whether agreed upon in a single contract or a series of contracts.24 Such specification covers code-­share and interline scenarios where the passenger can make a single reservation.25 National courts have often taken into account the passenger’s intention regarding whether the trip shall be considered as a single operation.26

Did You Know? International carriage under the Montreal Convention 1999 includes:

 A one-­way flight from Mexico City (Mexico) to Frankfurt (Germany);  A one-­way flight operated by successive carriers from Vancouver (Canada) to

London (United Kingdom) via Toronto (Canada), if it has been regarded by the party as a single operation;

 A return flight London (United Kingdom) – Doha (Qatar) – London (United Kingdom). Doha (Qatar) is an agreed stopping place;

21 Montreal Convention 1999, Art. 1(2). 22 Some States, including the EU Member States, have decided to apply the provisions of the Montreal Convention 1999 also to domestic carriage. See, Mendes de Leon, Introduction to Air Law (2017), at 154. 23 See, Richards v. Singapore Airlines Ltd., WL 6405868 (C.D. Cal. 2013); Hornby v. Lufthansa German Airlines, 593 F.Supp. 2d 1132 (C.D. Cal. 2009). See, inter alia, Christopher E. Cotter, ‘Recent Developments in Montreal Convention Litigation’, 79 Journal of Air Law and Commerce 3 (2014), at 291–315. 24 Montreal Convention 1999, Art. 1(3). 25 See, Chapter 5. 26 See, Zhang v. Air China, 866 F. Supp. 2d 1162 (N.D. California 2012).

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 A return flight Istanbul (Turkey) – Abidjan (Ivory Coast) – Istanbul (Turkey),

since it is irrelevant whether the State where the agreed stopping place is located (Ivory Coast) is a party to the Convention.

Not considered International carriage under the Montreal Convention 1999:

 A one-­way flight from Vancouver (Canada) to Toronto (Canada);  A one-­way/return flight from Melbourne (Australia) to Perth (Australia);  A one-­way flight from Istanbul (Turkey) to Abidjan (Ivory Coast), as Ivory Coast is not a party to this Convention.

Carriage must be performed by an aircraft. For the purpose of the Convention’s applicability, the term ‘aircraft’ includes helicopters, balloons and gliders.27 Additionally, the Montreal Convention 1999 requires the existence of an agreement between the parties, that is, the carrier and the passenger. As a result, airline employees who are on board working are not covered by the Convention.28 When a passenger or a shipper pays for the carriage, this is covered under the Convention so long as the other requirements are fulfilled. Where the carrier accepts to carry passengers or cargo gratuitously, the carriage falls under the Montreal Convention 1999, only if the carrier is an air transport undertaking.29 ‘Air transport undertaking’ is not defined in the Convention, but it seems to imply that the undertaking shall regularly perform air transport and being licensed for such purpose. However, general rules regarding the carriage being ‘for reward’ or ‘gratuitous’ are not easily identifiable and the individual circumstances play a decisive role.30

Did You Know? Article 1 of the Warsaw Convention 1929 was nearly unchanged by the Montreal Convention 1999. The term ‘international carriage’ is a novelty of the Montreal Convention 1999, as the Warsaw System only knew of ‘international transportation’. No relevance is to be given to this difference though.    Moreover, the Montreal Convention 1999 introduced a fourth paragraph in Article 1, thereby explicitly confirming the Convention’s applicability to scenarios involving “carriage performed by persons other than the contracting

27 See, Dempsey and Milde, International Air Carrier Liability: The Montreal Convention 1999 (2005), at 68. 28 Re Mexico City Aircrash of October 31, 1979, Haley v. Western Airlines, 708 F. 2d 400 (9th Cir. 1983). 29 Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (2000), at 12–13. 30 See, Giemulla and Weber, International and EU Aviation Law: Selected Issues (2011), at 236.

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carrier”. While such provision was not expressly encompassed in the Warsaw Convention 1929, this principle was already incorporated into the Warsaw System by way of the Guadalajara Convention 1961, to simplify liability issues concerning code-­share operations and combined carriage.

By virtue of its Article 2, the Montreal Convention 1999 also applies to carriage performed by States or by legally constituted public bodies, provided that the conditions of Article 1 are met. Article 2, which remains unchanged from the Warsaw Convention also makes it clear that the liability regime for the loss, damage or delay of postal items is that arising from the relationship between the carrier and the postal administration.31

Did You Know? It is relevant to make a distinction between the expression ‘successive carriage’ (Article 36 of the Montreal Convention 1999) the term ‘combined carriage’ (Article 38 of the Montreal Convention 1999) and ‘carriage performed by a person other than the contracting carrier’ (Article 39 and following of the Montreal Convention 1999).    Rules concerning successive carriage are meant to cover situations in which the carriage is provided under, for instance, interline arrangements and performed by several successive carriers, provided that the carriage being international and part of a single contract or a single (indivisible) series of contracts.32    Combined carriage, as described by Article 38 of the Montreal Convention 1999, refers to “carriage performed partly by air and partly by any other mode of carriage”.33 As a general rule, the provisions of the Convention only applies to the segment of carriage performed by air. However, provided that carriage by air is only and always subject to the Convention, the parties are allowed to insert their conditions of carriage relating to other modes of transportation.34 This matter may become relevant in the context of agreements between air carriers and railway companies for the ‘combined’ carriage of passengers.35   As noted above, the Guadalajara Convention 1961 introduced the distinction between ‘contracting’36 and ‘actual’37 carrier, which takes on particular relevance in the context of code-­share agreements.38 31 Montreal Convention 1999, Art. 2(2). See, Chapter 2. 32 Dempsey and Milde, International Air Carrier Liability: The Montreal Convention 1999 (2005), at 225. 33 Montreal Convention 1999, Art. 38(1). 34 Montreal Convention 1999, Art. 38(2). 35 See, for instance, Andrea Trimarchi, ‘Intermodal Air-Rail Agreements: Legal Aspects and Considerations’, 44 Air & Space Law 1 (2019), at 27–44. 36 ‘Contracting carrier’ means the person that, as principal, makes a contract of carriage with the passenger or the consignor. Montreal Convention 1999, Art. 39. 37 ‘Actual carrier’ refers to the person who “performs, by virtue of authority from the contracting carrier, the whole or part of the carriage, but is not with respect to such part a successive carrier within the meaning of this Convention”. Ibid. 38 See, Section 5.3.

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7.4 Documentation The Montreal Convention 1999 contributed to modernising and rendering simpler the regulation concerning documentation of the carriage by aircraft. The rules can be systematically distinguished into two macro areas, namely, documentation concerning passengers and baggage (Article 3), and documentation regarding cargo (Articles 4–11).

7.4.1  Documentation Relating to Passengers and Baggage Article 3 of the Montreal Convention 1999 is dedicated to the regulation of documentation requirements for passengers and baggage. This provision has been found to contribute to the simplification relating to air ticketing and electronic ticketing,39 in line with the IATA’s objective to attain complete paperless ticketing by 2008.40 The document of carriage, which has terminologically replaced the expression ‘passenger ticket’ encompassed in the Warsaw System, shall necessarily contain the following elements: • An indication of the place of departure and the place of destination; • The indication of at least one agreed stopping place, should the place of departure and the place of destination be within the territory of the same State Party.41 Article 3 of the Montreal Convention 1999 also allows for the issuance of a ‘collective document of carriage’, which is, or may be, used in the context of charter operations.42 Additionally, the carrier shall deliver to the passenger a baggage identification tag for each piece of checked baggage. Contrary to the Warsaw Convention 1929, the Montreal Convention 1999 does not require any mandatory or minimum information to be included in the baggage identification tag, nor any indication on the number of identification baggage tags to be issued.43 Non-­checked (i.e. hand-­luggage) are not governed by the conventions. 39 See, Ruwantissa Abeyratne, ‘Electronic Ticketing: Current Legal Issues’, 70 Journal of Air Law and Commerce 2 (2005), at 141–170; see also, Andrea Trimarchi, ‘An Analysis of the Grounds of Jurisdiction and Jurisdictional Issues in Light of the Warsaw/Montreal System’, 15 Issues in Aviation Law and Policy 1 (2015), at 377–398. 40 In 2004, IATA, for economic, environment-related and simplification reasons, set up an industry target of 100 per cent of e-ticketing in four years. See, www.iata.org/whatwedo/stb/Pages/e-ticketing.aspx. Whereas ticketless aviation is today a reality, it shall be highlighted that passengers may still need written evidence of their carriage for immigration purposes or for reimbursement reasons. See, Dempsey and Milde, International Air Carrier Liability: The Montreal Convention 1999 (2005), at 88. 41 Montreal Convention 1999, Art. 3(1). 42 Pablo Mendes de Leon and Werner Eyskens, ‘The Montreal Convention: Analysis of Some Aspects of the Attempted Modernization and Consolidation of the Warsaw System’, 66 Journal of Air Law and Commerce 3 (2001), at 1159. 43 As a matter of fact, in today’s practice, airlines merely include the IATA identification code for the airports of origin and destination, the flight number and a bar code in the baggage identification tag. See, Eloisa C. Rodrigues-Dod, ‘Lucy in the Sky with Diamonds: Airline Liability for Checked-In Jewelry’, 69 Air Law and Commerce 4 (2004), at 745–747.

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Did You Know? The Warsaw Convention 1929 contains two different provisions governing, respectively, passenger ticket (Article 3) and luggage ticket (Article 4). The Convention prescribes a list of elements, which must appear on the above documentation under Articles 3 and 4.    A passenger ticket shall contain:44

 The place and date of issue  The place of departure and of destination  The agreed stopping places  The name and address of the carrier or carriers  A statement that the carriage is subject to the rules relating to liability established by this (the Warsaw) Convention

Pursuant to Article 4 of the Warsaw Convention 1929, the luggage ticket shall be made out in duplicate, one part for the passenger and the other part for the carrier and shall contain the following particulars:

 The place and date of issue  The place of departure and of destination  The name and address of the carrier or carriers  The number of the passenger ticket  A statement that delivery of the luggage will be made to the bearer of the luggage ticket

 The number and weight of the packages  The amount of the value declared in accordance with Article 22 of the Convention

 A statement that the carriage is subject to the rules relating to liability established by this (the Warsaw) Convention

The carrier is required to provide written notice stating that in the event the Montreal Convention 1999 is applicable, it may result in the limitation of liability of the carrier in respect of death of injury and for destruction, loss or damage to baggage, and for delay.45 The most

44 Warsaw Convention 1929, Art. 3(1). 45 Montreal Convention 1999, Art. 3(4).

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CONTRACTUAL LIABILITY significant novelty brought by the Montreal Convention 1999, however, relates to the fact that non-­compliance with the above requirements (contained in Article 3): shall not affect the existence or the validity of the contract of carriage, which shall, nonetheless, be subject to the rules of this Convention including those relating to limitation of liability. In other words, non-­issuance of a document of carriage or written notice does not impact on the liability limitations the carrier may invoke.46 The Warsaw Convention 1929, on the other hand, explicitly links the applicability of the liability regime, and the liability limitation for the carrier, to the issuance and delivery of a ticket to the passenger.47 Copious litigation, brought under the Warsaw Convention 1929, is available with respect to the failure by the carrier to provide an adequate written notice to the passenger.48 In the application of the Warsaw Convention 1929, domestic courts have found that if the notice is ‘unreadable’, unclear, inadequate or even completely missing, the carrier cannot invoke the limitations of its liability.49

7.4.2  Documentation Relating to Carriage of Cargo The provisions of the Montreal Convention 1999 on carriage of cargo are significantly shaped on the Montreal Protocol No. 4 of 1975.

46 See, Terence Sweeney, ‘The Requirement of Notice in the Warsaw Convention’, 61 Journal of Air Law and Commerce 2 (1995), at 401–404. 47 Ludecke v. Canadian Pacific Airlines Ltd., 98 DLR 3d 52 (Supreme Court of Canada, 1979) whereby the Canadian Supreme Court stated that even the ‘irregular’ delivery of a passenger ticket, in accordance with the terms of Article 3 of the Warsaw Convention 1929, entitles the carrier to benefit from the liability limitations concerning personal injury. 48 Arkin v. New York Helicopter Corp., 21 Av. Cas. (CCH), (N.Y. Supreme Court 1989). 49 See, for instance, Chan v. Korean Airlines Ltd., 490 U.S. 122 (1989) where the passenger received a ticket printed in 8 point type. In such case, the luggage ticket failed to record the number and weight of the baggage, as well as the number of the ticket. A similar conclusion was reached in the case Lisi v. Alitalia, where the print was put in “lilluputian typography so that the passenger’s attention was not sufficiently drawn to the limitation of the carrier’s liability”. Lisi v. Alitalia, 352 F.2d 494 (9th Cir. 1965). See, Michael Milde, ‘The Warsaw System of Liability in International Carriage by Air: History, Merits and Flaws and the New “Non-Warsaw” Convention of 28 May 1999’, 24 Annals of Air and Space Law (1999), at 178. See, Senai W. Andemariam, ‘Does the Montreal Convention of 1999 Require that a Notice Be Given to Passengers – What is the Validity of Notice of a Choice of Forum Clause under Montreal 1999’, 71 Journal of Air Law and Commerce 2 (2006), at 260–262. See also, Mendes de Leon, Introduction to Air Law (2017), at 160. It must be noted that, according to a consolidated judicial orientation arising in the United States, the failure to check a baggage by the carrier, although being explicitly required by the Warsaw Convention 1929, represents a merely insubstantial omission which does not give rise to unlimited liability. See, Republic National Bank v. Eastern Airlines, Inc., 639 F. Supp. 1410 (S.D.N.Y. 1986); Martin v. Pan American World Airways Inc., 563 F. Supp. 135 (D.D.C. 1983); Arkin v. New York Helicopter Corp., 21 Av. Cas. (CCH), (N.Y. Supreme Court 1989).

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CONTRACTUAL LIABILITY Pursuant to Article 5 of the Montreal Convention 1999, carriage of cargo requires the delivery of an air waybill, which has replaced the ‘air consignment note’ provided for in the Warsaw Convention 1929. The air waybill can be substituted by other means aiming at preserving the record of the carriage, provided that, in such event, a cargo receipt is issued.50 The air waybill shall be made out by the consignor and delivered to the carrier. The air waybill shall include:51 • An indication of the places of departure and destination; • An indication of at least one agreed stopping place, should the places of departure and destination be within the territory of the same State Party; and • An indication of the weight of the consignment.52 IATA has adopted a standard international air waybill, which has been followed and used by most of airlines worldwide.53 The air waybill and the cargo receipt shall be made out in three original parts54 and are considered to be evidence of the conclusion of a contract of carriage under the Montreal Convention 1999.55 Both the consignor and the carrier are fully liable for all damage suffered as a result of irregularities in the particulars or statements of the air waybill.56

7.5 Liability of the Air Carrier in Case of Death or Injury of Passengers The regulations concerning liability of the air carrier are contained in Chapter 3 of the Montreal Convention 1999 (Articles 17–37), which find analogous collocation in Chapter 3 of the Warsaw Convention 1929 (Articles 17–30). Chapter 3 is considered as the ‘centre of gravity’ of the entire Montreal Convention 1999; thus, it needs a detailed analysis of provisions and terminology, as well as a careful scrutiny of the available jurisprudence. 50 Montreal Convention 1999, Art. 5(2). 51 Ibid. The requirements of the air waybill have been considerably simplified, as Article 8 of the Warsaw Convention 1929 still provides a very long and rigid list of elements that must necessarily be included in the air consignment note. 52 The exact identification of the weight is of crucial relevance, as, in accordance with the terms of Article 22 (3) of the Montreal Convention 1999, maximum liability is set at SDR 17 per kilogramme. 53 See, IATA Cargo Services Resolutions Manual. For a more detailed analysis on this point, see, Dempsey and Milde, International Air Carrier Liability: The Montreal Convention 1999 (2005), at 99–100. 54 Montreal Convention 1999, Art. 7(2) establishes that: the first part shall be marked ‘for the carrier’; it shall be signed by the consignor. The second part shall be marked ‘for the consignee’; it shall be signed by the consignor and by the carrier. The third part shall be signed by the carrier who shall hand it to the consignor after the cargo has been accepted. 55 Montreal Convention 1999, Art. 11(1). 56 See, Mendes de Leon and Eyskens, ‘The Montreal Convention: Analysis of Some Aspects of the Attempted Modernization and Consolidation of the Warsaw System’ (2001), at 1180.

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7.5.1 Article 17 Montreal Convention 1999 Article 17 of the Montreal Convention 1999 states: The carrier is liable for damage sustained in case of death and bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.57 The provision of Article 17 of the Montreal Convention 1999 is arguably one of the most crucial norm of the whole international legal regime concerning air carrier liability. Pursuant to such norms, the applicability of the Convention – and therefore the establishment of carrier liability – is subject to the existence of certain conditions: • There must be an accident; • The accident must cause the damage; • The damage must result from the death or bodily injury of the passenger; and • The accident must occur on board the aircraft or during embarkation or disembarkation. As a result, it seems evident that a scrupulous scrutiny of the terminology stands at the centre of the courts’ interpretative activity.

Did You Know? The wording of Article 17 of the Montreal Convention 1999 slightly differs from that of Article 17 of the Warsaw Convention 1929, which reads as follows: The carrier is liable for damage sustained in the ‘event’ of the death or ‘wounding’ of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. The terms ‘event’ and ‘wounding […] or any other bodily injury’ have been respectively replaced by the expressions ‘accident’ and ‘bodily injury’. As will be shown, ‘bodily injury’ has been found to more fittingly reflect the official French version of the Warsaw Convention 1929, which included the term ‘lésion corporelle’. This terminological dispute has given rise to myriad of decisions by national courts with respect to the admissibility of mental damage. On the other hand, the term ‘accident’ seems to narrow the potential extent of the term ‘event’. However, this does not raise relevant differences.

57 Montreal Convention 1999, Art. 17(1).

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The terminological differences do not significantly impact the interpretation and application of the provision. As a result, jurisprudence developed under the Warsaw Convention 1929 will provide useful guidance.

The next sections are dedicated to individually analysing the requirements of Article 17 Montreal Convention 1999 and the courts’ decisions rendered with regard to both this Convention and the Warsaw Convention 1929.

7.5.2 Accident Under the Warsaw Convention 1929 and the Montreal Convention 1999, a carrier can be held liable only if an accident has occurred. An accident has been defined as an “event, a physical circumstance that occurs unexpectedly, which takes place not in accordance with the usual course of things”.58 The accident must be unusual and not inherent to the normal operation of an aircraft. Furthermore, as found in Saks v. Air France, the accident must also be external to the passenger. In this case, the passenger claimed that she had become permanently deaf in one of her ears due to cabin pressure. The event was not found to constitute an accident, as the term accident does not include the passenger’s particular or peculiar reaction to the normal operation of the aircraft.59 Similarly, the death of a passenger due to chronic asthma conditions is not an accident under Article 17 of the Warsaw Convention 1929.60 The accident must be: • unusual; • unexpected;61 and • external to the passenger.62

58 Saks v. Air France, 724 F.2d 1383 (9th Cir. 1984), rev’d 470 U.S. 392 (1985). See, among others, Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (2000), at 80. 59 See, Dempsey and Milde, International Air Carrier Liability: The Montreal Convention 1999 (2005), at 136. 60 Hipolito v. Northwest Airlines, Inc., No. 00–2381, 2001, WL 861984 (4th Cir. 2001). 61 The term unexpected must be linked to cause of the death or the injury, rather than to the occurrence of the injury itself. Price v. British Airways 23 Avi. 18465 (D.C.N.Y. 1992). In another case, a passenger was sexually molested by another passenger during the flight. However, this was not an “accident”, since, prior to the incidents the claimant has not spoken to her assailant, was not touched by him and did not complain or report to aircraft personnel. Wallace v. Korean Air, 26 Avi. 16329 (D.C.N.Y. 1999). 62 A passenger who spilled coffee on his lap, severely burning his abdomen and groin area because he was served a cup of coffee, which was too hot has not suffered an accident under Article 17 of the Warsaw Convention 1929. Medina v. American Airlines, Inc. 31 Avi. 18306 (S.D. Fla 2006). See also, George N. Tompkins Jr., ‘Article 17 and the Warsaw Convention – When is an “Accident” not an Article 17 Compensable “Accident” ’?, 32 Air & Space Law 3 (2007), at 228–229.

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CONTRACTUAL LIABILITY Notwithstanding such classification, unusual events, such as terrorist attacks and aircraft hijackings have been deemed by various national courts to be accidents under international law.63 The accident must be aviation related. It must derive from a risk inherent to the characteristics of air travel.64 Passengers falling or being injured due to the regular arrangement of the seats or due to equipment installed on the aircraft have not been involved in an accident.65 Occurrences, which are internal to the passengers, such as the development of deep vein thrombosis on intercontinental flights have consistently been considered to fall under the term ‘accident’ of Article 17 of the Montreal Convention 1999.66

7.5.3  Causal Link between the Accident and the Damage Causation is usually a question of fact. Accordingly, the passenger or plaintiff shall be able to demonstrate that there is some link between the unexpected, unusual and external events causing the accident and the damage.67 Otherwise said, the accident must be the proximate cause of the death or injury. If the passenger suffered from a pre-­existing injury, an accident does not exist under Article 17 of the Montreal Convention 1999, nor under the Warsaw Convention 1929, as it must necessarily be the unexpected and unusual events causing the accident to trigger the death or the injury.68 In line with this interpretation, the death of a passenger, who had experienced hijacking, but died of heart attack only a day later, was not found to be an accident.69 Omissions by crew members, which have given rise to the death of passengers suffering from critical health conditions, have been found to be accidents, as the refusal from the crew to assist a passengers who requested assistance is an unexpected and unusual event.70

63 See, among others, Day v. Trans World Airlines, 528 F.2d 31 (2nd Cir. 1975); Husserl v. Swissair, 351 F.Supp. 702 (S.D.N.Y. 1972); Teichner v. Air France, 1985 RFDA 232 (Supreme Court of Israel 1984); Ayache v. Air France, 1984 RFDA 450 (T.G.I. Paris 1984). 64 See, Havel and Sanchez, Principles and Practice of International Aviation Law (2014), at 285. See, the case of Stone v. Continental Airlines, Inc., 905 F. Supp. 823 (D. Haw. 1995). 65 Potter v. Delta Air Lines, Inc., 98 F.3d 881 (5th Cir. 1996). 66 See, for instance, Wolf Müller-Rostin, ‘DVT Claim Dismissed by German Court’, 27 Air & Space Law 2 (2002), at 151–156; George N. Tompkins Jr., ‘Deep Vein Thrombosis (DVT) and Air Carrier Legal Liability – The Myth and the Law’, 26 Air & Space Law 4/5 (2001), at 231–235; Amanda K. Morse, ‘Airline Liability – The Warsaw Convention – Ninth Circuit Rules Passenger’s Development of Deep-Vein Thrombosis is Not an Accident under the Warsaw Convention: Rodriguez v. Ansett Australia Ltd.’, 70 Journal of Air Law and Commerce 1 (2005), at 123–130. 67 See, Mendes de Leon, Introduction to Air Law (2017), at 192. 68 See, MacDonald v. Air Canada, 439 F.2d 1402 (1st Cir. 1971). 69 Sakaria v. Trans World Airlines, 8 F.3d 164 (4th Cir. 1993). 70 See, Husain v. Olympic Airways, 541 US 1007, 157 L.Ed. 2d 1146, 124 US Supreme Court 1221 (2003). This case is carefully scrutinised, also in view of previous analogous – and conflicting – decisions, in Dempsey and Milde, International Air Carrier Liability: The Montreal Convention 1999 (2005), at 151.

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7.5.4  Death or Bodily Injury Article 17 of the Montreal Convention 1999 affirms that the carrier is liable for damage sustained in case of death or bodily injury of a passenger. Such specification further restricts the material scope of application of the Convention itself.

Did You Know? The term ‘death’ has not raised significant issues since the Warsaw Convention 1929’s entry into force. Death is defined, in legal terms, as “(i) irreversible cessation of circulatory and respiratory functions; or (ii) irreversible cessation of all functions of the entire brain”.71 Interesting issues arise with respect to whether missing passengers equate to dead passengers, such as the atrocious destiny of the Malaysian Flight MH370, which lost contact and disappeared while flying from Kuala Lumpur, Malaysia, to Beijing, China.72 The theoretical problem regarding missing passengers is mitigated by the fact that in almost all national civil laws, a missing person is presumptively considered dead after a period of time, usually two years (as in the United States and many European jurisdictions). It must also be noted that the regulation concerning the right to submit a civil claim in case of death on behalf of the deceased party, that is, the passenger, is covered by national law.73

The expression ‘bodily injury’ has been the subject of debate in numerous judicial disputes. ‘Bodily injury’ must mostly be construed in contraposition with ‘psychic’ or ‘mental’ injury. The value of the provision of Article 17 cannot be underestimated as even if an accident were to be found to occur, the carrier would not be liable if the accident has not caused death or bodily injury. As a general rule, mental or psychic stand-­alone damage, including mental anguish are not recoverable under the Montreal Convention 1999.74 This means that there must be at least evidence of bodily, meaning physical injury. Recover for psychiatric conditions can be sought only if such conditions are proved to be “an expression of physical injury to the brain, central nervous system or any other component of the body caused by the accident”.75

71 Ariane Lewis, ‘Shouldn’t Dead be Dead?: The Search for a Uniform Definition of Death’, 45 Journal of Law, Medicine & Ethics 1 (2017), at 112–128. 72 See, interestingly on this matter, Deijan Kong and Qihuai Zhang, ‘Civil Procedure Issues in the Lawsuits of MH370 in China: Jurisdiction and Limitation of Action’, 15 Aviation & Space Journal 4 (2015), at 2–11. 73 See, Petrus P.C. Haanappel, ‘The Right to Sue in Death Cases under the Warsaw Convention’, 6 Air & Space Law 2 (1981), at 66–78. 74 Booker v. BWIA West Indies Airways Ltd., 32 Avi. 15, 134 (E.D.N.Y. 2007). 75 Morris v. KLM Royal Dutch Airlines, English Court of Appeal, UKHL 7, 2 All ER 565 (2002).

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CONTRACTUAL LIABILITY United States courts have been rather generous in awarding mental and non-­purelyphysical damage when applying the Warsaw Convention 1929.76 Mental injury can only be compensated if they flow from a physical injury.77 Moreover, there must be some causal connection between the physical injuries and the psychological damage.78 Occasionally, courts from other countries also awarded pure mental damage in application of Warsaw or Montreal Convention 1999.79 A textual interpretation of both the conventions, along with a teleological reference to the original French version of the Warsaw Convention 1929, which explicitly refers to ‘lésion corporelle’, seems to decisively suggest that mental damage is not compensable under international private aviation law.80

7.5.5 Embarkation and Disembarkation The Montreal Convention 1999 and the Warsaw Convention 1929 require that the accident must have occurred on board or during the operation of embarking or disembarking in order for carrier liability to be established. While ‘on board’ implies the physical presence of the passenger on the aircraft and does not raise significant questions, embarkation and disembarkation are, however, not defined. Interestingly, the wording “in the course of any of the operations of embarking or disembarking” relate both to the temporal and geographical dimension. Accordingly, a number of elements may contribute in the identification of whether the passenger is or not embarking/ disembarking: • Where the passenger is at the time of the accident; • What the passenger is doing at the time of the accident; • The imminence of boarding and the physical proximity to the gate; and • If, and to what extent, the carrier can exercise control over the passenger and his/her activities.

76 See, as seminal case on this point: Floyd v. Eastern Airlines, 499 US 530, 111 US Supreme Court 1489 (1991). See, Georgette Miller, Liability in International Air Transport (Kluwer Law International, 1977), at 122 et seq; Mendes de Leon, Introduction to Air Law (2017), at 204–206; ­Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (2000), at 75–80. 77 Husserl v. Swissair Co. Ltd., 351 F.Supp. 702 (D.C.N.Y. 1972) 485 F.2d 1240 (2nd Cir. 1973). 78 In a case brought before a United States court, a passenger, who was evacuated from an aircraft due to smoke, was struck by another passenger and eventually injured himself, could not be compensated for the nightmares, panic attacks and sexual dysfunction he started having following the incident. Alvarez v. American Airlines, Inc., 27 Avi. 17475 (D.C.N.Y. 2000). See, Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (2000), at 78. 79 See, for instance, Teichner v. Air France, 1985 RFDA 232 (Supreme Court of Israel 1984). 80 Rita Garcia-Bennett, ‘Psychological Injuries under Article 17 of the Warsaw Convention’, 26 Air & Space Law 1 (2001), at 50–52.

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CONTRACTUAL LIABILITY It follows that a passenger who has just reached the airport by taxi and is walking in a bookstore, but has not even checked-­in yet, cannot be considered in the process of embarking. Moreover, online check-­in operations, which are commonly used worldwide today, do not imply an earlier start of ‘operations of embarking’. Similarly, a passenger suffering an injury on an escalator while walking between boarding gates at a major international airport is not embarking/disembarking.81 Whether the carrier exercises control over the passenger is relevant. It raises complex questions with respect to disembarkation, since these operations are generally shorter. Passengers who have been asked to wait in a lounge connected to the finger and have already been asked to show their boarding passes before actually boarding the aircraft are under the control of the carrier. Passengers who have disembarked the aircraft, but are required to board a bus to safely reach the terminal, are ‘disembarking’, as they are under the control and supervision of the airline.82

7.5.6  Damage to Baggage Article 17(2) of the Montreal Convention 1999 provides that the carrier is also liable for damage sustained in the event of destruction, loss or damage to checked baggage, if such event occurred while on board the aircraft or while the baggage was in the carrier’s control. Liability of the carrier is waived if the damage results from the inherent defect, quality or vice of the baggage.83 However, irregular or defective package does not provide a valid defence for the carrier.84 Furthermore, the passenger can exercise his rights under the Montreal Convention 1999, if the carrier admits the loss of the baggage, or if this arrives at destination later than 21 days. The regime for unchecked baggage, which includes hand-­ luggage, encompassed in Article 17(2) of the Montreal Convention 1999 differs, as the carrier is liable only should the damage result “from its fault or that of its servants or agents”. In other words, a passenger can recover damage suffered from destruction, loss or damage to a hand luggage if he is able to prove that the carrier inflicted the damage with the element of fault.

Did You Know? Liability regime for baggage is included in Article 18 of the Warsaw Convention 1929, along with that concerning ‘goods’, such as cargo. Article 17(2) and (3) of the Montreal Convention 1999 fittingly conform to the provisions of the Warsaw Convention 1929. The defence available to the carrier,

81 See, for instance, Dick. V. American Airlines, Inc., 476 F.Supp. 2d 61 (D. Mass. 2007). Accidents occurring at lounges are not covered by the Montreal Convention 1999 and the Warsaw Convention 1929. See, Nicoli v. Air France, 1971 RFDA 173 (C.A. Paris, 1971). See also, Roger Harris, ‘Warsaw Convention: Disembarking in the United Kingdom’, 42 ZLW 3 (1993), at 148–150. 82 Ricotta v. Iberia, 482 F. Supp. 497 (D.C.N.Y. 1990). 83 Montreal Convention 1999, Art. 17(2). 84 See, Mendes de Leon and Eyskens, ‘The Montreal Convention: Analysis of Some Aspects of the Attempted Modernization and Consolidation of the Warsaw System’ (2001), at 1174.

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which concerns inherent defects, quality or vice of the baggage, is a legacy of the Guatemala City Protocol 1971. The Warsaw Convention 1929 only encompasses ‘registered baggage’ and, therefore, baggage belonging to passenger, which is not registered, is not covered by the Convention.85

7.6 Two-­Tier Liability Regime of the Montreal Convention 1999 7.6.1 Limited, but Strict, Liability If Article 17 provides that the carrier is liable if the conditions contained thereto are met, the provision of Article 21 of the Montreal Convention 1999 explicitly clarifies ‘the extent’ of this liability. In particular, a regime of strict liability is established for damage not exceeding SDR 100,000 (now SDR 113,100).86 Accordingly, the carrier “shall not be able to exclude or limit its liability”.87 In July 2019, the ICAO proposed a 13.9 per cent increase to these limits, following completion of its quinquennial review: • • • •

Injury/death: 128,821 SDRs Delay: 5,346 SDRs Damage to baggage: 1,288 SDRs Damage to cargo: 22 SDRs per kg

These limits will be applicable as of December 2019.

Did You Know? Special Drawing Rights (SDR) consists of an international fiduciary asset created in 1969 by the International Monetary Fund (IMF ). The SDR was adopted to replace (Poincaré) franc in use since the adoption of the Warsaw Convention 1929.88 The fact that (Poincaré) francs were to be determined by reference to the value of gold, pursuant to Article 22 of the Warsaw Convention 1929, raised issues as fluctuations in the price of gold were seen as undermining the uniformity that the Convention itself aimed to achieve. SDR, on the contrary, is a unity of account that is completely detached from the price of gold. 85 See, Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (2000), at 90. 86 As of 2019. Montreal Convention 1999, Article 24 provides a detailed scheme for review of liability limits. 87 Montreal Convention 1999, Art. 21. 88 See, among others, Patricia Barlow, ‘Article 22 of the Warsaw Convention: in a State of Limbo’, 8 Air & Space Law 1 (1983), at 2–30; Wolf Müller-Rostin, ‘Diplomatic Conference on the Modernization of the Warsaw Convention’, 48 ZLW 3 (1999), at 324–339; Peter Martin, ‘The Price of Gold and the Warsaw Convention’, 4 Air & Space Law 2 (1979), at 70–76.

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   As of August 2019, SDR 1 equals to:

 EUR 1.24  USD 1.37  CAD 1.81  JPY 147.08  GBP 1.13 The value of the SDR is based on a basket of five currencies: the USD, EUR, CNY, JPY and GBP. The SDR value in terms of the USD is determined daily, based on the spot exchange rates observed at around noon London time, and posted on the International Monetary Fund website.89

Carrier liability under Article 21(1) of the Montreal Convention 1999 is strict, that is, presumed. The passenger, or the claimant in the event of death, shall indeed prove: • That the passenger sustained damage (death or bodily injury) resulting from an accident under the wording of Article 17, as analysed above; • The extent of the actual damage suffered, as SDR 100,000 is only a limit and not an automatic lump sum recognisable under any circumstances. This liability shall, however, in no way be interpreted as an absolute liability, as, pursuant to Article 20 of the Montreal Convention 1999, the carrier can be exonerated from its liability if proving contributory negligence or wrongful act of the passenger.90 If the carrier proves that the damage was caused or contributed to by the negligence or other wrongful act or omission of the [passenger], the carrier shall be wholly or partly exonerated from its liability to the claimant to the extent that such negligence or wrongful act or omission caused or contributed to the damage.91 However, the ‘contributory negligence defence’ has commonly been seen as a burdensome mechanism for carriers that may not always be able to provide evidence of contributory actions of the passenger. 89 See, International Monetary Fund (IMF), ‘Special Drawing Right (SDR)’, www.imf.org/en/About/ Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR. 90 See, among others, Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 294; Dempsey and Milde, International Air Carrier Liability: The Montreal Convention 1999 (2005), at 181–183; Andemariam, ‘Does the Montreal Convention 1999 Require that a Notice be Given to Passengers? What is the Validity of Notice of a Choice of Forum Clause Under Montreal 1999?’ (2006), at 252–255. 91 Montreal Convention 1999, Art. 20.

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7.6.2 Exposure to Unlimited Liability  The second tier of liability is enshrined in Article 21(2) of the Montreal Convention 1999 and exposes the carrier to unlimited monetary liability for damage exceeding the amount of SDR 100,000 (SDR 113,100). The carrier can escape unlimited liability if it proves one of the following:92 • That the damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or • That the damage was solely due to the negligence or other wrongful act or omission of a third party. The burden of proof is on the carrier. This has been subject to scepticism and criticism in doctrine.93 However, it shall be noted that the above defences under Article 21(2) of the Montreal Convention 1999 have found very little application in practice and have rarely been invoked.

Did You Know? Article 22 of the Warsaw Convention 1929 provides that the liability of the carrier for each passenger is limited to the following sums:

 125,000 francs for each passenger;  250 francs per kilogramme in the case of checked baggage and goods; and  5,000 francs for objects that the passenger takes charge of himself. These limits were subsequently amended by The Hague Protocol 1955 and the Guatemala City Protocol 1971, which, respectively, raised the limit of 125,000 francs to 250,000 and 1,500,000 francs.

The significant innovation of the Montreal Convention 1999 relating to potentially unlimited liability was accompanied by the requirement for the carrier to acquire mandatory insurance.94 In the context of combined carriage, as defined in Article 39 of the Montreal Convention 1999,95 a regime of mutual liability is established for the contracting and the actual carriers 92 Montreal Convention 1999, Art. 21(2). 93 See, for instance, Thomas J. Whalen, ‘The New Warsaw Convention: The Montreal Convention’, 25 Air & Space Law 1 (2000), at 12–26; Bin Cheng, ‘1999 Montreal Convention on International Carriage by Air Concluded on the Seventieth Anniversary of the 1929 Warsaw Convention’, 49 ZLW 4 (2000), at 484–488. 94 See, Chapter 9. 95 See, Section 7.3.1.

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CONTRACTUAL LIABILITY that are, therefore, jointly liable with regard to accidents occurring in accordance with Article 17 of the Montreal Convention 1999.96 However, the actual carrier cannot be subject to liability exceeding the limits set out in Articles 21, 22, 23 and 24 of the Montreal Convention 1999. Importantly, while carriers are entitled to stipulate higher liability limits – or even abolish them,97 “any provision tending to relieve the carrier of liability or to fix a lower limit […] shall be null and void”.98 Therefore, an attempt to waive liability, such as through a liability waiver, shall be incompatible with the Montreal Convention 1999.

7.7  Carrier Liability in Case of Delay Delay in the carriage by air may result in liability for the carrier. Article 19 of the Montreal Convention 1999 posits carrier liability for “damage occasioned by delay”. The provision equally applies to delay concerning passengers, baggage and cargo. The Montreal Convention 1999, however, offers two potential defences to the carrier, which shall indeed not be liable if it proves that: • the person claiming compensation negligently contributed to or wrongfully caused the damage (exoneration of Article 20 above); or • “that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures”.99 In particular, the latter exculpation clause was inserted in Article 19 of the Montreal Convention 1999, as a similar – but not identical – formulation was originally encompassed in Article 20 of the Warsaw Convention 1929.100 On this reformulation, commentators have argued that the original phrasing of the Warsaw Convention 1929 “all necessary measures”

 96 Montreal Convention 1999, Art. 41 establishes that: The acts and omissions of the actual carrier and of its servants and agents acting within the scope of their employment shall, in relation to the carriage performed by the actual carrier, be deemed to be also those of the contracting carrier. The acts and omissions of the contracting carrier and of its servants and agents acting within the scope of their employment shall, in relation to the carriage performed by the actual carrier, be deemed to be also those of the actual carrier. Nevertheless, no such act or omission shall subject the actual carrier to liability exceeding the amounts referred to in Articles 21, 22, 23 and 24. Any special agreement under which the contracting carrier assumes obligations not imposed by this Convention or any waiver of rights or defences conferred by this Convention or any special declaration of interest in delivery at destination contemplated in Article 22 shall not affect the actual carrier unless agreed to by it.  97 Montreal Convention 1999, Art 25.  98 Montreal Convention 1999, Art. 26.  99 Montreal Convention 1999, Art. 19. 100 Warsaw Convention 1929, Art. 20(1) reads as follows: “The carrier is not liable if he proves that he and his agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures”.

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Did You Know? Neither the Montreal Convention 1999 nor the Warsaw Convention 1929 provides a definition of delay. The concept of delay itself is strongly connected to the aviation technological development. However, notwithstanding speed being the typical characteristic of air transport, air carriers are entitled to delineate their timetables in an approximate manner.102 Delay occurs when passengers, baggage and goods do not arrive at their destination at the time indicated in the contract of carriage.103    In legal terms, delay constitutes a misfeasance of the contract of carriage by air, that is, the contract has been executed, but not in accordance with the terms convened therein.104 In this context, delay shall be logically distinguished from, for example, flight cancellation, which amounts to a non-­performance of the contract.

Liability arising from delay in the carriage of persons is limited to SDR 4,150.105 Limitations also apply with respect to delay in the carriage of baggage (SDR 1,131).106 However, the carrier shall be unlimitedly liable if: it is proved that the damage resulted from an act or omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and with knowledge the damage would probably result.107 Furthermore, should the delay have been caused by acts or omissions of servants or agents of the carrier, it must be necessarily established that such servants or agents were acting within the scope of their contract of employment.108 101 Dempsey and Milde, International Air Carrier Liability: The Montreal Convention 1999 (2005), at 177. Under the Warsaw Convention, the expression “all reasonably measures” has been described in United States jurisprudence as “all precautions that in sum are appropriate to the risk, i.e., measures reasonably available to defendant and reasonably calculated, in cumulation, to prevent the subject loss”. See, Mfrs. Hanover Trust Co. v. Alitalia Airlines, 429 F. Supp. 964 (D.C.N.Y. 1977), 967. 102 Isabelle H.P.H. Diederiks-Verschoor, ‘The Liability for Delay in Air Transport’, 26 Air & Space Law 6 (2001), at 301. 103 Ibid. 104 See, for instance, Petrus P.C. Haanappel, ‘Compensation for Denied Boarding, Flight Delays and Cancellations Revisited’, 62 ZLW 1 (2013), at 48. 105 Montreal Convention 1999, Art. 22(1). As of March 2019, this limit would equal to EUR 5,110. 106 Montreal Convention 1999, Art. 22(2). Such limitations, however, are not lex specialis with respect to delay, but apply also in case of damage, destruction or loss. As of August 2019, the limit amount to EUR 1,231. 107 Montreal Convention 1999, Art. 22(5). 108 Ibid. See, in doctrine, Bin Cheng, ‘Wilful Misconduct: From Warsaw to The Hague and from Brussels to Paris’, 2 Annals of Air and Space Law (1977), at 84.

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7.8 Liability Regime Concerning the Carriage of Cargo As to cargo, the Montreal Convention 1999 stands as the legacy of the Montreal Additional Protocol 4, as identified above.109 Unique in the entire liability regime concerning carriage by air is the provision under Article 34 of the Montreal Convention 1999, which offers the opportunity of arbitration for disputes relating to the liability of the carrier in the context of carriage of cargo.110 Article 18 of the Montreal Convention 1999 prescribes two requisites for the establishment of liability for the carrier, a temporal and a material one. First, the damage shall occur “during the carriage by air”.111 This expression is defined in the same provision as “the period during which the cargo is in the charge of the carrier”.112 The objective element refers to the fact that Article 18 only applies in cases of destruction, loss or damage to cargo. The carrier can be, totally or partially, exonerated from its liability if it proves that the destruction, loss or damage to cargo resulted from: • Inherent defect, quality or vice of the cargo; • Defective packing of the cargo performed by a person other than the carrier or its servants or agents; • An act of war or an armed conflict; or • An act of public authority carried out in connection with the entry, exit or transit of the cargo.113 The right to claim compensation under the Montreal Convention 1999 is only granted to the consignor and consignee, as explicitly mentioned in the air waybill.114 It naturally follows that the burden of proof is on the claimant, who must also provide evidence of the lost cargo. Interestingly, as a general rule, Article 18 of the Montreal Convention 1999 exclusively covers carriage by air and is not applicable to transportation by land, sea or inland waterway performed outside an airport, where the carrier is evidently no longer in charge of the cargo.115

109 See, Chapter 7. 110 Ibid., Art. 34 establishes that: […] the parties to the contract of carriage for cargo may stipulate that any dispute relating to the liability of the carrier under this Convention shall be settled by arbitration. Such agreement shall be in writing. The arbitration proceedings shall, at the option of the claimant, take place within one of the jurisdictions referred to in Article 33. The arbitrator or arbitration tribunal shall apply the provisions of this Convention. 111 Montreal Convention 1999, Art. 18(1). 112 Ibid., Art. 18(3). 113 Ibid., Art. 18(2). 114 See, Mendes de Leon, Introduction to Air Law (2017), at 227. 115 Victoria Sales Corp. v. Emery Air Freight, Inc., 917 F. 2d 705 (2d Cir. 1990). See, for reference, Montreal Convention 1999, Art. 18(4).

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CONTRACTUAL LIABILITY In the carriage of cargo, carrier liability is limited to the amount of SDR 17 per kilogramme (now SDR 19).116 This amount can only be exceeded in the event the parties to the contract of carriage of cargo have concluded a special agreement, a so-­called ‘special declaration of interest’, whereby it has been determined as a greater value of the cargo, and upon the payment of a supplementary sum by the consignor.117

Did You Know? Jurisprudence and practice have determined that the limits of liability protection air carriers in the carriage of cargo, enshrined in Article 18 of the Montreal Convention 1999 and Article 22 of the Warsaw Convention 1929, may be extended to third parties, such as ground handling agents. The famous Article 8 of the IATA Standard Ground Handling Agreement118 provides that a handling company is only liable in relation to the airline if the damage rose from an act or an omission of the handler done with the intent to cause damage or recklessly with the knowledge that such damage would probably result.119

In accordance with the special regime introduced by the Montreal Additional Protocol No. 4, the liability limits for carriage of cargo are unbreakable.120 Besides this, various courts have found the provisions of Article 18 of the Montreal Convention 1999 to not only refer to physical damage, but to also cover economic losses that arise from such damage.121

7.9 Exclusivity Principle Article 29 of the Montreal Convention 1999 establishes the right of action and the legal basis under which a plaintiff can bring a claim under this Convention. According to this provisions: 116 Montreal Convention 1999, Art. 22. As of March 2019, SDR 19 approximately equals to EUR 23. 117 Ibid. 118 The latest version was published in 2018 and is available on IATA’s website. 119 IATA Standard Ground Handling Agreement, Art. 8 reads as follows: […] the carrier shall not make any claim against the handling company and shall indemnify against any legal liability for claims or suits including costs and expenses incidental thereto, in respect of (a) delay, injury or death of persons carried or to be carried by the carrier; (b) injury or death of any employee of the carrier; (c) damage to or delay of baggage, cargo or mail carried or to be carried by the carrier; and (d) damage to or loss of property owned or operated by, or on behalf of, the carrier and any consequential loss or damage; arising from an act or omission of the handling company in the performance of this agreement. See, for a detailed analysis on the point, Mendes de Leon, Introduction to Air Law (2017), at 231–236. 120 Article 8 of the Montreal Additional Protocol No. 4 amended Article 24 of the Warsaw Convention 1929 to the extent that: “Such limits of liability constitute the maximum limits and may not be exceeded whatever the circumstances, which gave rise to the liability, were”. 121 See, for instance, Kesel v. UPS, US District 12350 (N.D. Cal. 2002); Vinotica v. Air New Zealand Ltd. [2004] DCR 2086.

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CONTRACTUAL LIABILITY […] any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention […].122 In other words, should applicability of the Montreal Convention 1999 be established in a particular case, the carrier will either be only liable in accordance with the terms of the Convention or “not liable at all”.123

Did You Know? The ‘exclusivity’ of the Montreal Convention 1999 is mirrored in the Warsaw Convention 1929. The relevant provision is Article 24 of the Warsaw Convention 1929, which affirms that: “In the cases covered by Articles 18 and 19 any action for damages, however founded, can only be brought subject to the conditions and limits set out in this Convention”.124 While no significant changes were brought by The Hague Protocol 1955, the strictly legal wording “in contract or tort or otherwise”, now part of the Montreal Convention 1999, was added by way of the Guatemala City Protocol 1971.

The principle of exclusivity as provided by both conventions has been subject to endless debate and copious jurisprudence, culminating in the development of an ‘absolute exclusivity’ approach, according to which no independent remedy is offered to a passenger, as if either of the conventions is applicable, a claim can only be submitted under the terms and conditions of the applicable convention.125 Accordingly, the causes of action created by Article 29 of the Montreal Convention 1999 and Article 24 of the Warsaw Convention 1929 are exclusive and do not include any other causes of action, including those based on national or local law.126 The landmark decision concerning exclusivity was rendered by the United States Supreme Court in the case Tseng v. EL AL Israel Airlines,127 whereby the Court, in applying Article 24 of the Warsaw Convention 1929, held that the Warsaw Convention 1929 precludes a claimant from seeking compensation for personal injury damages under local law

122 Montreal Convention 1999, Art. 29. 123 Mendes de Leon, Introduction to Air Law (2017), at 172. 124 Warsaw Convention 1929, Art. 24. 125 See, Ramya Sankaran and Nivedita Raju, ‘Pioneering for Rights of the Differently Abled: Scope under the Montreal Convention’, 41 Air & Space Law 3 (2016), at 265–288. 126 See, for instance, Whalen, ‘The New Warsaw Convention: The Montreal Convention’ (2000), 20–22; Sonja Radošević, ‘CJEU’s Decision in Nelson and Others in Light of the Exclusivity of the Montreal Convention’, 38 Air & Space Law 2 (2013), at 96–98. 127 Tseng v. EL AL Israel Airlines Ltd., 525 US Supreme Court 155 (1999).

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CONTRACTUAL LIABILITY when the claim does not fall under the same Convention.128 The passenger does not have access to any other remedies available within a particular jurisdiction.129 Exclusivity has also received attention in other jurisdictions, including, for instance, the United Kingdom and Canada, where decisions have been rendered in favour of an absolute primacy of the exclusivity principle in the regulation of carrier liability under international law. In Sidhu v. British Airways,130 the United Kingdom House of Lords found that liability of the carrier can only be based upon the provisions of [in that case] the Warsaw Convention 1929. Similarly, the Supreme Court of Canada found, in many occasions, that if a damage does not fall under those conceived in the Montreal Convention 1999 or Warsaw Convention 1929, the passenger cannot invoke such legal regime.131 Examples of claims that are precluded from the Warsaw/Montreal System include, but are not limited to: • Claims relating to inter alia flight cancellation or non-­performance of the contract of carriage by air;132 • Claims concerning particular circumstances of air travel for disabled persons and persons with reduced mobility;133 • Claims brought against manufacturers, lessors, air navigation services providers or airports. While, to date, the principle of exclusivity has been confirmed and reiterated in the vast majority of jurisdictions, with United States courts being the most proactive in this regard, it must be noted that some courts, for instance, in Latin America, South-­East Asia and, occasionally, in the EU, have adopted a rather broad interpretation of the above concept allowing independent causes of actions under the Montreal/Warsaw System. The last part of Article 29 of the Montreal Convention 1999 has introduced a significant provision, according to which recovery of punitive, exemplary and other non-­compensatory damages is not allowed under the Convention.134 128 Ibid. 129 See, among others, Sakaria v. Trans World Airlines, 8 F.3d 164 (4th Cir. 1993); Demarines v. KLM Royal Dutch Airlines, 580 F. 2d 1193 (3rd Cir. 1978); Warshaw v. Trans World Airlines Inc., 442 F.Supp. 400 (E.D. Pa. 1977); Loyd v. American Airlines Inc., F.3rd 503 (8th Cir. 2002). 130 Sidhu and Other v. British Airways PLC [1997], A.C. 430 (H.L.). The passenger, who was flying from London, United Kingdom, to Kuala Lumpur, Malaysia, via Kuwait City, Kuwait, was retained in Kuwait, after the aircraft refuelled there, and taken as prisoner to Iraq by Iraqi forces. She claimed to have suffered psychological and mental damage due to the event. It was then found that no accident under Article 17 of the Warsaw Convention materialised. Furthermore, the House of Lords held that loss, injury and damage arising out of international carriage by air constitute the exclusive causes of action under the Convention. 131 See, Thibodeau v. Air Canada, 2012 FCA 246 (2012); Hook v. British Airways, EWHC 379 (Quebec) (2011). 132 Mullaney v. Delta Air Lines, Civ. No. 7324, 2009 WL 1584899 (S.D.N.Y. 2009); see also, ­Diederiks-Verschoor, ‘The Liability for Delay in Air Transport’ (2001), at 300–314. 133 See, Stott v. Thomas Cook Tour Operator Ltd., 2 All ER 409 (2014). 134 Montreal Convention 1999, Art. 29.

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CONTRACTUAL LIABILITY Finally, both the Montreal Convention 1999 and the Warsaw Convention 1929 provide for a temporal limitation with regard to the right to act. Article 35 of the Montreal Convention 1999, almost integrally confirming the wording of Article 29 of the Warsaw Convention 1929,135 sets such limit at two years. The right of action under the two regimes starts from: • The date of arrival at destination (as stated in the relevant documentation) • The date on which the aircraft ought to have arrived • The date on which the carriage stopped Once the limitation period of two years has passed, the claimant’s right is extinguished.

7.10 Jurisdiction International private law and, for the purpose of this book, international private aviation law is inherently concerned with the question as to where a claimant can file a lawsuit. In international carriage by air, a high number of elements could in a way connect the carriage to the simultaneous jurisdiction of different States.136 Article 33 of the Montreal Convention 1999 lists the following alternative137 places of jurisdiction: • The court of the domicile of the carrier; • The court of the principal place of business of the carrier; • The court where the carrier has a place of business through which the contract has been made; • The court at the place of destination; or • The court at the place where the passenger has his/her principal and permanent residence at the time of the accident, if certain conditions are fulfilled. In the field of jurisdiction, the Montreal Convention 1999 has integrally confirmed what was already stated in the Warsaw Convention 1929 (first four jurisdictions), with the addition of a fifth place of jurisdiction, which will be discussed below. 135 Warsaw Convention 1929, Art. 29: The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped. The method of calculating the period of limitation shall be determined by the law of the Court seised of the case. 136 Giselle Deiró, ‘Jurisdiction and Conflicts of Laws in Contracts of International Carriage by Air’, 37 Air & Space Law 4/5 (2012), at 337. 137 Both Article 33 of the Montreal Convention 1999 and Article 28 of the Warsaw Convention 1929 provide that an action shall be brought “at the option of the plaintiff” in one of the fora provided for thereto.

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7.10.1  Court of the Domicile of the Carrier The term domicile is not defined in the Montreal Convention 1999 nor in the Warsaw Convention 1929 and, therefore, determination of its exact meaning is left to national law. Furthermore, the inclusion of both criteria of domicile and principal place of business may be seen as suggesting that the first forum of jurisdiction (domicile of the carrier) may intend to provide a solution in the event the carrier is an individual, as opposed to big and international corporations.138 With respect to corporations, in both common and civil law jurisdictions, the domicile coincides, albeit in a slightly different manner, with its place of incorporation.139

7.10.2  Court of the Principal Place of Business of the Carrier The second ground of jurisdiction coincides with the place where the management of the airlines has its main seat. In Europe and the United Kingdom, the principal place of business is understood as the place where the airline is headquartered.140 In the United States, this forum has been interpreted to refer to the place where the manager and high-­level officers of a corporation direct, control and coordinate its activities.141 This place of jurisdiction seems to be easily identifiable. However, with the proliferation of low-­cost or budget airline business models, carriers have more – equally central – headquarters and operate from multiple bases.142

7.10.3  Court where the Carrier has a Place of Business through which the Contract has been Made The third forum of jurisdiction is intended to cover situations in which the ticket is sold by entities other than the carrier itself. Nonetheless, it has undergone a significant judicial inspection and has been variously interpreted. A first element regards the identification of a ‘place of business’, which is different from the ‘principal place of business’ as discussed above.

138 See, Georgette Miller, Liability in International Air Transport (Kluwer Law International, 1977), at 300. 139 Re Air Disaster Near Cove Neck, 774 F.Supp. 725 (1991); Wyler v. Korean Air Lines, 928 F.2d 1167 (D.D.C. 1991). 140 See, Mendes de Leon, Introduction to Air Law (2017), at 246. In France, reference is made to the expression ‘siège social’, where the central management of the company is located. 141 Friend v. Hertz Corp., 130 US Supreme Court 1181 (2010). 142 A significant instance of this phenomenon is the carrier EasyJet, having two main headquarters, located in Luton, United Kingdom, and Vienna, Austria, and operating from multiple bases in Europe, including Milan, Italy; Berlin, Germany; Amsterdam, the Netherlands; and Geneva, Switzerland. See, Andrea Trimarchi, ‘An Analysis of the Grounds of Jurisdiction and Jurisdictional Issues in Light of the Warsaw/Montreal System’, 15 Issues in Aviation Law and Policy 1 (2015), at 377–398.

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CONTRACTUAL LIABILITY A mere ticket vendor, who qualifies as an IATA agent, and sells tickets on behalf of a large number of airlines and, therefore, has not been specifically appointed by the carrier does not constitute a place of business of the carrier.143 On the other hand, the existence of a code-­share agreement, or the common membership of the same airline alliance, is a strong indication that a carrier has a place of business in the country of its code-­share or alliance partner. In Polansky v. KLM Royal Dutch Airlines,144 for instance, a United States court held that KLM had explicitly appointed Northwest to sell tickets on its behalf and had a place of business in the United States. The line of reasoning was mostly based on the fact that KLM and Northwest had a code-­share agreement in place. In France, courts have arguably gone beyond, affirming that for a claim to be submitted to the “court where the carrier has a place of business through which the contract has been made” the agent must be directly owned by the carrier.145 Cases concerning the carriage of cargo usually do not raise problems with respect to the third forum of jurisdiction. The place where the contract has been made coincides with the place where the air waybill is issued.146 Physical or electronic issue of an air waybill usually constitutes evidence of the conclusion of a contract for the purpose of jurisdiction under the Montreal Convention 1999. While a passenger can conclude a contract potentially from every location, the ‘meeting of the minds’ in a contract of carriage of cargo is deemed to take place where the air waybill is issued.

7.10.4  Court at the Place of Destination The Montreal Convention 1999 does not provide any rules as to the identification of the “lieu of destination”.147 However, courts have interpreted such an expression with an eye on the ‘international carriage by air’ definition provided in Article 1 of the Montreal Convention 1999 (and Warsaw Convention 1929). International jurisprudence has underlined that the terms agreed in the contract should prevail, regardless of the real, but undisclosed intention of the parties.148 When interpreting the provisions of Article 28 of the Warsaw Convention 1929, and Article 33 of the Montreal Convention 1999, to establish ‘local jurisdiction’, meaning the 143 Reale Mucelli v. Air New Zealand, Italian Court of Cassation, Joint Civil Chambers (2006), as reported by Giuseppe Guerrieri, ‘Etablissement (Art. 28 Warsaw Convention) Tenacity Pays’, 33 Air & Space Law 2 (2008), at 175–176. The court found that Air New Zealand did not have a place of business in Salerno, Italy, where the ticket was sold. 144 Polansky v. KLM Royal Dutch Airlines, 378 F.Supp. 2d 1222 (S.D. Cal. 2005). 145 See, for instance, Herfroy v. Cie Artop (1962) 16 RFDA 177 (C.A. Paris 1962). This orientation has been criticised in doctrine on the basis that the American and English translations of the Warsaw Convention 1929 do in no way imply an element of possession or ownership, unlike the French version, which uses the verb posséder. See, Miller, Liability in International Air Transport (1977), at 306. 146 Transvalue v. KLM Royal Dutch Airlines, 539 F.Supp. 2d 1366 (S.D. Fla. 2008). See, Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (2000), at 184–187. 147 Warsaw Convention 1929, Art. 28, original French version. 148 Klos v. Polskie Linie Lotnicze, 33 F.3d 164 (1997); Swaminathan v. Swiss Air Transport Company Ltd., 962 F.2d 387 (1992).

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CONTRACTUAL LIABILITY identification of the exact court (within a city or a county) that is entitled to hear a case, the place of destination is the place that is indicated on the ticket.149

7.10.5  Fifth Jurisdiction Article 33 (2) of the Montreal Convention 1999 introduced a fifth forum of jurisdiction: In respect of damage resulting from the death or injury of a passenger, an action may be brought before the courts […] in the territory of a State Party in which at the time of the accident the passenger has his or her principal and permanent residence and to or from which the carrier operates services for the carriage of passengers by air, either on its own aircraft or on another carrier’s aircraft pursuant to a commercial agreement, and in which that carrier conducts its business of carriage of passengers by air from premises leased or owned by the carrier itself or by another carrier with which it has a commercial agreement.150 In this context: • Commercial agreement means an agreement, other than an agency agreement, made between carriers and relating to the provision of their joint services for carriage of passengers by air; • Principal and permanent residence means the one fixed and permanent abode of the passenger at the time of the accident. The nationality of the passenger shall not be the determining factor in this regard.151 In other words, pursuant to such a provision, the plaintiff may bring an action before a court located in his home State if the carrier, at the time of the accident, operates ‘direct or indirect’ services of carriage by air in that determined country. The fifth jurisdiction is only available in the event of the death or injury of the passenger. The introduction of a fifth forum of jurisdiction was strongly promoted by the United States. A similar initiative was already launched by the United States at the time of the drafting of the Guatemala City Protocol 1971, as it seemed necessary to provide United States’ citizens with the right to sue the carrier in the court of his/her home country.152 However, some commentators have notably pointed out that the practical relevance of the fifth jurisdiction is rather limited, as plaintiffs are already given a wide choice as to whether

149 For instance, if the ticket bears as place of destination Charles de Gaulle Airport in Paris, the place of destination is Paris. As a result, the plaintiff cannot file a lawsuit in the nearby town of Orly. See, Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (2000), at 187. 150 Montreal Convention 1999, Art. 33(2). 151 Ibid., Art. 33(3). 152 See, Miller, Liability in International Air Transport (1977), at 309.

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CONTRACTUAL LIABILITY file a lawsuit under the first four fora of the Warsaw/Montreal regime.153 The application of the grounds of jurisdiction has raised significant issues – especially in the United States – with respect to the so-­called forum non-­conveniens, according to which a court may refuse jurisdiction if another court represents a more suitable forum.154

7.10.6  Concluding Remarks on Jurisdiction In conclusion, the matter of where a passenger – or his/her legal successors – can bring an action is governed by Article 28 of the Warsaw Convention 1929 and Article 33 of the Montreal Convention 1999, which offers an additional possibility to the passenger (fifth jurisdiction). Other potential conflicts of laws are identified and clarified by the conventions themselves: • What is the applicable law to the case? Pursuant to the principle of exclusivity, the only applicable law is that constituted by the Warsaw Convention 1929, where applicable to the case, or the Montreal Convention 1999, where applicable; • What is the applicable law governing the procedural matters of the case? Questions of procedure shall be governed “by the law of the court seised of the case”.155

7.11 Regional or Local Regimes Concerning Air Passenger Rights: Example of the Regulation 261/2004 The most significant instance of local legislation in the field of rights of passengers travelling by air is certainly represented by the Regulation (EC) No. 261/2004,156 which has attracted global attention, due to its wide application and controversial features. The Regulation (EC) No. 261/2004, which has replaced the earlier Council Regulation (EC) No. 295/1991,157 lays out the basic legal regime with respect to air passengers’ protection. The scope of application is delimited in two manners: geographically and materially.

153 See, among others, Bin Cheng, ‘A Fifth Jurisdiction Without Montreal Additional Protocol No. 3 and Full Compensation Without the Supplemental Compensation Plan’, 20 Air & Space Law 3 (1995), at 120; Deiró, ‘Jurisdiction and Conflicts of Laws in Contracts of International Carriage by Air’ (2012), at 348–352. 154 See, Allan I. Mendelsohn, ‘Foreign Plaintiffs, Forum Non Conveniens, and the Montreal Convention 1999’, 36 Air & Space Law 4/5 (2011), at 293–303; Nikolai P. Ehlers, ‘Forum Non Conveniens – U.S. Courts and the Dismissal of Aviation Cases’, 36 ZLW 4 (1987), at 327–350. 155 Warsaw Convention 1929, Art. 28(2); Montreal Convention 1999, Art. 33(4). 156 Regulation (EC) No. 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No. 295/91, OJ L 46, of 17 February 2004. 157 Council Regulation (EEC) No. 295/1991 establishing common rules for a denied boarding compensation system in scheduled air transport, OJ L 35, of 12 February 1991. See also, Petrus P.C. Haanappel, ‘The New EU Denied Boarding Compensation Regulation of 2004’, 54 ZLW 2 (2005), at 31–43.

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7.11.1  Geographical Scope of Application158 The Regulation applies to: • Passengers departing from an airport located in the territory of an EU Member State; and • Passengers departing from an airport located in a third country to an airport situated in the territory of an EU Member State, if the operating air carrier of the flight concerned is a Community carrier.159 For the purpose of this Regulation, non-­EU Member States, which are party to the EFTA160 and the EEA,161 are considered EU Member States. These also include Switzerland.162

Did You Know? The applicability of the Regulation (EC) 261/2004:

 A flight from Madrid, Spain to Hamburg, Germany operated by Iberia  A flight from Vienna, Austria to Geneva, Switzerland operated by EasyJet  A flight from Rome, Italy to Paris, France operated by American Airlines  A flight from New York, United States to Frankfurt, Germany operated by ­Lufthansa

The non-­applicability of the Regulation 261/2004:

 A flight from Shanghai, China to Seoul, South Korea, operated by Korean Air  A flight from Dubai, United Arab Emirates, to Paris, France operated by Emirates

 A flight from Cape Town, South Africa, to Johannesburg, South Africa operated by British Airways

 A flight from Lima, Peru, to Santiago, Chile operated by Air France

158 Regulation (EC) No. 261/2004, Art. 3. 159 Ibid. 160 Convention Establishing the European Free Trade Association, concluded in Stockholm on 4 January 1960. Parties include Norway, Switzerland, Iceland and Liechtenstein. 161 Agreement on the European Economic Area, concluded in Oporto on 2 May 1992, OJ L 1, of 3 January 1994. The EEA includes EU members and State Parties to the EFTA above. 162 See, Vincent Correia and Noura Rouissi, ‘Global, Regional and National Air Passenger Rights – Does the Patchwork Work?’, 40 Air & Space Law 2 (2015), at 123–146.

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CONTRACTUAL LIABILITY Furthermore, the Regulation is only concerned with the notion of ‘flight’, as opposed to the term ‘carriage’ adopted in the Montreal Convention 1999. As a result, a return flight from Paris, France to Lisbon, Portugal is considered as forming two distinct flights for the purpose of the Regulation. As a result, should a disruptive event occur on both segments, a passenger could seek separate compensation for each flight.

7.11.2  Material Scope of Application The Regulation applies in the event of: • Denied boarding (Article 4): Denied boarding is mainly a consequence of airline overbooking, which refers to the airline practice to accept more reservations for a flight than the available seats on an aircraft.163 Other reasons may give rise to denied boarding, including, security, safety, immigration and health reasons. These are deemed to be valid justifications for denied boarding.164 • Flight cancellation (Article 5): Cancellation means the “non-­operation of a flight which was previously planned and on which at least one place was reserved”.165 A flight is cancelled and not delayed if the passenger is carried on a flight with a new flight number.166 • Flight delay (Article 6): Flight delay is understood as the arrival of a flight beyond its schedule time of arrival at its final destination.167 The arrival of a flight coincides with the moment at which one of the doors of the aircraft is opened.168 An Air France flight from Paris, France, to London, United Kingdom, is not delayed, but cancelled, if it departs later than the next Air France Paris–London scheduled flight.169 The material scope of application of the Regulation is strictly delimited. Passengers may be entitled to compensation only in the three events described above. In other words, no other right of actions is established for passengers under Regulation 261/2004. 163 Haanappel, ‘Compensation for Denied Boarding, Flight Delays and Cancellations Revisited’ (2013), at 44; Diederiks-Verschoor, ‘The Liability for Delay in Air Transport’ (2001), at 302–304. 164 Regulation (EC) No. 261/2004, Art. 2(j) clarifies that: denied boarding means a refusal to carry passengers on a flight, although they have presented themselves for boarding […] except where there are reasonable grounds to deny them boarding, such as reasons of health, safety or security, or inadequate travel documentation. See also, Lassooy v. Finnair, Case C-22/11 [2012]. 165 Regulation (EC) No. 261/2004, Art. 2(l). 166 Amtsgericht Frankfurt (Court of Small Claims), 31 August 2006, Case No. 30 C 1370/06–25; 2007 ReiseRecht aktuell 42. See, Ronald Schmid, ‘Case Law Digest: Germany’, 32 Air & Space Law 3 (2007), at 234. 167 Folkerts v. Air France, Case C-11/11 [2013]. 168 See, Ronny Henning v. Germanwings, Case-452/13 [2014]. See, Mendes de Leon, Introduction to Air Law (2017), at 269. 169 Haanappel, ‘Compensation for Denied Boarding, Flight Delays and Cancellations Revisited’ (2013), at 49.

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7.11.3  Compensation Scheme Article 7 of the Regulation enshrines a right to compensation, which must be awarded in accordance with the following thresholds: • EUR 250 for all flights of 1,500 km or less; • EUR 400 for all intra-­Community flights of more than 1,500 km and for all flights between 1,500 km and 3,500 km; • EUR 600 for all other flights. A literal interpretation of the Regulation places emphasis on the fact that compensation shall only be provided in cases of denied boarding and flight cancellation. However, in its long-­awaited decisions of Sturgeon v. Condor and Böck and Lepuschitz v. Air France,170 the Court of Justice of the European Union (CJEU)171 held that passengers on flights whose arrival at their final destination is delayed by three hours or more are treated as passengers whose flights are cancelled and, therefore, entitled to compensation under Article 7 of the Regulation.172 This approach has received severe criticism over the years.173 As the CJEU further observed, the scheme provided in Article 7 is completely detached from the price the passenger paid for the ticket, as compensation is an “immediate and standardised” measure granted to passengers in light of their loss of time.174

7.11.4  Duty of Assistance and Right to Care Regulation 261/2004 grants additional rights to passengers, who have been denied boarding, or whose flights have been delayed or cancelled. Article 9 of the Regulation established those passengers shall be offered free of charge: • Meals and refreshments; • Hotel accommodation (if necessary); 170 Joined Cases C-402/07 and C-432/07 [2009]. 171 See, Section 1.3.1.4. 172 The Court adopted the same line of reasoning also in the joined Cases C-581/10 and C-629/10, Nelson and Others v. Lufthansa and TUI Travel and Others v. Civil Aviation Authority [2012]. 173 See, among others, John Balfour, ‘Airline Liability for Delays: The Court of Justice of the EU Rewrites EC Regulation 261/2004’, 35 Air & Space Law 1 (2010), at 71–75; Paul S. Dempsey and Svante O. Johansson, ‘Montreal v. Brussels: The Conflict of Laws on the Issue of Delay in International Air Carriage’, 35 Air & Space Law 3 (2010), at 207–224; John Balfour, ‘EU Regulation 261 and Compensation for Delay: The Advocate General’s Opinion in the References Re Sturgeon’, 37 Air & Space Law 4/5 (2012), at 377–382; Cees van Dam, ‘Air Passenger Rights after Sturgeon’, 36 Air & Space Law 4/5 (2011), at 259–274; Robert Lawson and Tim Marland, ‘The Montreal Convention 1999 and the Decisions of the ECJ in the Cases of IATA and Sturgeon – in Harmony or Discord?’, 36 Air & Space Law 2 (2011), at 99–108; Andrew Harrington, ‘EC 261/2004 and European Commission Reform: A Long and Winding Road to Clarification’, 62 ZLW 4 (2013), at 620–647. 174 Case C-33/04, International Air Transport Association and European Low Fares Airline Association v. Department of Transport [2006].

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CONTRACTUAL LIABILITY • Transport between the airport and place of accommodation (if necessary); and • Two telephone calls, telex, fax message or e-­mails. The wording of the Article also expressly recognises the particular needs of persons with reduced mobility, persons accompanying them and unaccompanied children.175

7.11.5  Compatibility with the Montreal Convention 1999 As early as its entry into force, the Regulation’s validity has been subject to significant debate. In particular, issues arose in relation to its compatibility with the provisions of the Montreal Convention 1999.176 The landmark decisions concerning compatibility between the Regulation 261/2004 and the Montreal Convention 1999 are the IATA/ELFAA177 and the Nelson and Others178 cases. The main findings of the CJEU are as follows: • The type of damage covered by the Regulation 261/2004 is different from the type of damage falling under the scope of the Montreal Convention 1999.179 175 Regulation (EC) No. 261/2004, Art. 9(3). 176 Even though the scope of the questions referred for a preliminary ruling to the CJEU were limited to delay and the immediate measures of assistance and care laid down in Article 6 of the Regulation (EC) 261/2004, the court went even beyond this in evaluating the compatibility of Article 7 of the Regulation, which may fall outside the scope of the Montreal Convention 1999. 177 Case C-33/04, International Air Transport Association and European Low Fares Airline Association v. Department of Transport [2006]. 178 Joined Cases C-581/10 and C-629/10, Nelson and Others v. Lufthansa and TUI Travel and Others v. Civil Aviation Authority [2012]. 179 Joined Cases C-581/10 and C-629/10, Nelson and Others v. Lufthansa and TUI Travel and Others v. Civil Aviation Authority [2012], Paras 51–55: First of all, a loss of time is not damage arising as a result of a delay, but is an inconvenience, like other inconveniences inherent in cases of denied boarding, flight cancellation and long delay and encountered in them, such as lack of comfort or the fact of being temporarily denied means of communication normally available. Next, a loss of time is suffered identically by all passengers whose flights are delayed and, consequently, it is possible to redress that loss by means of a standardised measure, without having to carry out any assessment of the individual situation of each passenger concerned. Consequently, such a measure may be applied immediately. Lastly, there is not necessarily a causal link between, on the one hand, the actual delay and, on the other, the loss of time considered relevant for the purpose of giving rise to a right to compensation under Regulation No 261/2004 or calculating the amount of that compensation. The specific obligation to pay compensation, imposed by Regulation No 261/2004, does not arise from each actual delay, but only from a delay which entails a loss of time equal to or in excess of three hours in relation to the time of arrival originally scheduled. In addition, whereas the extent of the delay is normally a factor increasing the likelihood of greater damage, the fixed compensation awarded under that regulation remains unchanged in that regard, since the duration of the actual delay in excess of three hours is not taken into account in calculating the amount of compensation payable under Article 7 of Regulation No 261/2004. In those circumstances, the loss of time inherent in a flight delay, which constitutes an inconvenience within the meaning of Regulation No 261/2004 and cannot be categorised as ‘damage occasioned by delay’ within the meaning of Article 19 of the Montreal Convention, cannot come within the scope of Article 29 of that convention.

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CONTRACTUAL LIABILITY • Regulation 261/2004 provides standardised and immediate compensation with respect to a ‘loss of time’ or ‘inconvenience’, which is identical to all passengers. • Compensation for delay under the Regulation 261/2004 does not prevent the passenger from seeking individual additional compensation if he/she has suffered damage occasioned by delay according to Article 19 of the Montreal Convention 1999.180 In conclusion, the CJEU, causing global dissent, held that the two legal regimes are compatible, as their scope and purpose cannot be assimilated.181

7.11.6 Extraordinary Defence for the Air Carrier Article 5(3) of Regulation (EC) 261/2004 provides the carrier with a defence in case of flight cancellation. By way of interpretation, the CJEU has extended the application of such exoneration to cases of delay. An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Accordingly, the carrier bears the burden of proving before the court the ‘extraordinary’ nature of the event, which has caused the cancellation or the delay.182 The ‘extraordinary defence’ exculpation is one of the most litigated and controversial features of the Regulation. The main focal point relates to the identification of what types of event may constitute an extraordinary circumstance. The CJEU defines ‘extraordinary circumstances’ as events that are not inherent in the normal exercise of the activity of the air carrier and are beyond its actual control.183

180 Case C-33/04, International Air Transport Association and European Low Fares Airline Association v. Department of Transport [2006], Para. 47: The standardised and immediate assistance and care measures do not themselves prevent the passengers concerned, should the same delay also cause them damage conferring entitlement to compensation, from being able to bring in addition actions to redress that damage under the conditions laid down by the Montreal Convention. 181 Joined Cases C-581/10 and C-629/10, Nelson and Others v. Lufthansa and TUI Travel and Others v. Civil Aviation Authority [2012], Para. 56: “[…] the obligation under Regulation No 261/2004 intended to compensate passengers whose flights are subject to a long delay is compatible with Article 29 of the Montreal Convention”. See, notably, Radošević, ‘CJEU’s Decision in Nelson and Others in Light of the Exclusivity of the Montreal Convention’ (2013), at 99–101. 182 Alexander Milner, ‘Regulation EC 261/2004 and ‘Extraordinary Circumstances’, 34 Air & Space Law 3 (2009), at 215–216. 183 Case C-549/07, Wallentin-Hermann v. Alitalia [2008]; Case C-257/14 Van Der Lans v. KLM Royal Dutch Airlines [2014].

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Did You Know? The following are cases where a circumstance is NOT extraordinary:

 Technical problems, regardless of whether they occur in flight or they come into light during regular maintenance184

 Fallout and strikes of the air carrier’s personnel185  Ordinary weather conditions The following are cases, which were considered to amount to extraordinary ­circumstances:

 Bird strikes186  Sabotage and terrorist acts  Volcanic eruptions187 The following are cases, which include circumstances that must be considered on a case-­by-case basis:

 Strikes of third parties (ATCs, airport, ground handling providers)188  Political instability189  Unexpected flight safety shortcomings190  Security issues, including cybersecurity attacks191 184 Ibid. See, Jochem Croon, ‘Placing Wallentin-Hermann in Line with Continuing Airworthiness: A Possible Guide for Enforcers of EC Regulation 261/2004’, 36 Air & Space Law 1 (2011), at 1–6; John Balfour, ‘The Extraordinary Circumstances Defence in EC Regulation 261/2004 after ­Wallentin-Hermann v. Alitalia’, 58 ZLW 2 (2008), at 224–231. 185 Joined Cases C-195/17, C-197/17 to C-203/17, C-226/17, C-228/17, C-254/17, C-274/17, C-275/17, C-278/17 to C-286/17 and C-290/17 to C-292/17, Krusemann and Others v. TUIFly GmbH [2018]. 186 Case C-315/15, Peskova and Peska v. Travel Air Services A.S. [2017]. 187 Case C-12/11, McDonagh v. Ryanair [2013]. This famous case involving a dispute arising from the closure of the European airspace, which followed, in spring 2010, the eruption of the Icelandic Eyjafjallajökull Volcano. The plaintiff claimed compensation for the expenses he incurred in due to the fact that he was forced to remain in Portugal for more than a week. The court found the event to constitute a ‘super extraordinary circumstance’, having, in fact, impeded the operation of over 100,000 flights. See, Jeremias Prassl, ‘Reforming Air Passenger Rights in the European Union’, 39 Air & Space Law 1 (2014), at 59–82. 188 See, Andrea Trimarchi, ‘Strike as an Extraordinary Circumstance under Reg. 261/2004: Some Considerations’, 15 The Aviation & Space Journal 4 (2016), at 1–28. 189 Regulation (EC) No. 261/2004, Recital (14). 190 Ibid. 191 See, Benjamyn I. Scott and Andrea Trimarchi, ‘The Digital Aviation Industry: A Balancing Act between Cybersecurity and European Consumer Protection’, 42 Air & Space Law 4/5 (2017), at 443–462.

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CONTRACTUAL LIABILITY In conclusion, it should be observed that the Regulation is undergoing a comprehensive revision project. Practice and jurisprudence stressed the necessity to bring clarity around certain fundamental elements, such as delay and extraordinary circumstances. For instance, already in 2013, the EU Commission issued a proposal for revision of Regulation (EC) 261/2004 aimed at specifically addressing relevant issues concerning interpretation and terminology.192 In addition, it provided an explanatory list of circumstances, which may constitute extraordinary circumstances. Furthermore, in 2016, the same Commission published a document containing Interpretative Guidelines Relating to Regulation 261/2004.193 However, as of today, there is no indication that a new Regulation will be adopted soon.

Recommended Literature Michal Bobek and Jeremias Prassl (eds), Air Passenger Rights: Ten Years On (Hart Publishing, 2016). Bin Cheng, ‘1999 Montreal Convention on International Carriage by Air Concluded on the Seventieth Anniversary of the 1929 Warsaw Convention’, 49 ZLW 4 (2000). Giselle Deiró, ‘Jurisdiction and Conflicts of Laws in Contracts of International Carriage by Air’, 37 Air & Space Law 4/5 (2012). Paul S. Dempsey and Michael Milde, International Air Carrier Liability: The Montreal Convention 1999 (Centre for Research in Air & Space Law McGill University, 2005). Isabelle H.P.H. Diederiks-­Verschoor, ‘The Liability for Delay in Air Transport’, 26 Air & Space Law 6 (2001). Lawrence B. Goldhirsch, The Warsaw Convention Annotated: A Legal Handbook (Kluwer Law International, 2000). Petrus P.C. Haanappel, ‘Compensation for Denied Boarding, Flight Delays and Cancellations Revisited’, 62 ZLW 1 (2013). Pablo Mendes de Leon and Werner Eyskens, ‘The Montreal Convention: Analysis of Some Aspects of the Attempted Modernization and Consolidation of the Warsaw System’, 66 Journal of Air Law and Commerce 3 (2001). Georgette Miller, Liability in International Air Transport (Kluwer Law International, 1977).

Points for Further Research • What are the main reasons which led to the adoption of the Montreal Convention 1999? • What are the relevant differences between the liability regime concerning the carriage of persons and that relating to the carriage of cargo?

192 EU Commission, Proposal for a Regulation of the European Parliament and of the Council Amending Regulation 261/2004, COM(2013) 130 Final, 2013/0072 (COD). 193 EU Commission Notice, Interpretative Guidelines on Regulation (EC) No 261/2004 of the European Parliament and of the Council establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights and on Council Regulation (EC) No 2027/97 on air carrier liability in the event of accidents as amended by Regulation (EC) No 889/2002 of the European Parliament and of the Council, 2016/C 214/04, OJ C 214/15 of 15 June 2016.

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CONTRACTUAL LIABILITY • How would you define the notion of damage as provided in Article 17 of the Montreal Convention 1999? • What is the value of the fifth jurisdiction? • Are the provisions of the Regulation 261/2004 on compensation in cases of denied boarding, flight cancellation and flight delay compatible with the principle of exclusivity of the Montreal Convention 1999?

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Chapter 8

Third-­Party Liability and Damage on the Surface  LEARNING OBJECTIVES  Become familiar with the international liability regime arising from damage to persons and property on the ground.

 Identify differences between carriers’ liability vis-­à-vis passengers and third parties on the ground.

 Understand the main reasons behind the scarce attractiveness of international law instruments governing ground liability.

 Identify relevant issues emerging from practical examples and accidents occurred in the past.

 Understand the importance of national law in the context of third-­party liability arising out of damage on the surface caused by aircraft.

8.1 Introduction The operation of aircraft may harm not only passengers but also third parties, who do not maintain any contractual relation whatsoever with the operator of the aircraft. As a matter of example, an aircraft crashing over densely populated areas could cause damage to persons and property on the surface of the Earth, besides causing damage to passengers and crew.

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Did You Know? The first judicial decision concerning liability towards third parties on the ground dates back to 1822, when a court case involving a balloon which damaged the garden and the crops of a United States citizen was then brought to the attention of a local court.1

Likewise, engines or components falling from an aircraft may result in the death or injury of people on the ground, as well as in damage to underlying buildings and other property.

Did You Know?  In 1992, an El-­Al Israel Airlines cargo Boeing 747 lost two engines during

take-­ off at Amsterdam Schiphol airport in The Netherlands, resulting in it crashing over a residential area surrounding the airport called Bijlmemeer. The crash tragically caused the death of thirty-­ nine and injured twenty-­ six persons on the ground, as well as the death of all four persons on board.

 In 1988, the explosion of a Boeing 747 operated by the United States carrier

PanAm caused eleven fatalities in the Scottish town of Lockerbie, besides all 243 passengers and thirteen crew members.

 In July 2000, an Air France Concorde crashed during take-­off in the vicinity of Paris Airport, killing four people on the ground and 109 people on board.

 In 2001, during the terrorist attacks of 9/11 – which is so far the deadliest

aviation crash in human history – over 2,500 people lost their lives and more than 6,000 were injured. It is estimated that the events of 11 September 2001 have caused infrastructural and property damage for more than USD 10 billion.

 In all such cases, domestic laws were invoked to govern liability to third parties on the ground.

Furthermore, one may only wonder what tremendous third-­party liability implications the tragic events of the flights Eurowings 9525,2 Malaysian Airlines 17,3 and Ethiopian

1 See, Michael Milde, ‘Liability for Damage Caused by Aircraft on the Surface – Past and Current Efforts to Unify the Law’, 57 ZLW 4 (2008), at 532–533. 2 See, Jennifer M. Clark, ‘Assuring Safer Skies: A Survey of Aeromedical Issues Post-Germanwings’, 81 Journal of Air Law and Commerce (2016), at 351–390. 3 See, Stefan A. Kaiser, ‘Legal Considerations About the Loss of Malaysia Airlines Flight MH17 in Eastern Ukraine’, 40 Air & Space Law 2 (2015), at 107–121.

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THIRD-PARTY LIABILITY Airlines 3024 would have had, had those accidents occurred in urbanised zones, rather than in remote mountainous areas. The necessity to provide legal protection to persons in the event of damage caused on the surface became clear as early as the 1920s. This may be seen as a consequence of the adoption of the Warsaw Convention 1929, which, not taking into account that category of damage, created a sort of disparity between passengers, protected by virtue of a contract of carriage vis-­à-vis the carrier, and third parties on the ground, which are completely extraneous to the operation of a flight. The topic of third-­party liability is the subject of a number of international legal instruments that aim to unify and harmonise the rules concerning the liability of the operator of an aircraft for damage caused by the aircraft to persons and property on the surface. Among these are the Rome Convention 1933, the Brussels Protocol 1938, the Rome Convention 1952 and the Montreal Protocol 1978. Moreover, two conventions were recently adopted by the International Civil Aviation Organization (ICAO) in 2009 as a practical response to ­liability and insurance issues that had emerged following the catastrophic events of 9/11. These conventions, however, are not yet in force.

8.2 Early Development: Rome Convention 1933 Treaty Information Title of Treaty: International Convention for the Unification of Certain Rules to Damage Caused by Aircraft to Third Parties on the Surface Short Title: Rome Convention 1933 Date of Adoption: 2 May 1933 Citation: 192 L.N.T.S. 291 Entry into Force: 13 February 1942 Legal Status: 5 State Parties

Rules governing liability arising from surface damage caused by aircraft were first codified on an international level in the Convention for the Unification of Certain Rules Relating to Damage Caused to Third Parties on the Surface, usually known as the Rome Convention 1933. This Convention enshrines some basic legal principles, which have then served as a model for the drafting of more recent legislation on the topic, the most significant of which relate to: 4 See, BBC, ‘Ethiopian Airlines Crash’, www.bbc.com/news/topics/cv06837xl7lt/ethiopian-airlinescrash; The Guardian, ‘Ethiopian Airlines Crash’, www.theguardian.com/world/ethiopian-airlinescrash.

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THIRD-PARTY LIABILITY • the choice of a ‘strict liability’ regime for the operator of the aircraft; • the inclusion of liability limits for the operator of the aircraft, which are different in correspondence of the weight of the aircraft (as a quid pro quo to the strict liability regime); • the exoneration from liability that is provided if the damage is due to fault of the person who suffered the damage; • the applicability of the Convention exclusively to damage caused on the surface (with the exclusion of mid-­air collisions, for instance); and • the requirement that damage must occur while the aircraft is in flight. The Rome Convention 1933 did not achieve widespread consensus with only five ratifications by States. However, the Rome Convention 1933 has not entirely been replaced by the Rome Convention 1952, which only supersedes it as between States that are party to both conventions.5

Definition Strict Liability: Under common law, and with particular respect to the field of tort law, strict liability is usually attached to the consequences of activities involving a certain degree of risk. Strict liability, by definition, is imposed on a person without a finding of fault, such as negligence. The common law dichotomy tort–strict liability is known to civil law jurisdictions, whereby such notions are usually referred to, albeit with some peculiarities (which will not be further discussed in this book), as responsabilité objective or du fait dáutrui in French, responsabilita oggettiva in Italian and Gefährdungshaftung in German, which, for ease of reference may be subsumed into the English term ‘objective liability’. A further, albeit vain, attempt to modernise the Rome Convention 1933 was made in 1938 through the Brussels Protocol 1938,6 focusing on insurance requirements, which has been ratified by an even smaller number of States and has never come into force.7

5 Rome Convention 1952, Art. 29. 6 Protocol Supplementary to the Convention for the Unification of Certain Rules Relating to Damage Caused by Foreign Aircraft to Third Parties on the Surface, opened for signature 29 September 1938, ICAO Doc. 107-CD. 7 Two States have, as of August 2019, ratified the Brussels Protocol 1938.

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8.3 Rome Convention 1952 8.3.1 Scope Treaty Information Title of Treaty: Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface Short Title: Rome Convention 1952 Date of Adoption: 7 October 1952 Citation: 310 UNTS 182 Entry into Force: 4 February 1958 Legal Status: 51 State Parties

If an aircraft accident results in damage to third parties on the surface, the Rome Convention 1952 would probably be the most likely international legal regime to apply. This is not because the Convention represents an international success. Conversely, although being fully in force, it received only fifty-one ratifications.8 Among the forty-­nine States who have ratified the Rome Convention 1952, only Russia, Italy and the United Arab Emirates play a significant role in the international civil air transport scenario. It is also significant that States – namely, Australia, Canada and Nigeria – have denounced the convention, after having ratified it. The scope of the Convention is delimited geographically. The Rome Convention 1952 only applies if there is an ‘international element’, that is, when damage is caused in the territory of a contracting State by an aircraft registered in the territory of another contracting State.9 Conversely, should a Brazilian registered aircraft cause damage on the ground in the territory of Brazil, national law, that is, Brazilian law would apply. As an example, the United States, the United Kingdom, France and Germany, among other countries with a remarkably developed air transport industry, are not parties to the Rome Convention 1952. As a result, it has never been applied in practice, as States prefer to apply their domestic regulations, which provide more suitable and realistic liability regimes (as not all regimes are based on limited liability).10  8 See, Hans-George Bollweg, ‘Liability for Damage Caused to Third Parties’, in Stephan Hobe, Nikolai von Ruckteschell and David Heffernan (eds), Cologne Compendium on Air Law in Europe (Carl Heymanns Verlag, 2013), at 1031.   9 Rome Convention 1952, Art. 23. Such provision also regulates the status of ships or aircraft on the high seas which “shall be regarded as part of the territory of the State in which it is registered”. 10 See, for instance, Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017), at 384–387. See also, Harold Caplan, ‘Liability to Third Party Damage on the Ground – Some Fundamental Issues for Consideration by the Council of ICAO Prior to a Diplomatic Conference’, 33 Air & Space Law 3 (2008), at 187.

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THIRD-PARTY LIABILITY The Rome Convention 1952 relates to damage that is caused by an aircraft in flight, or by any person or thing falling therefrom, to persons or property on the ground. However, per Article 1(1), there must be a causal link between the incident and the damage.11 The scope of the Rome Convention 1952 is thus limited to situations where damage is caused by an aircraft ‘in flight’. Pursuant to Article 1(2), an aircraft is deemed to be in flight “from the moment when power is applied for the purpose of actual take-­off until the moment when the landing run ends”.12 However, recoverable damage under the Convention seems to be rather broad, as Article 11(2) refers to ‘personal injury’, encompassing, hence, also mental damage (unlike the Warsaw Convention 1929 and the Montreal Convention 1999).13

8.3.2 Operator of the Aircraft The primary party to which liability is attributed is the ‘operator’ of the aircraft. The term ‘operator’ is defined in Article 2(2) (a) as: […] the person who was making use of the aircraft at the time the damage was caused, provided that if control of the navigation of the aircraft was retained by the person from whom the right to make use of the aircraft was derived, whether directly or indirectly, that person shall be considered the operator. For example, a private pilot renting an aircraft for a solo flight from an agency would be deemed to be the operator; however, if for a flight, the agency provides its own pilot, the agency would remain the operator.14 As a result, both natural and legal persons can be an operator. If control of the navigation of the aircraft was retained by the person from whom the right to use the aircraft was derived, that person shall be considered the operator. If the person who makes use of the aircraft does not have exclusive right to use the aircraft for a period longer than fourteen days, he/she shall be jointly and severally liable with the operator.15 The operator shall also be jointly and severally liable with a person who made use of 11 Rome Convention 1952, Art. 1(1): […] there shall be no right to compensation if the damage is not a direct consequence of the incident giving rise thereto, or if the damage results from the mere fact of passage of the aircraft through the airspace in conformity with existing air traffic regulations.

According to commentators, this provision seems to rule out the applicability of the Convention to damage caused by aircraft noise. See, Milde, ‘Liability for Damage Caused by Aircraft on the Surface – Past and Current Efforts to Unify the Law’ (2008), at 537. 12 Rome Convention 1952, Art. 1(2): “In the case of an aircraft lighter than air, the expression ‘in flight’ relates to the period from the moment when it becomes detached from the surface until it becomes again attached thereto.” See, for a comparison on other definitions of ‘in flight’, Chapter 6. 13 See, Chapter 7. See also, among others, Brian F. Havel and Gabriel S. Sanchez, The Principles and Practice of International Aviation Law (Cambridge University Press, 2014), at 319. 14 Milde, ‘Liability for Damage Caused by Aircraft on the Surface – Past and Current Efforts to Unify the Law’ (2008), at 537. 15 Rome Convention 1952, Art. 3.

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THIRD-PARTY LIABILITY the aircraft without his/her consent and caused damage on the surface, unless the operator can prove that he adopted all reasonable measures to prevent such ‘unauthorised’ use.16 The material scope of the Rome Convention 1952 is further narrowed as it shall not apply: • “to damage caused to an aircraft in flight, or to persons or goods on board such aircraft”;17 • if liability for surface damage resulting from the operation of an aircraft had been regulated otherwise, for example, by means of private insurance coverage; and18 • if damage results from the activity of military, customs or police aircraft.19 Pursuant to Article 20 of the Convention, claims brought under the Rome Convention 1952 can only be brought before the courts of the State where the damage occurred (loci delicti commissi). Claimants and defendants are also given the possibility to deviate from such rule and, on the basis of an agreement, submit their claims to the courts of another State, provided such State is a party to the Rome Convention 1952.20 Moreover, a large number of States objected to the creation of a single forum.21 Similar to the Warsaw Convention 1929 and the Montreal Convention 1999, the Rome Convention 1952 is also based on ‘exclusivity’, as Article 9 provides that neither the operator, the owner, any person liable under Article 3 or 4, nor their respective servants or agents shall “be liable […] otherwise than as expressly provided in this Convention”.22 In other words, the application of the Rome Convention 1952 does not allow a plaintiff to recover damage in any other manner. However, the exclusivity of the Rome Convention 1952 does not apply if damage is caused intentionally. Since the Rome Convention 1952 has not been applied in practice, jurisprudence has not clarified the extent of Article 9 (in contraposition to the numerous decisions around Article 29 of the Montreal Convention 1999).23 The exclusivity of the Rome Convention 1952 is believed to be one of the fundamental reasons for its unsuccessful history, as States have been reluctant to rely on a regime with such low liability limits. Under the terms of the Rome Convention 1952, any person who would otherwise be liable under the Convention, can still be exonerated under the following (extreme) circumstances: • if the damage is the direct consequence of armed conflict or civil disturbance; or

16 Ibid., Art. 4. 17 Ibid., Art. 24. 18 Ibid., Art. 25. 19 Ibid., Art. 26. 20 Ibid., Art. 20(1). 21 Jeroen Mauritz, Liability of the Operators and Owners of Aircraft for Damage Inflicted to Persons and Property on the Surface (Shaker Publishing, 2003), at 85–88. 22 Rome Convention 1952, Art. 9. 23 See, Chapter 7.

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THIRD-PARTY LIABILITY • if such a person has been deprived of the use of the aircraft by an act of public authority.24 The operator shall not be liable also in the event he/she successfully proves that the damage was caused solely through the negligence of a wrongful act of the victim.25 Yet, as for the Rome Convention 1933, the main characteristic of the Convention lies in the limits of liability, which, once again, are expressed in terms of weight.26 Five categories are identified as follows: (a) 500,000 francs for aircraft weighing 1,000 kg or less; (b) 500,000 francs plus 400 francs per kg over 1,000 kg for aircraft weighing more than 1,000 but not exceeding 6,000 kg; (c) 2,500,000 francs plus 250 francs per kg over 6,000 kg for aircraft weighing more than 6,000 but not exceeding 20,000 kg; (d) 6,000,000 francs plus 150 francs per kg over 20,000 kg for aircraft weighing more than 20,000 but not exceeding 50,000 kg; (e) 10,500,000 francs plus 100 francs per kg over 50,000 kg for aircraft weighing more than 50,000 kg.27 The value of francs is calculated with respect to the price of gold, per Article 11(4), which then allows it to be converted into a local currency, such as USD or EUR.

Did You Know? Pursuant to Article 11(2) of the Rome Convention 1952, liability in case of death or personal injury shall not exceed 500,000 francs. This amount would roughly amount to approximately USD 40,000. It is not difficult to notice that such limit appears inadequate and unrealistic. Also, it would pose serious concerns as, following the same aircraft accident, a third party would only be entitled to compensation up to USD 40,000 whereas passengers on board the aircraft would benefit from unlimited liability under the Montreal Convention 1999.28

Furthermore, liability of the operator is unlimited if the person who suffered the damage provides evidence that the damage was caused by a deliberate act or omission of the operator, his servants or agents, done with the intent to cause damage, provided the servants 24 Rome Convention 1952, Art. 5. Accordingly, an operator shall not be liable “if the damage is the direct consequence of armed conflict or civil disturbance, or if such person has been deprived of the use of the aircraft by act of public authority”. 25 Ibid., Art. 6. 26 See also, Mauritz, Liability of the Operators and Owners of Aircraft for Damage Inflicted to Persons and Property on the Surface (2003), at 112–114. 27 Rome Convention 1952, Art. 11(1). 28 See, for an attempt to review the limits, Chapter 7.

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THIRD-PARTY LIABILITY or agents were acting in the course of his employment and within the scope of his authority.29 Therefore, unlimited liability could be invoked, for instance, in the event the pilot of an aircraft were to intentionally crash the aircraft over a shopping mall or a train station, causing massive damage to people and property on the ground. The Rome Convention 1952 lays down detailed facultative requirements with respect to insurance coverage for the operators of aircraft.30 These are primarily enshrined in Articles 15 and 17 of the Convention, whereby, for instance, the operator of an aircraft registered in another contracting State may be required by a contracting State to be insured in respect of his liability for damage in its territory.31

8.4 Montreal Protocol 1978 Treaty Information Title of Treaty: Protocol to Amend the Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface Signed in Rome on 7 October 1952 Short Title: Montreal Protocol 1978 Date of Adoption: 23 September 1978 Citation: ICAO Doc. 9257 Entry into Force: 25 July 2002 Legal Status: 12 State Parties

The Montreal Protocol 1978 was adopted primarily in order to raise the liability caps of the Rome Convention 1952. However, the objective of trying to raise the number of ratifications of the Rome regime was not achieved as the majority of States, who had not ratified the Rome Convention 1952, did not take into consideration the Montreal Protocol 1978 either. The Protocol brought novelty with respect to three aspects: 1. it raised the liability limits foreseen in the Rome Convention 1952. Limits were considerably increased, however, States found them still too low. The Protocol also made reference to the unity of account of SDR and dismissed the use of gold francs; 2. it included a specific provision, according to which the Rome Convention 1952 shall not be applicable in case of nuclear damage (Article 27); and 29 Rome Convention 1952, Art. 12. 30 See, Section 9.5.1. 31 Rome Convention 1952, Art. 15(1). Other securities may be provided in the place of insurance, as to which see, Art. 15(4). See, Mauritz, Liability of the Operators and Owners of Aircraft for Damage Inflicted to Persons and Property on the Surface (2003). See also, Bollweg, ‘Liability for Damage Caused to Third Parties’ (2013), at 1034.

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THIRD-PARTY LIABILITY 3. the applicability of the Convention would be extended also to damage caused in the territory of a contracting State not only by an aircraft registered in another contracting State but also by an aircraft, whatever its registration may be, the operator of which has his principal place of business or his permanent residence in another contracting State. Despite its success in increasing the low liability limits established through the Rome system, the Montreal Protocol 1978 did not go any further and did not induce States with a developed aviation industry, such as the United States, to eventually “join the Rome circle”.32 In the longer term, this led the aviation community to consider a systematic review of the entire international third-­party liability regime at hand.33

8.5 International Civil Aviation Organization Conventions for Damage to Third Parties The unsuccessful history of the Rome Convention 1933 and Rome Convention 1952 are among the main reasons which induced ICAO to set up a specific working group for the modernisation of the international legal regime applicable to damage caused by aircraft to third parties on the surface. Also, the immeasurable impact of the 9/11 attacks created compelling reasons for looking afresh at those legal issues relating to liability for surface damage, which the Rome Convention could not propitiously regulate.34 As a result of the efforts of ICAO, two international conventions were adopted in May 2009, namely: • Unlawful Interference Convention 2009 • General Risks Convention 2009 These two instruments differ in their scope as the former is designed to deal with unlawful interference only, including terrorism, whereas the latter covers third-­party surface damage liability that “do not involve unlawful interference”.35 To date, less than a dozen States have ratified the each of the two conventions. Since their entry into force is expressly linked to the ratification by at least thirty-­five contracting States,

32 Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 320. 33 Sean Gates and George Leloudas, ‘From Rome to Montreal in 57 Years: Worth the Wait?’, 22 Air & Space Law 3 (2009), at 6. 34 See, Mark Franklin, ‘Is a Successful New Convention on Airline Liability for Surface Damage Achievable?’, 31 Air & Space Law 2 (2006), at 88–90; Sean Gates and George Leloudas, ‘From Rome to Montreal in 57 Years: Worth the Wait?’ (2009) at 4–7; George N. Tompkins Jr., ‘Some Thoughts to Ponder when Considering Whether to Adopt the New Aviation General Risks and Unlawful Interference Conventions Proposed by ICAO’, 33 Air & Space Law 2 (2008), at 82; Harold Caplan, ‘Post 9/11 – Air Carrier Liability Towards Third Parties on Land or Water as a Consequence of War or Terrorism’, 30 Air & Space Law 1 (2005), at 5–9. 35 Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 322.

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THIRD-PARTY LIABILITY the Unlawful Interference Convention 2009 and the General Risks Convention 2009 are not in force.

8.5.1 Unlawful Interference Convention 2009 Treaty Information Title of Treaty: Convention on Compensation for Damage to Third Parties Resulting from Acts of Unlawful Interference Involving Aircraft Short Title: Unlawful Interference Convention 2009 Date of Adoption: 2 May 2009 Citation: ICAO Doc. 9920 Entry into Force: Not in Force Legal Status: 11 signatures, 3 ratifications, 6 accessions

The Unlawful Interference Convention 2009 is applicable to damage caused by an aircraft to a third party in the territory of a contracting State occurring during an international flight, which becomes the object of an unlawful interference by another entity.36 Some relevant features of the Unlawful Interference Convention 2009 are the following: • it substantially increases liability caps of the Rome Convention 1952; • the State where the damage occurs has jurisdiction; • the establishment of an International Civil Aviation Compensation Fund;37 • it allows recoverability of mental damage only if directly resulting from a bodily injury;38 • a regime of strict liability for the operator has been maintained. However, the operator’s liability is also extended to its ‘senior management’; • it enshrines an exclusivity clause; and • a right to recourse if given to the operator.39 36 Unlawful Interference Convention 2009, Art. 2(2). 37 Ibid. Such fund collects charges levied on passengers and cargo and is designed to mitigate air carriers’ increased liability. 38 See, Ruwantissa Abeyratne, ‘The ICAO Conventions on Liability for Third-Party Damage Caused by Aircraft’, 34 Air & Space Law 6 (2009), at 410. 39 However, it seems “virtually unimaginable that terrorist perpetrators would have the financial resources to indemnify the damage”. Also, it remains unclear how States (or airlines) could enforce a right to recourse for acts of unlawful interference, such as terrorism. See, Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 321.

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THIRD-PARTY LIABILITY The Unlawful Interference Convention 2009 has received a lot of criticism. It seems rather unpractical for States and airlines (i.e. private commercial entities) to bear the financial consequences of terrorist attacks, which appear as factually beyond and extraneous to their actual control.40

8.5.2 General Risks Convention 2009 Treaty Information Title of Treaty: Convention on Compensation for Damage Caused by Aircraft to Third Parties Short Title: General Risks Convention 2009 Date of Adoption: 2 May 2009 Citation: ICAO Doc. 9919 Entry into Force: Not in Force Legal Status: 13 signatures, 4 ratifications, 8 accessions

The second convention adopted by ICAO is the General Risks Convention 2009, whose main aim was to ensure adequate compensation for third parties sustaining damage connected to aircraft-­in-flight accidents. In other words, it represents “the effective replacement for the original Rome Convention”.41 The General Risks Convention 2009 shows some structural similarities with the Unlawful Interference Convention 2009 insofar as it foresees the operator’s strict liability under limits based on the weight of the aircraft involved.42 Similarly to the Unlawful Interference Convention 2009, the scope of application is broader than the one delineated under the Rome System and applies to damage to third parties occurring in the territory of a State Party caused by an aircraft in flight in the course of an international flight. However, the damage shall not result from an act of unlawful interference, in which case the Unlawful Interference Convention 2009 would apply.43 

40 Ibid., at 322. Interestingly, authors also note that such attacks are usually carried out by ‘Stateless aggressors’. 41 Ibid., at 323. 42 Abeyratne, ‘The ICAO Conventions on Liability for Third-Party Damage Caused by Aircraft’ (2009), at 406. 43 General Risks Convention 2009, Art. 2(1).

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Some peculiar elements contained in the General Risks Convention 2009 include:  • its application is extended to environmental damage, provided that the domestic law of the State where the damage occurred allows compensation for such kind of damage;44 • it also allows claims for mental injury to be submitted;45 • it precludes the possibility to seek compensation for punitive or exemplary damage; • owners and lessors of aircraft are not liable under the Convention; and • unlike the Unlawful Interference Convention 2009, no international fund is established to mitigate operators’ liability.

The General Risks Convention 2009 is still far from entering into force. As discussed, most major countries have developed reliable domestic legal regimes for surface liability. Critical issues concerning insurance requirements, as well as low liability caps, seem, to date, to discourage the achievement of a comprehensive global regime on such matters.

8.6 Mid-­Air Collisions Mid-­air collisions between aircraft have occurred with significant practical and legal consequences. They have, indeed, often resulted in highly tragic events, also causing damage to persons and property on the ground.

Did You Know?  In 1996, for instance, 349 people died in a mid-­air collision between two

airlines (a Saudi carrier, Saudia Flight 763 and a Kazakh scheduled flight, operated as Kazakhstan Airlines Flight 1907) in what is deemed as the deadliest mid-­air collision in aviation history.

 Significantly, the worst accident the commercial air transport industry has ever

witnessed, that is, the ‘Tenerife Crash’, resulted from two Boeing 747 (KLM flight 4805 and Pan Am flight 1736) colliding during take-­off. It is not considered a mid-­air collision, as crash occurred on the ground; however, provisions of the Rome Convention 1952 and the General Risks Convention 2009 would have been theoretically applicable as the aircraft were technically ‘in flight’, under the terminology used thereto.

44 Ibid., Art. 3(5). However, the General Risks Convention 2009 does not take into consideration issues relating to noise damage or sonic boom, as to which see, Mendes de Leon, Introduction to Air Law (2017), at 397–399. 45 Very similarly to the Unlawful Interference Convention 2009, mental injury shall be “compensable only if caused by a recognizable psychiatric illness resulting either bodily injury or from direct exposure to the likelihood of imminent death or bodily injury”. General Risks Convention 2009, Art. 3(3).

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THIRD-PARTY LIABILITY Liability arising from mid-­air collisions causing damage on the ground is not an unknown concept in aviation regulations. Article 7 of the Rome Convention 1952 established a regime of ‘joint liability’ for the operators involved in a mid-­air collision.46 It is, however, important to underline that the Rome Convention 1952 enshrines very low and inadequate liability limits, and its application in a mid-­air event would be highly unlikely. Moreover, in such an event, a third party on the ground is in a much less favourable situation as it “does not participate in the risks involved in travelling by air”, and he does not hold insurance coverage for such events.47

Did You Know? The Überlingen case of 2002 is among the most tragic mid-­air aircraft collisions ever occurred whereby a Tupolov – Bashkirian Airlines 2937 – carrying sixty-­nine passengers and a cargo Boeing 757 – DHL 611 – collided at 36,000 feet over the town of Überlingen in South Germany. The immediate causes of the accident centred on the air traffic controller’s instruction to the Tupolov crew, which contradicted the Traffic Alert/Collision Avoidance System (TCAS) on-­board warning system. He ordered them to descend towards the Boeing 757, which was (unknown to the controller at the time) also responding to a TCAS warning to avoid the other aircraft. The official investigation by the German Federal Bureau of Aircraft Accident Investigation Bundesstelle für Flugunfalluntersuchung identified as the main cause of the collision a number of shortcomings on the part of the Swiss air traffic control service in charge of the sector involved, and also ambiguities in the procedures regarding the use of TCAS, the on-­board aircraft collision avoidance system. The report also found that had both aircraft followed the TCAS instructions, the collision would not have occurred. The Überlingen accident raised compelling questions with respect to conflictual instructions from the TCAS and ATCs. Furthermore, it prompted international initiatives aiming to more efficiently manage congested airspace.

As a result, national law of the State where the damage occurred has been usually applied in practice. The topic of mid-­air collisions, and of damage to third parties caused by mid-­air collisions is not likely to be revised at any time soon, as has been shown in this section, the entire international law regime for liability arising from damage on the surface still denotes 46 Rome Convention 1952, Art. 7 provides that: When two or more aircraft have collided or interfered with each other in flight and damage for which a right to compensation as contemplated in Article 1 results, or when two or more aircraft have jointly caused such damage, each of the aircraft concerned shall be considered to have caused the damage and the operator of each aircraft shall be liable, each of them being bound under the provisions and within the limits of liability of this Convention. See also, Section 8.3. 47 See, Mendes de Leon, Introduction to Air Law (2017), at 396.

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THIRD-PARTY LIABILITY evident shortcomings which undermine its relevance and future applicability on a global scale.

Recommended Literature Ruwantissa Abeyratne, ‘The ICAO Conventions on Liability for Third-­Party Damage Caused by Aircraft’, 34 Air & Space Law 6 (2009), 403–416. Harold Caplan, ‘Liability to Third Party Damage on the Ground – Some Fundamental Issues for ­Consideration by the Council of ICAO Prior to a Diplomatic Conference’, 33 Air & Space Law 3 (2008), 183–213. Harold Caplan, ‘Modernization of the 1952 Rome Convention and Protocol’, 32 Air & Space Law 1 (2007), 19–30. Mark Franklin, ‘Is a Successful New Convention on Airline Liability for Surface Damage Achievable?’, 31 Air & Space Law 2 (2006), 87–97. Jeroen Mauritz, Liability of the Operators and Owners of Aircraft for Damage Inflicted to Persons and Property on the Surface (Shaker Publishing, 2003). Michael Milde, ‘Liability for Damage Caused by Aircraft on the Surface – Past and Current Efforts to Unify the Law’, 57 ZLW 4 (2008), 532–557.

Points for Further Research • Identify the legal implications of mid-­air collisions and the potential for specific legal regimes governing liability arising from such events. • What are the reasons for States not becoming parties to the Rome System? • Is national law suitable for third-­party liability? • Does the Unlawful Interference Convention 2009 encompass new categories of unlawful interference, such as cyberattacks? • What is the current status and the future perspective of the 2009 conventions after almost ten years since their adoption?

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Chapter 9

Aviation Insurance

LEARNING OBJECTIVES  Discover the sources of compulsory aviation insurance.  Discover what types of risk can be insured.  Gain a basic understanding of the insurance process.  Learn the applicable laws and basic principles of aviation insurance.  See which aviation stakeholders need insurance.

9.1 Introduction An operator of a large commercial aircraft faces potential liabilities from passengers, third parties on the ground and in the air (but only, if there is a mid-­air collision), and contractual partners such as airports and air navigation facilities, as well as its own personal losses. As a result of the large financial risk posed by aviation activities, it became necessary from an early stage to obtain liability insurance coverage. Furthermore, the high values of aircraft make it highly advisable to also obtain insurance covering the cost of damage to or loss of aircraft (hull insurance). Recognising the potential for catastrophe situation arising from aviation accidents or incidents, it became necessary to obtain financial protection for accidental loss of damage. As such, the insurance markets provide necessary support for the aerospace industry to help control the potential of wide ranging effects on private individuals, the general public, the operators and service providers.1 1 Nicholas Medniuk, ‘Insurance’, in Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017), at 407.

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AVIATION INSURANCE Therefore, insurance plays an important role in providing financial protection against these risks.2

Did You Know? The exact date of the first aviation insurance policy is debated with some sources citing as early as 1908. However, it is generally agreed that the first policy was conducted at Lloyd’s London.3 The early aviation policies were written by the marine insurance underwriting community, which also continues to shape the aviation insurance market today.4 However, following World War I, aviation insurance started to significantly progress, becoming an indispensable part of international aviation and develop into its own separate subcategory of insurance.5

This chapter will introduce the general concepts of aviation insurance and the core legal texts regulating its principles in this area.

9.2  Definition of ‘Insurance’ International law does not provide a definition of ‘insurance’. A reason for the lack of definition is that, despite the international dimension of aviation, the aviation insurance industry has been mostly regulated at a domestic level, with English law dominating due to historical roots.

2 See, for more information on insurance law, Robert Merkin (ed.), Insurance Law: An Introduction (Informa Law, 2007); John Lowry, P.J. Rawlings and Robert Merkin, Insurance Law, 10th edn (Hart Publishing, 2011); John Birds, Ben Lynch and Simon Milnes, MacGillivray on Insurance Law, 13th edn (Sweet & Maxwell, 2015); John Birds, Birds’ Modern Insurance Law, 10th edn (Sweet & Maxwell, 2016); Robert Merkin, Colinvaux’s Law of Insurance, 11th edn (Sweet & Maxwell, 2016). 3 See, Katherine Posner, Tim Marland and Philip Chrystal, Margo on Aviation Insurance, 4th edn (LexisNexis, 2014), at 1, n. 1. 4 See, for a detailed analysis of marine insurance, Francis Rose, Marine Insurance: Law and Practice, 2nd edn (Informa, 2012). 5 See, for more information on the early developments of aviation insurance, Walter Crowdus, ‘Aviation Insurance’, 2 Journal of Air Law 2 (1931), at 176–192.

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Case REPORT

Prudential Insurance Co v. Inland Revenue Commissioners [1904] 2 KB 658 The definition of ‘insurance’ provided by the English court case Prudential Insurance Co v. Inland Revenue Commissioners is widely cited. It must be a contract whereby for some consideration, usually but not necessarily in periodical payments called premiums, you secure to yourself some benefit, usually but not necessarily the payment of a sum of money, upon the happening of some event […] the event should be one that involves some amount of uncertainty. There must be either uncertainty whether the event will happen or not, or if the event is one which must happen at some time there must be some uncertainty as to the time at which it will happen. The remaining essential is […] that the insurance must be against something.6

First, there must be a contract as provided under the relevant State’s domestic law. Caution must be given here as the criteria may vary in different jurisdictions. Second, there must also be some criteria that distinguish an insurance contract from another type of contract, such as for sale of goods. The insurance contracts must: • provide that the insured will become entitled to receive something on the occurrence of some event; • which event must involve an element of uncertainty; and • the insured must have an insurable interest in the subject matter of the contract.7 As a result, ‘insurance’ can be expressed as “a method of risk management which allows an insured contractually to transfer the risk of loss or liability to insurers in consideration for a premium.”8 Insurance can generally be understood as a form of risk spreading whereby the risks of a few are spread among many to allow the risks to be more manageable. In other words, the premiums paid by many entities pay for the losses of the few. Therefore, the role of the insurers is not to remove or mitigate the risks faced by the insured, rather they “become security to the insured, that he shall not suffer loss, damage or prejudice by the happening of the perils specified in certain things which may be exposed to them.”9

6 Prudential Insurance Co v. Inland Revenue Commissioners [1904] 2 KB 658, at 663. See, for source of condensed quote, Roger ter Haar, Anna Laney and Marshall Levine, Construction Insurance and UK Construction Contracts, 3rd edn (Informa Law, 2016), at 41. See, for more information on the definition of ‘insurance’, John Lowry, Philip Rawlings and Robert Merkin, Insurance Law: Doctrine and Principles, 3rd edn (Hart Publishing, 2011), at 3–9. 7 Posner et al., Margo on Aviation Insurance (2014), at 9. See, Department of Trade and Industry v. St Christopher’s Motorists Assn Ltd. [1974] 1 All ER 395, at 400. While English law requires an ‘insurable interest’; this is not the case for every jurisdiction,for example, Australia no longer requires an ‘insurable interest’. 8 Ibid. 9 Lucena v. Crauford [1806] Bosauquet and Puller’s New Report (1804–1807) 269, at 301.

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AVIATION INSURANCE A class of insurance is aviation insurance. Again, there is no international law definition of ‘aviation insurance’. However, it can be generally understood as insurance that “embraces the insurance of risks associated with (a) the manufacture, ownership, operation and maintenance of aircraft, and (b) the operation of aviation facilities on the surface.”10 Therefore, aviation insurance can be defined as insurance covering aviation risks, activities and stakeholders.11

9.3 Applicable Law As highlighted above, “[a]viation insurance is governed by national law and the terms and conditions of insurance policies are defined and interpreted by national law.”12 Key sources are: • domestic contract law; • domestic insurance law;13 • rights and obligations found in the insurance contract; and • aviation law. London is the largest aviation insurance market with its specialised infrastructure of brokers, specialist lawyers, reinsurers and loss adjustors collectively being called ‘the London Market’.14

Definitions Adjustors: The person that investigates a loss and assesses the amount of the compensation on behalf of the insurer. Brokers: This person that acts on behalf of the insured to find insurers, negotiate and place the insurance contract and manages the policy. Exposure: The amount of hazard threatening a risk.

10 Posner et al., Margo on Aviation Insurance (2014), at 10. 11 See, for a definition of ‘aircraft’, Section 3.2.2.1. See also, for an explanation of aviation stakeholders, Section 1.1.2. 12 Wolf Müller-Rostin, ‘Part 9 Insurance’, in Stephan Hobe, Nicolai von Ruckteschell and David Heffernan, Cologne Compendium on Air Law in Europe (Carl Heymanns Verlag, 2013), at 1095. It is beyond the scope of this chapter to explore individual domestic law. 13 See, Birds et al., McGillivray on Insurance Law (2012), at Chapter 11. 14 See, for more information on Lloyd’s, Frederick Mart, The History of Lloyd’s and of Marine Insurance in Great Britain (Adamant Media Corporation, 2005). See also, for more information on the size of the London Market, International Underwriting Association, London Company Market: Statistics Report 2018, October 2018.

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AVIATION INSURANCE Insurance Policy: The legal document issued to the insured which sets out the terms of the insurance contract.15 Insured: The person, sometimes referred to as ‘policyholder’, whose risk is insured against. Insurer: The person, sometimes referred to as the ‘insurance company’, that offers insurance. Premium: The sum of money that an insurance company charges for the insurance coverage. Renewal: The continuation of insurance following its expiry. Underwriter: The person that evaluates the risk and determines the rates and coverages that will be used for the insurance. Underwriting: The process of evaluating a risk for the insurance. English law shapes the way this market provides insurance, and the formulation and interpretation of the insurance cover, which therefore has a global impact on the aviation insurance market.

Did You Know? Although aviation insurance contracts are individualised, insurers make extensive use of standard form policies, such as the AVN 1C General Form and AVN 1D Aircraft Insurance Policy provided by the Aviation Insurance Clauses Group. “The manual contains standard policy and proposal forms as well as standard wording for clauses and endorsements that are frequently inserted into standard policy wordings in addition to or in place of existing policy provisions.”16 The Aviation Insurance Clauses Group was established in 2005 to develop dedicated wordings for aviation policies.

While London remains an important insurance centre, the aviation insurance market is spread across the globe, indicative of the aviation industry as a whole. Key jurisdictions include Bermuda, China, France, Germany, Japan, Switzerland and the United States.17 The nationality of the insured, such as the airline, will also have relevance for jurisdiction. It is not uncommon for insurance contracts to contain jurisdiction clauses to avoid any ambiguity. For example, AVN 1(C) states:

15 The Slip should not be forgotten as this is the original document signed by the brokers and insurers, whereby in most placements the policy is issued much later than the conclusion of the contract. 16 Müller-Rostin, ‘Part 9 Insurance’ (2014), at 1099. 17 Medniuk, ‘Insurance’ (2017), at 408.

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AVIATION INSURANCE This Policy shall be construed in accordance with English Law and any dispute or difference between the Insured and the Insurers shall be submitted to arbitration in London in accordance with the Statutory provision for arbitration for the time being in force.18 It is, therefore, for the national courts which have jurisdiction over the contract to interpret. In cases where more than one court could have jurisdiction, then the specific conflict laws of those jurisdictions must be explored.19 Well-­established principles of contract interpretation require that an insurance policy be construed according to the entirety of the terms and conditions as set forth in the policy and as amplified in any attached documentation. In interpreting the meaning of an insurance policy, courts apply the plain meaning of the words and phrases used in the contract to the facts before it. Any ambiguity in insurance policies are construed against the insurer and in favour of coverage.20 The principles of interpretation are, thus, different than what is seen in international law.21

Did You Know? Apart from the specific terms of the contract, there are also some general principles of insurance law, which also apply to aviation insurance and need to be considered:

 Utmost Good Faith: Aviation insurance contracts must be entered into with the ‘utmost good faith’ from both sides. The insured must answer all the questions on the proposal form and must provide any additional relevant information that may affect the underwriters’ risk assessment.22

 Insurable Interest: The subject matter of the insurance contract, such as the aircraft, must provide a financial gain for the insured and its damage, destruction or loss would lead to a financial loss.

 Subrogation: Where the insured has legal rights against a third party, the insurer can take over these rights after indemnifying the insured.

 Contribution: A person insured separately with more than one insurer against the same risk and for the same loss may claim in full against any one insurer. Due to the principle of indemnity, however and unless otherwise provided by

18 Standard London Aircraft Insurance Policy AVN 1(C). 19 Posner et al., Margo on Aviation Insurance (2014), at 26; Rod Margo, ‘Conflict of Laws in Aviation Insurance’, 19 Air & Space Law 1 (1994), at 2–7; Robert Ricketts, ‘Arbitration Clauses in Aviation Insurance Contracts: Are They Fit for Purpose?’, 42 Air & Space Law 6 (2017), at 571–582. 20 Müller-Rostin, ‘Part 9 Insurance’ (2014), at 1098. 21 See, for rules of international law interpretation, Chapter 1. 22 The Insurance Act 2015 c.4 replaces the utmost good faith requirement with the duty of fair presentation. The Act gives the right to insurers to contract out of it and retain the utmost good faith regime.

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the insurance contract, the insurer has the right to seek contribution to the claim from the other insurer covering the same risk.23

 Proximate Cause: The most effective cause of the loss in the train of events.  Indemnity: This is the guarantee to restore the insured to the position before the damage occurred, that is, the insurer provides compensation to the insured.

 Loss Minimisation: The insured has the responsibility to take all precautions to minimise the loss on the insured property and act as a prudent uninsured.

9.4 Process Within the field of aviation, the main entities requiring or wanting insurance are: • Operators/airlines; • Manufacturers; • Infrastructure services providers like airports, ATC; and/or • Service providers like ground handling companies, (refuellers, caterers, security). An insurance contract can cover a specific risk or a number of risks, depending on the wording on the contract. Aviation insurance usually protects at least one of three activities: 1. The insured’s own assets; 2. Damages caused by the insured to contractual partners; and/or 3. Damage caused to non-­contractual parties (third parties) of the insured. The creation of an insurance contract follows the same basic steps as the formation of a contract: one party makes an offer to another party, there is an agreement on the offer, consideration is provided by both parties and they both wish to enter into legal relations. However, as the terms of the insurance contract are complex, the financial element is high 23 Regulation (EC) No 785/2004 of the European Parliament and of the Council of 21 April 2004 on Insurance Requirements for Air Carriers and Aircraft Operators, OJ L 138 of 30 May 2004, whereas (15): This Regulation should not be interpreted as requiring double insurance. As far as the contracting carrier and the actual carrier within the meaning of Article 39 of the Montreal Convention can be held liable for the same damage, Member States may establish specific measures to avoid double insurance. See, for a discussion of double insurance, Benjamyn I. Scott, ‘Roadable Aircraft: An Analysis of the Current Legal Environment’, 40 Air & Space Law 3 (2015), at 255–269.

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AVIATION INSURANCE and the impact of claim can be profound. The process of finalising the insurance contract, commonly referred to as ‘placement’, involves several parties and numerous steps.

Did You Know? The basic steps are:

 The insured needs or wants insurance;  so the insured approaches a broker to procure insurance;  the broker prepares a ‘slip’, which is now called the ‘Market Reform Contract’, containing basic terms of the cover sought;

 the slip is presented to potential insurers by the broker, who makes a presentation about the risks to be insured;

 typically, there is a ‘lead’ insurer, who is approached first. Once ‘lead’ terms are offered by the insurer, these are reviewed by the insured;

 if the terms are agreed by the insured, the broker then seeks underwriters (co-­ insurers) until the risk is 100 per cent covered;

 the slip remains the contractual document until the production of the policy document;

 policies often run for one year, many on 1 January–31 December (known as 1/1); and

 the insurance contract can be renewed or a new contract can be drafted, starting the whole process again.24

The information on the slip and discussion with the broker allows the underwriter to price the risk.

Definition Slip: This is a draft contract that is created by a broker and contains a summary of the risk and the terms of a proposed insurance contract. The broker then presents it to underwriters for their consideration. The minimum contents of the slip are: • • • •

Type (of Risk) Insured Period Interest

24 See, a detailed analysis of how aviation insurance is conducted, American Airlines Inc. v. Hope; Banque Sabbag SAL v. Hope [1974] 2 Lloyd’s Rep. 30.

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• • • • • • •

Situation (geographical limits) Sum insured Conditions Form (policy wording to be used) Premium Brokerage Information

In order to determine the premium, the underwriter evaluates the experience of the insured, as well as factual aspects of the specific coverage: • Routes (e.g. regional or global routes, and the involvement of no-­fly zones25 or conflict zones26); • Departure and arrival airports; • Local conditions; • Aircraft type (e.g. new or old); • Value of aircraft; • Experience of pilot and crew; • Experience of airline; and • Management experience and track record. It may be the case that each has a different level of relevance or that other considerations may also become relevant due to the specifics of the case. Therefore, the facts of each case must be individually assessed.

9.5  Compulsory Insurance The Warsaw Conference of 1929, which produced the Warsaw Convention 1929,27 marked the first formal international discussions of introducing compulsory insurance. Such discussions were focused on the liability of an aircraft owner or operator for injury or damage caused to persons and property on the surface, and for damage caused to passengers, baggage, cargo and mail – the scope of the Convention. However, the final text of the Warsaw Convention 1929 did not include a clause on mandatory insurance nor did it deal with third parties. Therefore, third-­party legal liability insurance for aircraft operators and 25 See, for more information, Stefan A. Kaiser, ‘No-Fly Zones Established by the United Nations Security Council’, 60 ZLW 3 (2011), at 402–411. 26 See, for more information, ICAO, Risk Assessment Manual for Civil Aircraft Operations Over or Near Conflict Zones, 2nd edn, Doc. 10084 (2008). 27 See, Chapter 7.

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AVIATION INSURANCE legal liability insurance for (contractual) liability of the air carrier were not provided by an international convention, but by national law.

9.5.1 Rome Convention 195228 The Rome Convention 1933 contained the first mandatory insurance provision in an international aviation treaty.29 It was later amended by Article 15(1) of the Rome Convention 1952. Any Contracting State may require that the operator of an aircraft registered in another Contracting State shall be insured in respect of his liability for damage sustained in its territory for which a right to compensation exists under Article 1 by means of insurance up to the limits applicable according to the provisions of Article 11. Thus, the insurance is there to ensure that the operator of an aircraft shall be able to pay any damages arising out of its liability vis-­ à-vis third parties under the Convention. The Montreal Protocol 1978 contains an amendment to Article 15, but it does not change the mandatory requirement for insurance.30 The Unlawful Interference Convention 2009 under Article 7 and the General Risks Convention 2009 under Article 9 both include mandatory insurance for the liabilities covered in each respective Convention.31 Both, however, are not effective and will most likely never become effective due to lack of ratifications.

9.5.2  Montreal Convention 199932 Unlike the Warsaw Convention 1929, the Montreal Convention 1999, pursuant to Article 50, requires compulsory insurance which aims to ensure that the claimants are sufficiently protected against the bankruptcy of the carrier and other similar situations, so that the claimants can enforce the rights granted to them under the Montreal Convention 1999.33 Article 50 of the Montreal Convention 1999 on ‘Insurance’ states: Insurance States Parties shall require their carriers to maintain adequate insurance covering their liability under this Convention. A carrier may be required by the State Party into which it operates to furnish evidence that it maintains adequate insurance covering its liability under this Convention. 28 See, Chapter 8. 29 See, Michael Milde, ‘Liability for Damage Caused by Aircraft on the Surface – Past and Current Efforts to Unify the Law’, 57 ZLW 4 (2008), at 532–557. 30 See, Section 8.4. 31 See, Section 8.4. 32 See, Section 5.2.3. 33 See, Sebastian Fernandez-Peña, ‘Defining Insurance Coverage Adequacy under the Montreal Convention of 1999’, 34 Annals of Air and Space Law (2009), at 343–378; Wolf Müller-Rostin, ‘Article 50 Montreal Convention – A Provision with Considerable Consequences’, 53 ZLW 4 (2004), at 551–557.

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AVIATION INSURANCE Adequate insurance is not defined, however, due to the inclusion of absolute limited liability, the risk can be sufficiently calculated and adequate insurance can be sought. The Article 50 insurance requirements have been implemented into European Union (EU) law via Regulation (EC) 889/2002,34 which requires insurances for liabilities covered by the Montreal Convention 1999. However, Regulation (EC) 889/2002: • only deals with passenger death or injury and baggage. Thus, even if the Regulation implemented Article 50 into EU law, it did it only partially as the scope is narrower than that of the Montreal Convention 1999; and • became effective on the same day as the Montreal Convention 1999 did for EU Member States, thus, on that day the Montreal Convention 1999 was the law of the States. Therefore, the impact of Regulation (EC) No. 889/2002 on mandatory insurance is mitigated by the above considerations.

9.5.3 European Union Regulation 1008/2008 and Regulation 785/200435 After the 9/11 terrorist attacks in the United States, the European Union established its aviation insurance regime.36 The result was Regulation (EC) 785/200437 on insurance requirements for air carriers and aircraft operators.38 The objective of the Regulation “is to establish minimum insurance requirements for air carriers and aircraft operators in respect of passengers, baggage, cargo and third parties.”39 Pursuant to its Article 2(1), the Regulation applies “to all air carriers and to all aircraft operators flying within, into, out of, or over the territory of a Member State to which the Treaty applies”. It, however, does not apply to: (a) State aircraft […]; (b) model aircraft with an MTOM of less than 20 kg; (c) foot-­launched flying machines […]; 34 Regulation (EC) No 889/2002 of the European Parliament and of the Council of 13 May 2002 amending Council Regulation (EC) No 2027/97 on Air Carrier Liability in the Event of Accidents, OJ L 140 of 30 May 2002. 35 See, Malcolm Clarke and George Leloudas, Air Cargo Insurance (Routledge, 2016), at 27. 36 See, European Commission, Communication from the Commission to the European Parliament and the Council: Insurance Requirements for Aircraft Operators in the EU – A Report on the Operation of Regulation 785/2004, Brussels, 24 April 2008, COM (2008) 216 Final. 37 Regulation (EC) No 785/2004 of the European Parliament and of the Council of 21 April 2004 on Insurance Requirements for Air Carriers and Aircraft Operators, OJ L 138 of 30 April 2004. 38 See, for early discussion, Raphaele Drummond, ‘Liability and Risk Management in International Air Transport: A Study of European Initiatives’, 23 Annals of Air and Space Law (1998), at 49–84. See also, European Commission, ‘Insurance’, https://ec.europa.eu/transport/modes/air/internal_ market/insurance_en. 39 Regulation (EC) No 785/2004, Art. 1(1).

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AVIATION INSURANCE (d) captive balloons; (e) kites; (f ) parachutes (including parascending parachutes); (g) aircraft, including gliders, with a MTOM of less than 500 kg, and microlights, which:

• are used for non-­commercial purposes, or



• a re used for local flight instruction which does not entail the crossing of international borders, in so far as the insurance obligations under this Regulation relating to the risks of war and terrorism are concerned.40

Aircraft that fall outside the scope of the Regulation are subject to the Member States’ domestic law on aviation insurance requirements. In respect of third-­party legal liability insurance: If an aircraft falls within the scope of Regulation (EC) 785/2004 and damage is caused to third parties by the operation of this aircraft, then the operator will be subjected to the minimum weight-­based insurance requirements prescribed under Article 7. In respect of passenger, baggage and cargo liability, the minimum insurance levels have been increased by an amendment to Regulation (EC) 785/2004, that is, Regulation (EU) 285/2010,41 which reflects the increase of the liability limits under the Montreal Convention 1999. This way, it is secured that the minimum insurance levels are always in line with the limits of liability under the Montreal Convention 1999. The only exception is unlimited liability for passenger death or injury pursuant to Article 21(2) of the Montreal Convention 1999. Article 6 of Regulation (EC) 785/2004 as amended by Regulation (EU) 285/2010 sets the minimum level of insurance for passenger death or injury at SDR 250,000, as insurance coverage for unlimited liability is not available.

9.5.4 Other Sources of Law National law may require mandatory insurance for some or all aviation activities. Most States grant their regulatory authorities the right to make the registration of aircraft and the right to engage in aviation activities contingent upon having a minimum amount of insurance cover, without making it mandatory in either case.42 Each national law should be consulted individually.43 This is the case with EU law, as Regulation (EU) 1008/2008 on common rules for the operation of air services in the Community 40 Regulation (EC) No 785/2004, Art. 2(2). 41 Commission Regulation (EU) No 285/2010 of 6 April 2010 amending Regulation (EC) No 785/2004 of the European Parliament and of the Council on Insurance Requirements for Air Carriers and Aircraft Operators, OJ L 87 of 7 April 2010. 42 Medniuk, ‘Insurance’ (2017), at 411. 43 See, Posner et al. (2014), at Chapter 3.

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AVIATION INSURANCE states that insurance is a mandatory condition for granting an operating licence.44 It is common for national law, outside of the EU system, to impose mandatory insurance on an operator before it grants an operating licence. It is also the case that foreign States are unlikely to accept uninsured or inadequately insured operators into their airspace. For example, air services agreements often contain a clause requiring adequate insurance. Contractual relations may also require mandatory insurance. For example, leasing companies want to protect their financial and legal interest in the aircraft that they lease. In order to protect their interest, the lessors require aircraft operators in their leasing and financing documentation to ensure that the aircraft is properly insured.45

9.6 Types of Insurance As a result, there are many aspects to consider when taking insurance and, because of this, there are different types of insurance. Insurance for operational activities:

Definitions Hull Insurance: This covers the owner of the aircraft against physical loss of or damage to the aircraft, which also includes the engines and other parts. Third-­Party Liability Insurance: This insurance covers damage that the aircraft causes to a third party, such as injury or death. It also includes damage to a party’s property, such as house, land and vehicles. Passenger, Cargo or Mail Liability Insurance: This insurance offers coverage for injury or death of a passenger, for damage to cargo or mail, or for delay of passengers or baggage that is flying in the aircraft. This insurance covers the liabilities, such as those cases envisaged by the Montreal Convention 1999, Warsaw Convention or national law. Hull Insurance is not mandatory, whereas Third-­Party and Passenger and Cargo ­Liability are mandatory. It might be the case that the aviation insurance policies do not cover certain risks.46 For example, these exclusions could be: • Wear and tear (this is not an insurable risk, because there is no element of uncertainty involved); 44 Regulation (EU) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on Common Rules for the Operation of Air Services in the Community, OJ L 293 of 31 October 2008, Art. 4. 45 See, for an introduction to aircraft financing, Donal P. Hanley, Aircraft Operating Leasing: A Legal and Practical Analysis in the Context of Public and Private International Air Law, 2nd edn (Kluwer Law International, 2017). 46 There are, however, products which provide much wider cover than just the liabilities covered in the Montreal Convention 1999, such as ANV59A and AVN60A.

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AVIATION INSURANCE • War, hijacking and other perils; • Depreciation of value; • Intentional injury (insured, as long as it is not caused by the insured party themselves. For instance, intentional injury caused by the pilot is insured, as the pilot is not the insured party); • Worker’s compensation; and • Noise and pollution. As the above are risks leaving the operator exposed to possibly severe financial loss, it is possible to ‘buy-­back’ some exclusions. One of the main buy-­backs is for war and allied perils, which can cover: • War and civil war; • Strikes; • Riots; • Hijacking; • Civil commotions; • Labour disturbances; • Suicide; and • Terrorism.47 These risks are excluded from a liability insurance policy and from a hull insurance policy. However, they can be and very often are re-­included into liability policies, not the least because the air carrier and the aircraft operator are liable for damages caused by war and allied perils under the Montreal Convention 1999 and in respect of third-­party damages under national law. In respect of hull insurance, these risks can be insured through a separate insurance contract with a specialised hull war insurer. Besides the insurance coverage afforded to the air carrier and aircraft operators, there are other types of insurance offered to the other stakeholders in the aviation industry, for instance: • Commercial liability (e.g. airports); • Product liability; 47 See, Harold Caplan, ‘A Commentary on “Emergent Trends in Aviation War Risk Insurance” ’, 30 Air & Space Law 2 (2005), at 130–132; Rod Margo, ‘11 September 2001 – An Aviation Insurance Perspective’, 27 Air & Space Law 6 (2002), at 386–397; Erwin Caban, ‘War-Risk, Hijacking & Terrorism Exclusions in Aviation Insurance: Carrier Liability in the Wake of September 11, 2001’, 68 Journal of Air Law and Commerce 2 (2003), at 421–448.

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AVIATION INSURANCE • Airport operations liability; • Breach of warranty insurance; • Loss of use insurance; • Deductible insurance; and • Loss of pilot licence. Aviation insurance as a method of risk management is of utter importance to all parties involved in the aviation business, since this business is faced with an extremely huge potential exposure. Therefore, a number of insurance types are made mandatory to protect not only the victims, but also the wrongdoers.

Recommended Literature Harold Caplan, ‘A Commentary on “Emergent Trends in Aviation War Risk Insurance” ’, 30 Air & Space Law 2 (2005), 130–132. Philip Chrystal, ‘Risky Business: The Aviation Reinsurer’s Perspective’, 27 Annals of Air and Space Law (2002), 161–166. Malcolm Clarke and George Leloudas, Air Cargo Insurance (Routledge, 2016). Walter Crowdus, ‘Aviation Insurance’, 2 Journal of Air Law 2 (1931), 176–192. Raphaele Drummond, ‘Liability and Risk Management in International Air Transport: A Study of European Initiatives’, 23 Annals of Air and Space Law (1998), 49–84. Michael Milde, ‘Liability for Damage Caused by Aircraft on the Surface – Past and Current Efforts to Unify the Law’, 57 ZLW 4 (2008), 532–557. Wolf Muller-­Rostin, ‘Article 50 Montreal Convention – A Provision with Considerable Consequences’, 53 ZLW 4 (2004), 551–557. Sebastian Fernandez-­Peña, ‘Defining Insurance Coverage Adequacy under the Montreal Convention of 1999’, 34 Annals of Air and Space Law (2009), 343–378. Katherine Posner, Tim Marland and Philip Chrystal, Margo on Aviation Insurance, 4th edn (LexisNexis, 2014). Standard London Aircraft Insurance Policy AVN 1(C). Peter Viccars, Aviation Insurance: A PlaneMan’s Guide, 2nd edn (Witherby Seamanship International, 2012).

Points for Further Research • Assessment of aviation insurance in different jurisdictions. • What challenges do new technologies, such as unmanned aircraft, present for aviation insurance? • Should there be a specific international treaty on aviation insurance? • Is there a relationship between insurance and safety? • Is a cyberattack a war risk?

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Chapter 10

Aviation Competition Law

LEARNING OBJECTIVES  Identify the key elements pertaining to competition in air transport.  Recognise the basic principles of European Union (EU) competition law and United States antitrust law.  Understand the need for international harmonisation with regard to competition.  Identify notable competition/antitrust cases involving airlines.  Build awareness around concepts such as ‘fair competition’ and ‘level playing field’.

10.1 Introduction The field of competition law has become incredibly vast and topical, as it has received significant attention in the last decades. Specific rules and laws governing competition have been enacted in over 120 jurisdictions, including Australia, Canada, Chile, the EU, Germany, India, Pakistan, the United Kingdom and the United States. Notwithstanding notable differences among domestic competition law regimes, which will be discussed in more detail later in this chapter, competition and antitrust laws are usually concerned with the prohibition of a number of unfair and distortive activities, which undertakings may put in place. These include:

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AVIATION COMPETITION LAW • the prohibition of collusion between undertakings, particularly the form of agreements aiming at reducing competition, market-­sharing, price-­fixing and limiting production. These situations are usually referred to as ‘cartels’ and considered to be the most evident breaches of competition law; • the prohibition of unilateral conduct of undertakings, which holding a significant market power (dominance), abuse of such market power in order to price-­fix, harm competition and create barriers to new entrants. In practice, the ‘use’ of dominance is subject to careful interpretation in competition law insofar as the boundaries between legitimate behaviour and illegal behaviour – which is abusive and aims to reduce or eliminate competition – on the part of a dominant firm;1 • a mechanism specifically dedicated to control and regulate operations of mergers between undertakings. The creation of a merger (also often referred to as ‘concentration’ or ‘combination’) may cause adverse effects on the market; and • some competition law regimes regulate other phenomena, such as that of State aid granted by a State to national undertakings, which may have the object or the effect of giving such undertakings a competitive advantage vis-­à-vis competitors. However, terminology may differ worldwide. While indeed in Europe – and in the United Kingdom – this branch of law is commonly referred to as competition law, in the United States the set of rules concerned with “unfairly conduct tending at destroying competition” is known as antitrust law.2

Did You Know? Nowadays, competition and antitrust laws can be used interchangeably to refer to the complex of rules implemented to regulate undertakings and commercial entities’ behaviour with no relevant implications.

Competition law is strongly intertwined with economic theories, which have played a significant role in its development. The aim of competition law is that of defining, measuring and evaluating the (distortive) effects that a commercial practice, an agreement or a strategy may have in a particular market and, eventually, provide tools or instruments to re-­establish some degree of competition.3

1 Maher M. Dabbah, International and Comparative Competition Law (Cambridge University Press, 2012), at 34. 2 Spectrum Sports Inc. v. McQuillan 506 U.S. 447, 458 (1993). 3 Anestis S. Papadopoulos, The International Dimensions of EU Competition Law and Policy (Cambridge University Press, 2010), at 19–21.

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Definitions4 Antitrust: “It derives its origin from a perception in the United States in the 1880s and 1890s that some industries, then organised into large-­scale trusts were undermining”. The expression Antitrust Law is generally used with the same meaning of Competition Law. As a matter of terminology, Competition Law is employed with respect to the EU, whereas Antitrust Law is a United States law term. Cartel: “A formal or informal agreement between undertakings to manage domestic or international markets by lessening competition between the undertakings. Methods include agreement not to compete on price, limitations on the total output by members to the agreement, market-­sharing agreements etc.” Competition: “The way undertakings behave in the market place and how they respond to the actions of other suppliers and consumers.” Competition Law: “The complex of rules and regulations enacted to foster the competitive environment in an economy, partly through a more efficient allocation of resources.” Dominant Position: “A position of economic strength enjoyed by an undertaking, which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave independently of its competitors, customers and ultimately of its consumers.”5 Horizontal Agreement: “An agreement for co-­operation between two or more competing undertakings operating at the same level in the market.” Monopoly: “A single provider or seller of goods and services who is often maintained through legislation (Legal Monopoly) or by nature (Natural Monopoly) permitting no others to perform the same activity.” Price-­Fixing: “An agreement between competitor undertakings to sell the same product or service at the same price.” Relevant Market: “A market in which a particular product or service is offered and sold.” Undertakings: “Any legal or natural person or any entity that is capable of carrying on commercial or economic activities relating to the supply of goods or services.” Vertical Agreement: “An agreement between undertakings at different levels of the distribution and supply chain to work together.” At its worst, a vertical agreement may indicate collusion; however, this is not necessarily the case. Franchising is an example of vertical agreement. There is no formal uniform competition law regime applicable at the international level. Although competition law and policy has acquired an international dimension due to the 4 Walter Goode, Dictionary of Trade Policy Terms (Cambridge University Press, 2010). 5 Case 27/76, United Brands v. EU Commission [1978] ECR 207, para. 1, at 208.

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AVIATION COMPETITION LAW emergence of economic globalisation, such branch of law has traditionally evolved to promote and maintain competition in markets within the territorial boundaries of each State.6 As a result, competition law is still a matter of domestic law, and, in some instances, of regional integration, among which EU competition law is the most important example.7 This chapter will only provide an overview – and a comparison – of the two most significant regimes worldwide, that is, the EU competition law and the United States antitrust law regimes. National competition laws are usually concerned with the activities carried within their territory, with some very limited exceptions regarding their extra-­territorial application. However, according to the so-­called ‘effect doctrine’, competition authorities may apply their own competition laws to certain international economic activities that have a negative impact on their domestic market, although the activity is being conducted by foreign undertakings and not completely occurring within that market.8 As an example, United States antitrust law would apply to behaviour, which, albeit occurring outside the United States territory, generates distortion or an anticompetitive effect in the United States market.

Did You Know? The roots of competition law can be found in the common law system. However, the first known example of anti-­monopoly legislation was adopted in ad 483 in the Roman Empire, where the Emperor Zeno enacted the so-­called Zeno Edict, prohibiting any form of monopoly.9 The first known restrictive trade agreement was examined under common law by the English courts in the Dyer’s Case10 in 1414, whereas the first concerns around the notion of monopoly were expressed in 1602 in the Darcy v. Allein case,11 which fostered the adoption of some specific statutory rules contained in the Statute of Monopolies of 1624. The first competition-­related legislation of modern times dates back to 1889 when Canada enacted the Act for the Prevention and Suppression of Combinations formed in restraint of Trade.12 Only a year later, the United States enacted a set of rules as a means of reaction to the prevailing proliferation of ‘trusts’,

 6 See, Martyn D. Taylor, International Competition Law (Cambridge University Press, 2009), at 43–45.   7 In recent years, considerable efforts have been made in relation to developing competition law and policy regionally. These include, among others, the creation of the Association of SouthEast Asian Nations, the Common Market for Eastern and Southern Africa (COMESA) and the North American Free Trade Agreement.   8 Richard Whish and David Bailey, Competition Law, 9th edn (Oxford University Press, 2018), at 154–158.   9 Codex Iustinianus, 4, 59, 3 (ad 483). 10 Dyer’s Case (1414) 2 Hen. V, fol. 5, pl. 26. 11 Edward Darcy Esquire v. Thomas Allein of London Haberdasher (1602) 74 ER 1131. 12 An Act for the Prevention and Suppression of Combinations formed in restraint of Trade, 52 Vict. c. 41 (1889).

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agreements designed to cooperate with competitors in order to fix output, prices and market shares. The most famous example of trust was the Standard Oil Company,13 which in the 1880s was controlling a number of markets, including fuel oil, sugar, lead and whisky. In Europe, the first anti-­cartel laws were reported in Germany (1923), Sweden (1925) and Norway (1926). However, it was only after the World War II that some European countries – for example, the United Kingdom and Germany – adopted competition laws.14

Several attempts at delineating a multilateral trade agreement were made even before the conclusion of the General Agreement on Trade in Services (GATS) in 1993,15 the General Agreement on Tariffs and Trade (GATT) in 1994,16 and the Marrakesh Agreement establishing the World Trade Organization (WTO) in 1994,17 which contain a range of provisions addressing various cross-­border competition issues on a sector-­specific basis.

Did You Know? The World Trade Organization (WTO) is an intergovernmental organisation regulating international trade. It is based in Geneva and is the largest international economic organisation in the world. The organisation’s main functions include:

 to implement rules and provisions related to trade policy review mechanism;  to provide a platform for member countries to discuss future strategies related to trade and tariff; and

 to administer the rules and procedures concerning the settlement dispute between member countries.

However, it must be noted that air services and, most importantly the exchange of air traffic rights, are expressly excluded from the application of the GATS and the WTO’s principles, if not for a few ancillary services connected thereto.18 13 The Standard Oil Company of New Jersey et al. v. The United States, 221 U.S. 1 (1911). 14 Papadopoulos, The International Dimensions of EU Competition Law and Policy (2010), at 13. 15 General Agreement on Trade in Services, 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1B, 1869 UNTS 183, 33 I.L.M. 1167 (1994). 16 General Agreement on Tariffs and Trade, 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1867 UNTS. 187, 33 I.L.M. 1153 (1994). 17 Marrakesh Agreement Establishing the World Trade Organization, 15 April 1994, 1867 UNTS 154, 33 I.L.M. 1144 (1994). 18 See, Brian F. Havel and Gabriel S. Sanchez, The Principles and Practice of International Aviation Law (Cambridge University Press, 2014), at 89–92.

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10.2 Application of Competition Law to Air Transport From a legal point of view, it is not possible for an airline to provide international air services capable of offering an entirely global service network. This is, in simple words, the main reason why there has been a proliferation of commercial agreements, joint ventures, as well as international airline alliances raising significant concerns in terms of competition.19 Given the international nature of air transport, it seems clear that anti-­competitive behaviour by aviation stakeholders may result in market distortion in their own, as well as in other jurisdictions.20 The application of competition law to air transport is a legacy of the process of deregulation and liberalisation initiated in the United States in the late 1970s and in the EU in the early 1990s, which, as discussed in Chapter 5, significantly marked the beginning of a new era in the provisions of international air services. The abolition of certain traditional barriers to market access, airline cooperation and cross-­border mergers has increasingly urged competition authorities worldwide to place attention on the air transport sector as a whole.

10.3 European Union Competition Law Framework 10.3.1 Prohibited Agreements Article 101 Treaty on the Functioning of the European Union (TFEU)21 is conceived to deal with the phenomenon of collusion between undertakings as it prohibits: all agreements between undertakings, decisions of associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the Common Market.22 Under EU competition law, any such agreements shall be automatically void.23

19 See, Chapter 5. 20 Angela Cheng Jui-Lu, International Airline Alliances: EC Competition Law/US Antitrust Law (Kluwer Law International, 2003), at 72. The author underlines that: In order to avoid implying that extraterritorial application should be encouraged under public international law, which is opposite to what it is at present in accordance with the territorial principle under present public international law, the term ‘extraterritorial application of competition law’ will be replaced by ‘application of competition law to international economic activities’ or ‘application of competition law to economic activities with foreign elements involved’. 21 Consolidated Version of the Treaty on the Functioning of the European Union, OJ C 202 of 7 June 2016. 22 TFEU, Art. 101(1). 23 Ibid., Art. 101(2).

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AVIATION COMPETITION LAW The term ‘undertaking’ is not defined in the TFEU, but a sort of consensus on its definition has been built around decisions rendered by the EU Commission and the Court of Justice of the European Union (CJEU). It is generally understood to refer to: any legal or natural person or any entity engaged in an economic activity consisting in offering goods or services on a given market, regardless of its legal status or the way it is financed.24 It naturally derives from such definition that airlines are undertakings under EU competition law.25 Airports are also considered undertakings as they carry out economic activities consisting in an offer of services.26 Similarly, aircraft manufacturers are undertakings and are subject to the rules of the TFEU.27 An ‘objective element’ can be identified in Article 101 TFEU, that is, an agreement – or a concerted practice – shall exist. The reach of the term ‘agreement’ is very wide and can extend to all forms of collusion, either tacitly or expressly.28 The terminology used is such that it covers both horizontal and vertical agreements. The above provision also targets concerted practices, which have not reached the stage of a proper agreement, yet, show forms of coordination, aiming or producing the effect to distort competition within the EU single market. Only agreements which have the object or the effect to restrict or distort competition fall under the application of Article 101 TFEU. In other words, EU competition law prohibits agreements, concluded with the aim of distorting competition that have not entered into force, as well as agreements which did not have the objective of affecting competition but ultimately have the effect of doing so.29 It is the same provision to implicitly establish a hierarchy between the two kinds of agreements, establishing that the agreements are anti-­ competitive by their objects constitutes the most serious breach of competition law. However, agreements, which have a marginal economic impact on competition or on trade

24 See, Viho Europe BV v. EU Commission (C-73/95P) [1996] ECR I-5457, 4 CMLR 419. There is copious EU jurisprudence on the definition of undertaking under EU competition law, as to which, see Valentine Korah, Cases & Materials on EC Competition Law, 2nd edn (Hart Publishing, 2001). 25 According to Regulation (EU) 1008/2008, Article 2(1), airlines are undertakings. Examples of associations of undertakings in the aviation sector are IATA and ACI, which, therefore, fall under the application of EU competition rules. See, Pablo Mendes de Leon, Introduction to Air Law, 10th edn (Kluwer Law International, 2017), at 102. 26 See, ECJ, Case C-82/01 P, Aeroport de Paris v. EU Commission (1978). 27 See, for instance, Ruwantissa Abeyratne, ‘The Airbus-Boeing Subsidies Dispute – Some Preliminary Legal Issues’, 30 Air & Space Law 6 (2005), at 379. 28 In the aviation context, code-sharing agreements, airline alliance agreements, agreements concerning tariff consultations, agreements relating to exchange of sensitive information between airlines or airline joint ventures are prima facie agreements under Article 101 TFEU. 29 Whish and Bailey, Competition Law (2018), at 92–96. See, with respect to vertical agreements having the object of distorting competition, CJEU, Miller International Schallplatten GmbH v. EU Commission, [1978] ECR 131, [1978] 2 CMLR 334; CJEU, The Distillers Co. Ltd. v. EU Commission, [1980] ECR 2229 [1980] 3 CMLR 121.

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AVIATION COMPETITION LAW between Member States are generally immune from the application of EU competition rules.30 Article 101(3) TFEU provides the possibility for certain agreements to be exempted from the application of EU competition law, provided they confer significant benefits to consumers and improve technological and economic progress.31 Article 101(3) can be applied in individual cases or to categories of agreements and concerted practices by way of block exemption regulation.32 The Council Regulation (EU) No. 487/200933 enables the EU Commission to adopt regulations to constitute block exemptions. This has been the case, for instance with regard to slot allocation at airports and joint planning and coordination of airline schedules.34 However, since the entry into force of Regulation (EC) No. 1/2003,35 air transport is fully subject to EU competition law. 30 According to the so-called ‘de minimis doctrine’, an agreement falls outside the scope of Article 101(1) TFEU if it has only an insignificant effect on the market. See, Whish and Bailey, Competition Law (2018), at 89; see also, Moritz Lorenz, An Introduction to EU Competition Law (Cambridge University Press, 2013), at 112–113. In 2014, the EU Commission issued the Notice on Agreement of Minor Importance, also known as ‘de minimis notice’, by virtue of which it has clarified that the de minimis doctrine is applicable in case of agreements:

(i) whose aggregate market share amounts to less than 10 per cent on any relevant market in the case of agreement between competitors; or (ii) whose market share held by each of the parties does not exceed 15 per cent on any of the relevant markets in the case of agreement between non-competitors.

EU Commission, Notice on agreements of minor importance which do not appreciably restrict competition under Article 101(1) of the Treaty on the Functioning of the European Union, 2014/C 291/01 (2014). 31 TFEU, Article 101(3) reads as follows:

The provision of paragraph 1 may, however, be declared inapplicable in case of: (i) any agreement or category of agreements between undertakings; (ii) any decision or category of decisions by associations of undertakings; and (iii) any concerted practice or category of concerted practices which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits, and which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; and (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question. 32 Block exemption regulations exist, for instance, with respect to vertical agreements, retail and distribution agreements, specialisation agreements, technology transfer agreements and car distribution agreements. A good example is the block exemption for vertical agreements introduced by the Regulation (EU) No. 330/2010, which prohibits the so-called ‘hardcore restrictions’, such as pricefixing agreements, market sharing and export restrictions. All other vertical agreements are permitted, on the condition that the market share of the supplier on the relevant market where he sells goods or services does not exceed 30 per cent. See, among others, Piet J. Slot and Martin Farley, An Introduction to Competition Law (Bloomsbury, 2017), at 63. 33 Council Regulation (EU) No. 487/2009 on the Application of Article 101(3) of the TFEU to Certain Categories of Agreements and Concerted Practices in the Air Transport Sector, OJ L 148/1 of 11 June 2009. 34 See, Mendes de Leon, Introduction to Air Law (2017), at 106–107. 35 Council Regulation (EC) No. 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L001/1 of 4 January 2003.

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10.3.2 Abuse of Dominant Position Article 102 TFEU governs abusive conduct by undertakings holding significant – that is, dominant – market power. It is of utmost importance to understand that dominance per se does not contravene EU competition law. It is, however, only the abuse of such dominance to pose serious concerns, as it follows from the wording of Article 102 TFEU: Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.36 Two key elements are here identified, namely: • a dominant position; and • an abuse of such market power. With respect to the first point, dominance is determined with regard to the market share the undertaking in question holds. A presumption of dominance usually exists when an undertaking holds a market share of 50 per cent or more.37 Yet, also market shares between 40 per cent and 50 per cent may amount to dominant position in certain markets.38 A significant market share does not itself provide sufficient evidence that an undertaking is dominant in a given market and, therefore, the mere analytical analysis of the market share cannot be conclusive as to the applicability of Article 102 TFEU.39 The term ‘abuse’ is not defined, and, hence, may be subject to interpretation. However, the EU Commission and the CJEU have clarified that abuse may occur either ‘horizontally’, vis-­à-vis competitors, when an undertaking reduces or impedes effective competition (for instance, creating barriers to new entries), or ‘vertically’, when it treats customers and suppliers unfairly in light of its dominant power.40

Did You Know? Article 102 TFEU provides itself a list of conduct and practices which are considered to constitute abuse of dominant position:

 directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

36 TFEU, Art. 102. 37 Case C-62/86, AKZO, Chemie B.V. v. EU Commission [1991] 1 ECR 3359. 38 Case 27/76, United Brands v. EU Commission; Case 85/76, Hoffmann-La Roche & Co. AG v. EU Commission [1979] ECR 461. 39 See, Damian Charles, Gareth Davies and Giorgio Monti, European Union Law: Cases and Materials, 2nd edn (Cambridge University Press, 2010), at 997–999. 40 See, Case 311/84, Telemarketing c. CLT & IPB [1985] ECR 3261.

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 limiting production, markets or technical development to the prejudice of consumers;

 applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

 making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

EU competition law does not require the establishment of a causal nexus between the dominant position and the abuse. The abusive conduct may also occur in a different market than the market, which is in fact dominated by the firm.41 Dominance must exist in a relevant market. The notion of relevant market has been seen by the EU Commission as the combination of an objective element (the product/service market) and a territorial component (the geographical market), which, as will be shown in the next section, raises interesting and topical questions with specific regard to air transport.

Definitions Relevant Product Market: “Comprises all those products and/or services, which are regarded as interchangeable or substitutable by the consumer, by reason of the products’ characteristics, their prices and their intended use”.42 Relevant Geographical Market: “Comprises the area in which the undertakings concerned are involved in the supply and demand of products or services, in which the objective conditions of competition are sufficiently homogeneous, and which can be distinguished from neighbouring areas because the conditions of competition are appreciably different in those areas.”43

10.3.3 Application of Articles 101 and 102 Treaty on the Functioning of the European Union to the Aviation Sector The provision under Article 101 TFEU has been frequently taken into consideration when assessing the legal nature and anti-­competitive effects of code-­sharing agreements and airline alliances. Since 1 May 2004, airlines have to self-­assess compliance of their cooperation with EU competition rules. If the EU Commission opens an investigation, it must demonstrate that cooperation may have as its object and/or effect the restriction of competition.

41 Case C-333/94, Tetra Pak v. EU Commission [1996] ECR I-5991. 42 EU Commission, Case No. COMP/M.3280, Air France/KLM merger procedure (2003), at 9. 43 Ibid., at 40.

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Did You Know? The TFEU did not expressly include air transport among the common transport policies, which the Union is mandated to pursue.44 However, in the well-­known Nouvelles Frontière Case (1986),45 the European Court of Justice (now CJEU) affirmed that air transport is subject to the general rules contained in the TFEU, including the basic principles of non-­discrimination and proportionality, as well as the competition rules now enshrined in Articles 101–109 of the Treaty. In particular, the Court found, among other things, that:

 Articles 101 and 102 are directly applicable to air transport; and  both national competition authorities and the EU Commission have the power,

under Articles 104 and 105, respectively, to apply the competition rules in the aviation sector.46

This judgement also confirmed an earlier decision rendered by the court in the so-­ called French Merchant Seamen Case in respect of maritime transport.47

The EU Commission has opened an investigation in relation to agreements involving all three international airline alliances,48 whereby it imposed remedies and offered commitments to the concerned airlines in order for the agreements to be approved. • In 2010, looking at an arrangement between British Airways, Iberia and American Airlines (Oneworld), the EU Commission imposed the release of a number of slots, especially at London Heathrow Airport, and the freezing of some frequencies in the North Atlantic market, as necessary remedies to countervail the distortive effects that such arrangement could have on certain transatlantic routes; • In 2013, the EU Commission accepted commitments offered by Air Canada, United and Lufthansa (Star Alliance) to address the Commission’s concerns that the parties’ 44 The only reference to air transport which can be found in the EU Treaty is that of Article 100(2), which entrusts the EU Parliament and Council, if needed, to adopt regulatory measures as to air transport: The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may lay down appropriate provisions for sea and air transport. They shall act after consulting the Economic and Social Committee and the Committee of the Regions. 45 Joint Cases 209 to 213/84, Ministère Public v. Asjes & Others [1986] ECR 1425 (also referred to as ‘Nouvèlle Frontieres Case’). 46 See, Cheng Jui-Lu, International Airline Alliances: EU Competition Law/US Antitrust Law, at 107. See also, John Milligan, European Union Competition Law in the Airline Industry (Kluwer Law International, 2017), at 88–91. 47 Case 167/73, EU Commission v. France [1974] ECR 359, 371. 48 See, Chapter 5.

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AVIATION COMPETITION LAW cooperation under a revenue-­sharing joint venture may harm premium passengers on the Frankfurt–New York route; • In 2015, the joint venture between Air France/KLM, Alitalia and Delta (SkyTeam) was approved provided the concerned carriers to release slots at Amsterdam Schiphol, Rome Fiumicino and New York Airport in order to enable competitors to offer tickets on such carriers’ flights between three major routes belonging to the transatlantic market, namely, Amsterdam–New York, Paris–New York and Rome–New York. In another case, the Airfreight case, the EU Commission fined 11 airlines, including British Airways, Lufthansa, Cathay Pacific and Air France/KLM, a total of approximately EUR 799 million. The alleged infringements involved for air freight services on routes between airports within European Economic Area (EEA); with the EU and outside the EEA; routes between EEA but not EU countries and third countries; and EU–Switzerland. The alleged infringements included coordination related to fuel and security surcharges, and the payment of commission on freight surcharges.49 All airlines apart from Qantas appealed the decision. In 2015, the CJEU annulled the EU Commission’s decision and revoked the fines. Following this decision, two years later, in 2017, the EU commission took a new decision in application of Article 101 TFEU, confirming its standpoint according to which the airlines had indeed put in place cartel behaviour.50 The decision has yet again been appealed and a new judgement from the CJEU is expected to be published in 2019–2020.51 Article 102 TFEU has had relatively little application in the air transport industry. Dominance was found, in the early 1990s, in relation to air services between London Heathrow and Dublin, notwithstanding the presence of another two air carriers serving such route.52 However, anti-­competitive abusive practices have been found with respect to the airport sector, whereby some airports have applied different airport charges to national carriers and airlines from other Member States. A notable case of abuse of dominant position regarded the so-­called Computer Reservation Systems (CRSs).53 Moreover, the scrutiny on the application of Article 102 TFEU is relevant in relation to the definition of the relevant market in the provision of air services, which outlines some interesting peculiarities. The term ‘relevant air services market’ is defined as an individual 49 See, Case COMP/39258 Airfreight Case (C(2010)7684 TO). See, Steven Truxal, Competition and Regulation in the Airline Industry (Routledge, 2012), at 85. 50 Case AT.39258 – Airfreight No. C(2017) 1742 Final. 51 See, Pablo Mendes de Leon, ‘Airlines as Allies: How to Manage the Market?’, in Jan Walulik (ed.), Harmonising Regulatory and Antitrust Regimes for International Air Transport (Routledge, 2019), at 34–35. 52 Decision of the EU Commission British Midland v. Aer Lingus, OJ 1992, L 96. See, Ben Van Houtte, ‘Community Competition Law in the Aviation Sector’, 38 Air & Space Law 2 (1993), at 63–65. 53 See, Mendes de Leon, Introduction to Air Law (2017), at 105. In the case London European/Sabena (1992), London European, who used to operate on the London Luton–Brussels route, lodged a complaint against the then Belgian flag carrier Sabena, as Sabena denied the complainant access to its own CRS, called Saphir, on the grounds that London European fares were too low. Consequently, London European was denied access to 80 per cent of the market and, in practice, it was forced out of that market. In 1998, the EU Commission obliged Sabena to display these flights on Saphir.

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AVIATION COMPETITION LAW route or a set of routes, which can be distinguished from the possible alternatives by virtue of specific characteristics as a result of which it is not interchangeable with those alternatives.54 The assessment is usually carried out on a case-­by-case basis in relation to a growing number of external factors, including the existence of alternative air services, the existence of alternative modes of transportation (in Europe, for instance, short- and medium-­ distance, high-­ speed rail services have been often considered as substitutable to air services),55 frequencies and pricing. The relevant geographical air services market is usually identified in relation to routes. Defining the geographical market in air transport is particularly complex as air transport is often provided over a number of different geographical areas. The tendency of the EU Commission is to focus on the so-­called ‘origin–destination approach’, in light of which, different geographical markets may be identified in the Rome–London, as well as in the Sevilla–Oslo market.

Did You Know? Direct v. Indirect Flights: In case of long-­haul flights, relevant markets may include indirect flights to the extent that these services are substitutable to non-­stop flights. This is so if indirect flights only result in a limited extension of the duration of the journey. Indirect and direct intra-­EU air services are usually considered as two ­different markets.56 Airport Substitutability: Different airports within the same city may constitute different markets for the purpose of competition law analysis. London’s five airports (i.e. Heathrow, Gatwick, City, Stansted and Luton) may constitute separate markets.57 The same has been found in relation to Frankfurt International Airport and Frankfurt-­ Hahn Airport.58 The degree of substitutability between the airports within the same city highly depends on the passenger’s final destination and the purpose of the passenger’s journey.59 54 Case 66/86, Ahmed Saeed Flugreisen and Silver Line Reisebüro GmbH v. Zentrale zur Bekämpfung unlauteren Wettbewerbs e.V. [1989] ECR 903, at 38. 55 Andrea Trimarchi, ‘Intermodal Air–Rail Agreements: Legal Aspects and Considerations’, 44 Air & Space Law 1 (2019), at 31–32. 56 The European Commission has differentiated between point-to-point passengers and connecting passengers in relation to the relevant origin and destination (O&D) routes. Connecting passengers and passengers flying only between two points were considered to belong to different relevant markets. See, EU Commission, Annual Analysis of the EU Air Transport Market 2016, Final Report (March 2017), at 153–162. In contrast to this, in Lufthansa/Eurowings the Bundeskartellamt considered point-to-point passengers and connecting passengers as belonging to the same relevant market. In any event, the effects of connecting traffic should be taken into account in the overall competition assessment of affected O&D routes. 57 British Midland v. Aer Lingus, para. 17. See also, EU Commission, Case/COMP A.38.477/D2 British Airways/SN Brussels Airlines (2003). 58 EU Commission notice concerning the case COMP/38.712 British Midland Ltd./Deutsche Lufthansa AG/Scandinavian Airlines System [2001], at 6. 59 See, British Airways/SN Brussels Airlines, at 6.

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Different Consumer Groups: A distinction is made between time-­sensitive and non-­ time sensitive passengers. This distinction usually coincides with the dichotomy business/leisure travellers.60 Such distinction is particularly relevant with regard to the assessment of whether indirect flights may constitute alternative and substitutable to non-­stop services.

10.3.4 State Aid EU Member States have often intervened with the aim of providing financial aid and support to their national (flag) carriers, which were not financially viable or even bankrupt. Such practice, also known as ‘State aid’, has evolved in light of the financial crisis of the 1990s, which forced several airlines to restructure their business as well as to rethink the manner they operated in order to be competitive. The most notable cases involved TAP Air Portugal, Air France, Alitalia, Olympic Airlines, Sabena and Malev.61 The TFEU contains a specific provision governing the practice of State aid, which expressly prohibits: […] any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.62 The EU Commission is entrusted with supervision authority and can either approve or prohibit a State aid, provided that the proposed aid has been previously notified to the Commission. Such assessment takes into account the so-­called ‘market investor’ and ‘proportionality’ principles. However, certain categories of State aid are allowed and considered compatible with the EU internal market, as per the wording of Article 107 TFEU itself.63 The Guidelines on State Aid to Airports and Airlines,64 published by the EU Commission in 2014, also exempt from the application of EU competition rules certain categories of aid, usually given to regional and secondary airports and to airlines serving those airports

60 Time-sensitive passengers are willing to pay a premium to have their requirements satisfied. On the contrary, for non-time sensitive passengers, savings on the price of the trip have priority over time constraints and flexibility. 61 See, Truxal, Competition and Regulation in the Airline Industry (2012), at 93–99. It is worth noting that not only have airlines been the recipients of State aid in the EU, but also airports. Major European airlines, such Swissair, Estonian Air, Sabena, Malev and Air Berlin were not granted aid and have disappeared as a consequence of bankruptcies. 62 TFEU, Art. 107(1). 63 TFEU, Art. 107(2). These include aid having a social character, in such instances as national disasters or market under the so-called public service obligation, as provided for under EU Regulation 2408/92. Public service obligation refers to the need to ensure adequate connectivity to remote areas or islands such as, for instance, the Greek islands, the Canary Islands or the Azores. 64 EU Commission, Guidelines on State Aid to Airports and Airlines, C(2014) 963.

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AVIATION COMPETITION LAW (start-­up aid), which can be justified in exceptional circumstances.65 Start-­up aid is allowed if it results – or is likely to result – in the enhancement of connectivity and accessibility, providing a significant contribution to the development of some critical regions or remote areas.

Did You Know? The Market Economy Investor Principle (MEIP) is in the Commission’s practice one of the entry points for economic analysis in State aid cases. Its purpose is to establish the extent to which an aid measure confers an economic advantage on the recipient of the aid. According to the MEIP, the credit approved or the investment undertaken should be considered as State aid in the meaning of Article 87(1) if the (monetary) compensation the State receives in exchange is lower than what a private investor would have requested under such circumstances.66 In other words, the legality of a measure shall be assessed in relation to the attitude which “a private investor would have had under normal market conditions at the time of the grant of the loan in question, having regard to the information available and developments available at that time.”67 This principle has also been called the market economy investor test, the informed investor test, the informed private investor test, as well as the prudent private investor test, among others.

There are several conditions necessary for the Commission to approve State aid measures. A preliminary and crucial condition is the airline being in a difficult financial situation. Further, the airline should not have had benefited from State aid in the recent past, as State aid are usually given on a una tantum basis. However, such parameter seems to be subject to interpretation and political discussion as airlines have been repeatedly granted financial aid,

65 Pursuant to Section 5.2 of the Guidelines on State Aid to Airports and Airlines, start-up aid can be justified provided they meet six conditions:

1.  they contribute to the achievement of a well-defined common objective; 2.  there is the need for a State intervention; 3.  other less distortive policy instrument would not allow the same objective to be reached; 4.  in the absence of an aid the same activity would not be able to expand; 5. the aid must be proportionate and, therefore, must not exceed 50 per cent of airport charges; and 6. the aid will not be conferred if the same route that the airline is to operate is already served by another airport (in the same catchment area) or by high-speed rail.

66 See, for further information, Magnus Schmauch, EU Law on State Aid to Airlines: Law, Economics and Policy (Lexxion, 2012), at 97–106. 67 See, Case T-16/96, Cityflier Express Ltd. v. EU Commission [1998] ECR II-757, at 76.

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AVIATION COMPETITION LAW even in short periods of time.68 Fundamental conditions include the obligation and commitment to pay back the aid and the establishment of a restructuring plan, which shall evaluate aspects, such as the dismissal of loss-­making routes, the renovation of the fleet, as well as employees’ mass-­redundancy.69

Case REPORT

Case REPORT

The Ryanair/Charleroi Case In 2004, the EU Commission found the existence of illegal aid, in the forms of financial benefits (i.e. airport charges) given to Ryanair by two airports in Brussels, including, in particular, Charleroi Airport. Ryanair was allegedly found to have concluded an agreement with the Walloon region (public entity owning the Charleroi Airport), by virtue of which certain benefits were indeed conferred to Ryanair. The agreement was found to be incompatible with the EU internal market.70   However, the CJEU, overturning the Commission’s decision, found that the Commission had not appropriately applied the market economy investor principle as the Walloon Region acted within its commercial activity and, therefore, partly annulled the previous decision. The court also noted that Ryanair’s advantageous commercial terms were obtained as a result of usual commercial negotiation rather than illegal financial State aid.71

The Alitalia Case In 2017, Alitalia, the Italian air carrier, was the recipient of a conspicuous total financial State aid of EUR 900 million granted as rescue aid within the meaning of EU competition law. In January 2018, the EU Commission opened an investigation affirming that such a loan may constitute State aid as it exceeds the six-­month limited time duration for the rescue loan under competition rules.72    The recent issue regarding Alitalia is only the latest in a long series of State aid provisions, which have de facto kept the carrier financially viable since the 1990s. Public funds were granted to Alitalia in 1996, 2001 and 2008. However, the EU Commission has interpreted such aid as not amounting to State aid.73

68 This is the case for Iberia, which has been financially supported in 1992 and 1995 by the Spanish Government, and Alitalia, which has received State aid in 1996, 2001, 2008 and 2017. 69 See, John Balfour and Solange Leandro, ‘State Aid in the Airline Industry: A Change in Focus’, 2 European State Aid Quarterly (2011), at 229. 70 See, EU Commission decision 2004/393/EC concerning advantages granted by the Walloon Region and Brussels South Charleroi Airport to the airline Ryanair in connection with its establishment at Charleroi, OJ 2003 C 18 of 30 April 2004. 71 Case T-196/04, Ryanair v. EU Commission; see also, EU Commission decision 2016/2069 concerning measures implemented by Belgium in favour of Brussels South Charleroi Airport and Ryanair, OJ 2004 L 137 of 12 October, 2014. 72 EU Commission, Press Release, State Aid: Commission Opens an In-Depth Investigation into Italian State Loan to Alitalia (23 April 2018). 73 See, for instance, Case T-296/97, Alitalia v. EU Commission [2000].

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Did You Know? EU competition law is also concerned with preventing the occurrence of competition distortion as a result of financial aid conferred by non-­ EU States to their national airlines. In this context, the Regulation (EU) No. 868/2004 was adopted as a means to “restore the equality of arms” between EU airlines and some third-­ country competitors.74 This Regulation, which has never been applied in practice due to its burdensome and farraginous nature, prohibits subsidisation (in any form) by non-­EU countries to their flag carriers, which have an impact on the EU aviation market. It also tackles unfair pricing practices put in place by such carriers. In this respect, serious concerns have arisen with respect to the commercial behaviour of airlines from the Gulf States, which are believed to benefit from both financial and non-­commercial benefits from their governments.75 In June 2017, a proposal for the adoption of a new regulation repealing Regulation 868/2004 was published by the EU Commission.76 In May 2019, after years of renegotiations, Regulation 868/2004 was eventually replaced by the new Regulation (EU) No. 2019/712.77

10.3.5 Airline Merger Control in the European Union Air transport has witnessed numerous attempts of cross-­border mergers. The entire industry is likely to shift from ‘traditional’ cooperation and alliance schemes towards an increasing phenomenon of cross-­border merges, financial investment in foreign airlines and full-­ function joint ventures.78 The impact of airline mergers is far from being marginal as, in practice, cross-­ borders concentrations may determine significant changes in airlines’ substantial ownership and effective control and, ultimately, affect the application of bilateral ASAs and licensing.79 74 Explanatory Memorandum of the Regulation (EU) No. 868/2004 of the European Parliament and Council concerning protection against subsidisation and unfair pricing practices causing injury to Community air carriers in the supply of air services from countries not Members of the European Community, OJ L 162 of 14 June 2006. 75 See, Sean McGonigle, ‘Past its Use-by Date: Regulation 868 Concerning Subsidies and State Aid in International Air Services’, 38 Air & Space Law 1 (2013), at 3. See also, Andrea Trimarchi, ‘EU Regulation 868/2004: Report of a Unilateral Approach in Regulating Unfair Subsidisation and Unfair Pricing Practices and its Failure’, 38 European Competition Law Review (2017), at 74–76. 76 Proposal for a Regulation of the European Parliament and of the Council on safeguarding competition in air transport, repealing Regulation (EC) No 868/2004, COM/2017/0289 Final – 2017. See also, Ulrich Schulte-Strathaus, ‘Is the European Commission Fulfilling Its Ambitious Aviation Strategy?’, 42 Air & Space Law 6 (2017), at 57. 77 Regulation (EU) No. 2019/712 on safeguarding competition in air transport, and repealing Regulation (EC) No. 868/2004 of 17 April 2019, OJ L 123/4 of 10 May 2019. 78 See, for instance, International Air Transport Association (IATA), The Future of Airline Distribution, 2016–2021 (2016), at 30. 79 See, Section 5.4.2.

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AVIATION COMPETITION LAW On this point, the EU has adopted the so-­called Merger Regulation,80 which is designed to declare incompatible with the EU common market any concentration81 that would significantly “impede effective competition […] as a result of the creation or strengthening of a dominant position”.82 As outlined by Article 1, the Regulation only applies to concentrations having a ‘Union dimension’, that is, where: • the combined aggregate worldwide turnover of all the undertakings concerned is more than EUR 5,000 million; and • the aggregate Union-­wide turnover of each of at least two of the undertakings concerned is more than EUR 250 million.83 In air transport, the provisions of the Merger Regulation have also been applied in cases of mergers between non-­EU airlines, which were found to meet the ‘Union dimension’ condition.84 While the scrutiny of key concepts, such as relevant market, dominance and distortion is conducted by the EU Commission in line with the assessment carried out under Articles 101, 102 and 107 TFEU, a significant difference can be found in the fact that mergers necessarily have to be notified in advance to the Commission. Therefore, merger control does not include self-­assessment. The Commission may approve the concentration unconditionally or prevent it from being implemented. If the concentration has already been implemented, but is found to be incompatible with EU law, the Commission may require the undertakings to restore conditions of effective competition by means of disinvestment. In practice, the Commission imposes conditions to be met before eventually approving the merger. This has been the Commission’s constant approach when scrutinising cross-­ border airline mergers. In 2014, for instance, the Commission cleared the Alitalia/Etihad merger, but required the two carriers to release slots at Rome and Belgrade airports. In the

80 Council Regulation (EU) No. 139/2004 on the control of concentrations between undertakings [2004] OJ L24/1 of 29 January 2004, as implemented by the following instruments: Commission Regulation (EU) No. 802/2004 [2004] OJ L133/1 of 30 April 2004; Commission Regulation (EU) No. 1033/2008 [2008] OJ L279/3 of 22 October 2008. 81 A concentration can usually result from full mergers, majority acquisitions, joint ventures and certain acquisitions of minority stakes, which determine shareholders sole or joint effective control. 82 See also, Regulation (EU) 139/2004, whereas (5). 83 Regulation (EU) 139/2004, Art. 1(2)(b). It clearly follows from the above provision that airline mergers are very likely to fall under the application of the Merger Regulation due to the large turnover airlines usually generate. However, even if the merger does not meet these thresholds, it is presumptively considered to have a Union dimension if: • the combined worldwide is EUR 2.5 billion; • in each Member State the aggregate is more than EUR 100 million; • in at least three Member States the aggregate turnover of each of at least two is more than EUR 25 million; and • the aggregate Union-wide turnover of at least two is greater than EUR 100 million. 84 See, Mendes de Leon, Introduction to Air Law (2017), at 113.

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AVIATION COMPETITION LAW same year, the IAG/Aer Lingus takeover was approved subject to the release of crucial slots at London Gatwick Airport.85 As observed, mergers raise serious concerns in relation to public aviation law, and, specifically, with regard to nationality requirements and the Regulation (EU) No. 1008/2008.86

10.4  United States Antitrust Regime 10.4.1 Introduction United States antitrust law finds its roots in the English common law tort of unfair competition, and, particularly, as a regulatory response to trusts companies emerged in the late 1880s. Although United States antitrust law is one of the oldest competition regulations worldwide, its application to the air transport sector became relevant only after the deregulation of the United States domestic air transport market in the 1970s, which gave the rise to new international liberal approaches, including the Open Skies policy.87 Its importance has been reiterated by the United States Supreme Court.88 As to its structure, United States antitrust law shows some similarities with EU competition law insofar as it outlaws commercial behaviour, such as: • price fixing; • monopolisation; • price discrimination; • predatory pricing; and • anticompetitive mergers and acquisitions.89 However, relevant differences exist as, for instance, • United States antitrust law does not systematically regulate the phenomenon of State aid;90 and 85 Ibid. 86 See, Chapter 5. 87 See, Section 5.3.3. 88 United States v. Topco Associations, Inc., 405 U.S. 596, 610 (1972). In this case, the United States Supreme Court found that: antitrust laws in general and the Sherman Act, in particular, are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms. 89 See, Douglas F. Broder, U.S. Antitrust Law and Enforcement: A Practice Introduction (EBSCO Publisher, 2010), at 2–4. 90 With regard to air transport, the United States DOT may grant certain subsidies to airlines operating services to smaller or remote airports, which might be otherwise unprofitable, as with the EU in relation to public service obligations, as mentioned above. See also, Truxal, Competition and Regulation in the Airline Industry (2012), at 107.

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AVIATION COMPETITION LAW • the framework relating to the enforcement of United States antitrust laws significantly differs. Theoretically, all United States antitrust regulations provide for criminal penalties. In practice, however, the United States federal authorities do not prosecute all antitrust breaches as criminal offences. Instead, they confine criminal prosecutions to hard-­core cartel activity and anticompetitive violations such as price-­fixing and bid-­rigging.91 United States antitrust laws include several federal acts, which specifically govern anti-­ competitive conduct. The most famous piece of legislation is the Sherman Act,92 enacted in 1980, which has strongly influenced competition regulation all around the world. This section will also take into consideration the Clayton Act (1914)93 concerning mergers and the Federal Trade Commission Act (1938)94 on the enforcement of antitrust laws.

10.4.2  Sherman Act 1890 Section 1 and Section 2 of the Sherman Act are the cardinal provisions of United States antitrust law and can be considered, somehow, as pioneers of Articles 101 and 102 of the TFEU, examined above, and of many other competition law provisions globally. • Section 1: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal […]”. • Section 2: “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony […]”. The terminology adopted under Section 1 is quite vague as all commercial contracts, at least in principle, restrain trade. However, the provision is only dedicated to those agreements that harm competition in the marketplace.95 In practice, Section 1 encompasses two categories of agreement: • the per se illegal agreements; and • agreements which are found illegal after being tested against the rule of reason.96 91 Broder, U.S. Antitrust Law and Enforcement: A Practice Introduction (2010), at 32–36. See also, Douglas F. Broder, A Guide to US Antitrust Law (Sweet & Maxwell, 2005), at 122–125. 92 Sherman Act of 2 July 1980, 15 U.S.C. §§1–7. 93 Clayton Act of 15 October 1914, 15 U.S.C. §§12–27. 94 Federal Trade Commission Act of 21 March 1938. 95 See, among others, Standard Oil Company of New Jersey v. United States, 221 U.S. 1 (1911). 96 Stephen F. Ross, Principles of Antitrust Law (The Foundation Press, 1993), at 15–20. A third hybrid category (quick-look) has been artificially created through judicial interpretation in relation to those practices whose anti-competitive effects are obvious and that have no apparent pro-competitive benefits and which, therefore, stand in between (i) and (ii).

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AVIATION COMPETITION LAW Illegal agreements are those agreements which are by their very nature against competition and usually include price-­fixing, agreements to allocate markets or customers and agreements to restrict production in order to create an artificial scarcity. All other restraints are assessed in conformity with the so-­called ‘rule of reason’. In such cases, the courts need to carry out a case-­by-case examination, taking into account all factors surrounding the conduct, such as economic circumstances and pro-­competitive aspects. Such restrains are considered illegal if they affect competition to a significant degree.97 Section 2 of the Sherman Act is directed to unilateral conduct and prohibits monopolisation and attempts of monopolisation. A monopoly power is deemed to exist when a corporation – that is, undertaking – has the “power to control market prices or exclude competition”.98 As with EU competition rules, the simple possession of a monopoly power does not automatically determine monopolisation. Accordingly, Section 2 only applies in the event monopoly power is wilfully acquired and maintained through improper means.99 In practice, United States courts have established that a relevant market is composed by a product and a geographical component. As to the latter, territorial dimensions of the market may very much depend on the nature of the company involved, as, theoretically, a geographical market could be “as small as a city or metropolitan area, a country or as large as the entire world”.100 Section 1 equally applies to both horizontal and vertical agreements. Code-­share agreements, joint ventures and airline alliances may restrain competition and fall under the application of the Sherman Act. Participants in transatlantic airline alliances have been exempted (immunised) from the application of antitrust laws through the grant of so-­called antitrust immunity, which is usually conferred in lieu of greater benefits and public interests. On the other hand, monopolisation is not an unknown phenomenon in the airline sector, which has traditionally been characterised by oligopoly domination – a very limited number of competitors in the market – and State presence.101 In the case American Airlines Inc. v. United States, the court found that direct interaction, aiming at price predation, falls under Section 2 even though it has not resulted in monopolisation or in a formal agreement. Also, parallel behaviour, which are indirect interaction in their nature, fall under the application of Section 2.102

10.4.3 Institution of the Antitrust Immunity Currently, the United States Department of Transportation (DOT) has the authority to grant antitrust immunity to airline alliances. As a matter of fact, antitrust immunity has been  97 Ibid. See also, Harry First, ‘Antitrust Law’, in Alan B. Morrison (ed.), Fundamentals of American Law (Oxford University Press, 1999), at 432–433.  98 See, American Tobacco Co. v. United States, 321 U.S. 781, 811 (1946).  99 Monopoly power is lawfully acquired if attained through growth or development as a consequence of a superior product, business acumen or historic accident. Broder, U.S. Antitrust Law and Enforcement: A Practice Introduction (2010), at 87–91. 100 See, First, ‘Antitrust Law’ (1999), at 435. The ‘country’ approach was, for instance, adopted by the United States Supreme Court back in 1945 in the well-known ALCOA case. United States v. Aluminium Co. of America et al.148 F.2d, 416, 424 (1945). 101 See, Gustavo Pinto, ‘Competition and Predation in the Airline Industry’, 74 Journal of Air Law & Commerce 3 (2009), at 5. 102 See, American Airlines Inc. v. United States, 743 F. 2d 1114 (1984). See also, Ross, Principles of Antitrust Law (1993), at 42–48.

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AVIATION COMPETITION LAW traditionally granted to alliances and joint ventures, which include American carriers or airlines from countries that maintain Open Skies bilateral relations with the United States.103 The notion of the antitrust immunity is not exclusive to the American tradition. It seems to resemble, at least in principle, the exemption provided under Article 101(3) TFEU, with the notable exception that, in the United States, antitrust immunities are granted ex ante, that is, prior to the agreement or joint venture being operational.104 Granting of antitrust immunity still remains subject to governmental approval and, therefore, it is not easy to draw common fundamental elements required for alliance to be immunised. However, two basic requirements may be identified. First, an Open Skies policy or agreement105 between the countries where the applicant airlines are established is deemed by the United States DOT as a necessary requisite. This parameter evidently pertains to governmental interests and liberal aviation policy that the United States has been bringing forward since the deregulation process. In the second place, the agreement must demonstrate that it is concluded in the public interest. Pursuant to 49 USC 41308 and 41309, DOT can only grant an approval when the agreement meets the public interest test and the benefits linked to the agreement cannot be attained through less anti-­competitive alternatives.106 Accordingly, applicant airlines are generally required to provide an overview of the full-­itinerary city pairs, containing a point

103 Economic Analysis Group, Antitrust Division, US Department of Justice (DOJ), Antitrust Immunity and International Airline Alliances (February, 2011), at 14–16. 104 See, ICAO, Antitrust Immunity for Airline Alliances, Working Paper ATConf/6-WP/85 (2013). Many jurisdictions include exemption mechanism, shaped on the United States antitrust immunity. These include Japan, South Korea and Singapore. 105 See, Section 5.3.3. 106 49 U.S.C. 41308 (b) establishes that: When the Secretary of Transportation decides it is required by the public interest, the Secretary, as part of an order under section 41309 or 42111 of this title, may exempt a person affected by the order from the antitrust laws to the extent necessary to allow the person to proceed with the transaction specifically approved by the order and with any transaction necessarily contemplated by the order.

Section 41309 outlines the filing and approval procedure as it states that: […] the Secretary of Transportation shall approve an agreement, request, modification, or cancellation referred […] when the Secretary finds it is not adverse to the public interest and is not in violation of this part. However, the Secretary shall disapprove – or, after periodic review, end approval of, an agreement, request, modification, or cancellation, that substantially reduces or eliminates competition unless the Secretary finds that –

(a) (i) the agreement, request, modification, or cancellation is necessary to meet a serious transportation need or to achieve important public benefits (including international comity and foreign policy considerations); and (ii) the transportation need cannot be met or those benefits cannot be achieved by reasonably available alternatives that are materially less anticompetitive; or (b) an agreement that: (i) is between an air carrier not directly operating aircraft in foreign air transportation and a carrier subject to subtitle IV of this title; and (ii) governs the compensation the carrier may receive for the transportation.

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AVIATION COMPETITION LAW located in the United States, which is the object of the agreement.107 Due to the significant antitrust concerns that such agreements raise, antitrust immunity is usually granted for a limited number of years, allowing the DOT to periodically review their potential anti-­ competitive implications.

Case REPORT

KLM/Northwest108 The KLM/Northwest is not only the first case, but also the most popular one concerning antitrust immunity and international airline alliances. It dates back to 1992 when the United States and the Netherlands concluded the first ‘Open Skies’ bilateral air services agreement.109 It may be considered as the cornerstone of modern commercial air transport insofar as it brings together elements of public international aviation law, international relations and competition/antitrust regulation. The DOT granted antitrust immunity to KLM and Northwest in 1993, after monitoring that such alliance would not affect competition on the transatlantic routes Amsterdam–Detroit and Amsterdam–Minneapolis St. Paul. By virtue of the antitrust immunity, the two carriers were no longer required to seek permission from either government to provide services, carry passengers and offer particular fares between any point in the Netherlands and any point in the United States.110

Case REPORT

British Airways/American Airlines In the late 1990s, British Airways and American Airlines entered into a commercial agreement to cooperate over a large number of transatlantic routes between the United States and the United Kingdom. However, in such case, antitrust immunity was not granted before 2002.    This case is highly significant as regards two elements. The first, which is a political one, relates to the fact that, at the time of the first joint application to the DOT, the United Kingdom and the United States had not entered into an Open Skies agreement and were not likely to do so in the immediate future. The lack of a common United States/United Kingdom liberal policy was not favourably seen by the United States Government, which, indeed, dismissed the application.    A second point of interest refers to the definition of the geographical market. The DOT considered London Heathrow and London Gatwick airports as constituting two separate markets as most consumers do not consider the USA–Gatwick services a substitute for the USA–Heathrow service.111    Antitrust immunity was eventually granted subject to the necessity for the United Kingdom and the United States to conclude an Open Skies agreement and, more importantly, to the release of a large number of slots and facilities at London Heathrow to United States competitors. 107 See, Cheng Jui-Lu, International Airline Alliances: EC Competition Law/US Antitrust Law (2003), at 204–205. 108 See, among others, Mendes de Leon, ‘Airlines as Allies? How to Manage the Market’ (2019), at 24–26. 109 See, Section 5.3.3. 110 DOT Order 93–1–11 concerning the joint application of Northwest Airlines Inc. and KLM Royal Dutch Airlines (1992), at 13. 111 It is indeed reported that: “a specific airport will constitute a separate market if there is a large number of travellers who will rarely consider using alternative airports.” See, DOT Order OST-2001–11029–69 concerning the joint application of American Airlines Inc. and British Airways PLC (2002), 39. See also, Cheng Jui-Lu, International Airline Alliances: EC Competition Law/US Antitrust Law (2003), at 209.

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10.4.4 Airline Merger Control in the USA The United States equivalent to the Merger Regulation is contained in the Clayton Act, which was enacted in 1914 to regulate all antitrust concerns that the Sherman Act could not specifically address. Such a piece of legislation does not only regulate mergers and acquisitions, but it is also was directed to other distortive practices, such as price discrimination.112 Mergers and acquisitions are governed by Section 7 of the Clayton Act, which expressly prohibits every acquisition of stock made having the effect of lessening competition or creating a monopoly.113 Provisions concerning mergers and acquisitions are also enshrined in the Hart-­Scott-Rodino Act 1976,114 the Merger Guidelines 1992115 and the Joint Venture Guidelines 2000.116 As for EU competition rules, the framework in which a merger is assessed is very similar to the analysis conducted in the context of monopolisation (Section 2 of the Sherman Act). Accordingly, the scrutiny must identify: • the existence of a relevant market; • the market share or concentration resulting from the merger; and • the lessening of competition. Pursuant to the Merger Guidelines 1992, market concentration is calculated through a numerical index (the Herfindahl-­Hirschman Index (HHI).117 112 Broder, U.S. Antitrust Law and Enforcement: A Practice Introduction (2010), at 112–115. 113 Section 7 of the Clayton Act, which reads as follows: No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly. 114 Broder notes that: The HSR Act requires that parties to proposed mergers, acquisitions, and joint ventures of a specified minimum size notify the Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC) of their plans and (with some exceptions) wait at least thirty days before closing. The notification and waiting period give the government enforcement authorities time to examine the proposed transaction for compliance with Section 7 (and the other antitrust laws). The authorities may allow the transaction to proceed as planned or they may demand that the parties change or abandon the transaction. As a last resort, the FTC or DOJ can sue in federal court for an order preliminarily and permanently enjoining the transaction. See, Broder, U.S. Antitrust Law and Enforcement: A Practice Introduction (2010), at 113. Hart-ScottRodino Antitrust Improvements Act of 1976 as Section 7A of the Clayton Act, 15 U.S.C. §18a. 115 DOJ and FTC, 1992 Horizontal Merger Guidelines, 57 FR 41552 10 September 1992. 116 DOJ and FTC, 2000 Antitrust Guidelines for Collaborations Among Competitors, 64 Fed Reg 54483 (1999). 117 The greater the HHI, the greater the concentration. According to the guidelines: (i) any market with an HHI of less than 1,000 is deemed non-concentrated; (ii) a market with an HHI between 1,000 and 18,000 is moderately concentrated; and (iii) any market with an HHI that exceeds 1,800 is highly concentrated.

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AVIATION COMPETITION LAW The Hart-­Scott-Rodino Act established the so-­called ‘pre-­merger notification’ and requires, under certain circumstances, the parties of a merger to submit a prior notification to the Federal Trade Commission (FTC) and the DOJ.

Case REPORT

General Electric/Avio (Aviation Manufacturing Industry) In July 2013, the FTC challenged General Electric Company’s USD 4.3 billion acquisition of the aviation business of Avio SpA, alleging that the acquisition gave GE the ability and incentive to disrupt the design and certification of an engine component designed by Avio for rival aircraft manufacturer Pratt & Whitney. GE and Pratt & Whitney were the only engine manufacturers for Airbus’ A320neo aircraft and competed head-­to-head for A320neo sales. Avio was the sole designer for the accessory gearbox on the Pratt & Whitney engine for that Airbus aircraft. As a condition to the transaction, the FTC prohibited GE from interfering with Avio’s design and development work on the accessory gearbox for the Pratt & Whitney engine, and from accessing Pratt & Whitney’s proprietary information about the accessory gearbox that was shared with Avio.

The United States air transport industry has been characterised by a substantial wave of mergers between United States airlines. As a matter of fact, the three major United States airlines are nothing but the result of three gigantic mergers with significant political implications.118 In United/Continental, for instance, the DOT’s main concerns were only evoked by the competitive state of routes out of Newark airport. However, high market concentrations, which would go against the Merger Guidelines, had accrued in favour of the merging carriers in several other routes from/to their hubs. Yet, relevant elements, including overlapping routes and price coordination, were disregarded in Delta/Northwest and United/Continental. On the other hand, there have not been many instances of cross-­border acquisitions in United States carriers involving a foreign element. As noted, the strong domestic protectionism of the United States government towards its national airlines has been transposed into very stringent rules concerning nationality requirements and foreign investment.119 The current restriction on foreign ownership of United States airlines stands at 25 per cent of the controlling stock and 49 per cent of the total stock. Also, United States aviation law provisions provide that domestic air carriage is only permitted through the use of United States registered aircraft.120

10.5  Development of Fair Competition in International Air Transport: Role of the International Civil Aviation Organization National law is not a successful “vehicle for the promotion of competition internationally”.121 Differences in competition regimes, asymmetric stages of liberalisation among States and 118 Delta Airlines (merger with Northwest in 2008); United Airlines (merger with Continental in 2010); and American Airlines (merger with US Air in 2012). 119 See, Section 5.4.1. 120 49 U.S.C. §§40101–49101, 14 C.F.R. §§ 211–298. See, Truxal, Competition and Regulation in the Airline Industry (2012), at 112. 121 Mendes de Leon, ‘Airlines as Allies? How to Manage the Market’ (2019), at 31.

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AVIATION COMPETITION LAW distinct regulatory frameworks for international air transport determine an ‘unlevel playing field’ in which airlines globally compete.122 The issue of fair competition is currently one of the key points of interest in international aviation relations. There is a rather broad acceptance of the principle that a fair and equal opportunity to compete is required to allow airlines to survive and grow in a liberalised global market.123 However, there is currently no commonly accepted definition of the terms ‘fair competition’ and ‘level playing field’; nor does the Chicago Convention 1944 explicitly refer to such notions.124 However, Article 44 of the Chicago Convention 1944 makes it clear that, among the objectives of the ICAO is that of insuring that the rights of contracting States “are fully respected and that every contracting State has a fair opportunity to operate international airlines”.125 The concept of ‘fair opportunity’ is not defined in the Chicago Convention 1944. Nor has the ICAO clarified its meaning and extent. It is by and large understood to refer to the abstract notion of ‘equality of arms’ – equal opportunity to access markets – which, however, has not found concrete application in the air transport sector.126 Furthermore, the uneven position of international air carriers is not only a product of discrepancies in regulatory regimes. It also arises from other circumstances, such as peculiar geographical location, different taxation regimes and unequal labour standards and conditions.127 The importance of the development of a common policy concerning fair competition in air transport has been acknowledged by ICAO and individual States since the 1990s.128 As ICAO has observed, it must form part of a comprehensive common policy aiming at the full and complete liberalisation of international air transport services, which also includes ­regulation of nationality requirements, bilateral air services agreements and regulatory ­harmonisation.129

122 See, Peter P. Fitzgerald, A Level Playing Field for ‘Open Skies’ (Eleven Publishing, 2016), at 89–91. 123 See, ICAO, Fair Competition in International Air Transport, Working Paper ATConf/6-WP/4 (2013), at 3. 124 The Chicago Convention 1944 mentions the expression ‘reasonable competition’ in Article 44. However, ‘fair competition’ seems to be in contraposition with ‘free competition’, whose economic theory has characterised commercial relations in the last century and which refuses the idea of regulatory intervention in market behaviour. 125 Chicago Convention 1944, Art. 44(f). 126 “A fair opportunity to compete is not a guaranteed right to operate air services to the detriment of fair competition”. See, Ruwantissa Abeyratne, Competition and Investment in Air Transport: Legal and Economic Issues (Springer, 2016), at 204. 127 See, Andrea Trimarchi, ‘Airline Non-Commercial Advantages and Fair Competition: The Issue of Labour Conditions’, in Jan Walulik (ed.), Harmonising Regulatory and Antitrust Regimes for International Air Transport (Routledge, 2019), at 149–150. 128 See, for instance, ICAO Working Paper, World-Wide Air Transport Conference on International Air Transport Regulation: Present and Future, ATConf/4-WP/7 (April, 1994). 129 International Civil Aviation Organization (ICAO), Air Transport Regulation: Present & Future, Working Paper ATConf/4-WP/7, April 1994, at 8.

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Did You Know? ICAO has drafted a template ASA to provide guidance to States. In particular, it is interesting to include Article 15 of such a template ASA, which promotes a so-­ called ‘fair competition’ clause. Article 15 – Template ASA ‘Fair Competition’ Each Party agrees: (a) that each designated airline shall have a fair and equal opportunity to compete in providing the international air transportation governed by the agreement; and (b) to take action to eliminate all forms of discrimination or unfair competitive practices adversely affecting the competitive position of a designated airline of the other Party.

As shown above, ICAO has developed clauses concerning fair competition and the convergence of domestic competition law regimes in its Template ASA with the intent to offer a helpful tool for individual States.130

Recommended Literature John Balfour and Solange Leandro, ‘State Aid in the Airline Sector: A Change in Focus’, 2 European State Aid Quarterly (2011), 224–236. Douglas F. Broder, U.S. Antitrust Law and Enforcement: A Practice Introduction (EBSCO Publisher, 2010). Angela Cheng Jui-­Lu, International Airline Alliances: EC Competition Law/US Antitrust Law (Kluwer Law International, 2003). Harry First, ‘Antitrust Law’, in Alan B. Morrison (ed.), Fundamentals of American Law (Oxford University Press, 1999). Brian F. Havel and Gabriel S. Sanchez, The Principles and Practices of International Aviation Law (Cambridge University Press, 2014). Moritz Lorenz, An Introduction to EU Competition Law (Cambridge University Press, 2013. John Milligan, European Union Competition Law in the Airline Industry (Kluwer Law International, 2017). Anestis S. Papadopoulos, The International Dimensions of EU Competition Law and Policy (Cambridge University Press, 2010). Steven Truxal, Competition and Regulation in the Airline Industry (Routledge, 2012). Jan Walulik (ed.), Harmonising Regulatory and Antitrust Regimes for International Air Transport (Routledge, 2019). Richard Whish and David Bailey, Competition Law, 9th edn (Oxford University Press, 2018).

130 Article 19 of the Template ASA is dedicated to the alignment of national competition laws.

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Points for Further Research • What does ‘fair competition’ refer to? • Should air services fall under the jurisdiction of the WTO? • What are the similarities and divergences between EU competition law and United States antitrust law? • Is current EU State aid law sufficient to prevent anti-­competitive effects resulting from non-­EU countries’ commercial behaviour? • How does competition regulation affect the behaviour of other aviation stakeholders, including airports and aircraft manufacturers?

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Chapter 11

Regulation of Environment in Aviation LEARNING OBJECTIVES  Learn about international legal regime governing environmental protection and climate change.  Understand the basic principles of international environmental law.  Gain insight with regard to ICAO’s activity towards reduction of greenhouse gas (GHG) aviation emissions.  Become familiar with the issue of aircraft noise and its regulation.  Identify the main features of CORSIA, as well as the differences and potential conflict with the EU ETS.

11.1 Introduction The environmental impact of aviation is multifaceted. Aircraft engines emit noise, heat, particulates and gases that contribute to climate change and, in general, to pollution. Currently, civil aviation only accounts for some 2–3 per cent of total global greenhouse gas (GHG) emissions, which itself constitutes around 3 per cent of the total man-­made impact to climate change. These numbers are expected to grow by around 3–4 per cent per year.

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REGULATION OF ENVIRONMENT IN AVIATION

Global Greenhouse Gas Emissions by Economic Sector Other Energy Electricity and Heat Production

10% 25% Industry

Transportation

21%

24%

14% 6%

Agriculture, Forestry and Other Land Use

Buildings Figure 11.11

Only as an example, in 1990–2010, the total GHG emissions from the aviation industry increased by some 40 per cent.2 As Figure 11.1 shows, the whole transportation sector amounts to 14 per cent of global GHG emissions.3

1 One may believe that aviation is the largest contributor to CO2 emissions. However, aviation is only responsible for 14 per cent of total CO2 emissions from transportation as a whole. Such emissions are expected to grow to 23 per cent by 2050. United States Environmental Protection Agency, ‘Global Greenhouse Gas Emissions Data’, www.epa.gov/ghgemissions/global-greenhouse-gasemissions-data. See, Armand de Mestral, Peter P. Fitzgerald and Md Tanveer Ahmad (eds), Sustainable Development, International Aviation and Treaty Implementation (Cambridge University Press, 2018), at 2–4. 2 Eric Ashby, ‘International Aviation and Climate Change’, The Michigan Journal of Environmental & Administrative Law (2017), at 1; see also, Center for Climate and Energy Solutions, Reducing Carbon Dioxide Emission From Aircraft, at 4–5, link available at: www.c2es.org/federal/executive/ epa/reducing-aircraft-carbon-emissions. 3 United States Environmental Protection Agency, ‘Global Greenhouse Gas Emissions Data’, www. epa.gov/ghgemissions/global-greenhouse-gas-emissions-data.

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REGULATION OF ENVIRONMENT IN AVIATION

Did You Know? The most abundant greenhouse gases in the Earth’s atmosphere are:4

 Water Vapour  Carbon Dioxide  Methane  Nitrous Oxide  Ozone  Chlorofluorocarbons  Hydrofluorocarbons As a result of such increasing phenomenon, the issue of protecting the environment has undoubtedly become one of the most crucial topics in aviation law and policy. In fact, ICAO has significantly focused on the delineation of regulatory measures to reduce emissions from air transport. This effort culminated in 2016 with the adoption of a global Market Based Measure (MBM); the so-­called Carbon Offsetting Reduction Scheme for International Aviation (CORSIA),5 which, in line with ICAO’s objectives, was designed to contribute to the increase of fuel efficiency by 2 per cent per year and to stabilise global aviation emissions at 2020 levels,6 has marked an ‘historical breakthrough’.7 CO2 emissions, which are at the centre of aviation stakeholders’ environmental discussions, arguably contribute to climate change, whose effect are, however, commonly perceived as intangible and distant.8 Therefore, due to this perception, inaction may result. Air transport activities are trans-­boundary in their nature. In other words, even a single international air service may involve a multitude of countries and different jurisdictions. A distinctive feature of aviation is therefore the complexity of tracing and monitoring emissions from aircraft, as a country is exclusively responsible for emissions that result from

4 Intergovernmental Panel on Climate Change (IPCC), and World Meteorological Organization (WMO), IPCC first Assessment Report (1990), at 5. 5 See, ICAO Assembly Resolution A39–3 (2016), Consolidated Statement of Continuing ICAO Policies and Practices Related to Environmental Protection – Global Market-Based Measures (MBM) Scheme. 6 See, Uwe M. Erling, ‘International Aviation Emissions under International Civil Aviation Organization’s Global Market Based Measure: Ready for Offsetting?’, 42 Air & Space Law 1 (2017), at 1–2. 7 Elena Carpanelli, ‘Between Global Climate and Governance and Unilateral Action: The Establishment of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)’, in Jan Walulik (ed.), Harmonising Regulatory and Antitrust Regimes for International Air Transport (Routledge, 2019), at 125. 8 See, Suzi Kerr (ed.), Global Emissions Trading: Key Issues for Industrialized Countries (Edward Elgar Publishing, 2000), at 7–10.

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REGULATION OF ENVIRONMENT IN AVIATION activities that occur within its territory.9 In this context, reference shall be made to Principle 21 of the Stockholm Declaration,10 which represents a cornerstone of international environmental law and affirms that States have the right: to exploit their own resources pursuant to their own environmental policies, and the responsibility that activities within their jurisdiction or control do not cause damage to the environment of other states or of areas beyond the limits of national jurisdiction.11 This complexity may be easily perceived by looking at the following example. Flights from the United States west coast to the United Kingdom generally produce the following emissions: •

29 per cent in United States airspace

•

37 per cent in Canadian airspace

•

25 per cent over the high seas

•

9 per cent in United Kingdom airspace12

ICAO has developed a methodology allowing passengers to calculate the carbon emissions of their air travel. The ICAO Carbon Emission Calculator13 applies the best publicly available industry data and takes into account various factors, such as route specifics and aircraft types. Table 11.1 shows the total emissions produced by a passenger of a one-­way direct flight from Seoul, South Korea, to Vancouver, Canada. T11.1  ICAO Carbon Emission Calculator Departure Airport

Arrival Airport

Number of Cabin Passengers Class

ICN (Seoul, YVR 1 South (Vancouver, Korea) Canada)

Economy

Trip

Aircraft Fuel Total Burn/Journey Passengers’ CO2/ Journey

One-­Way

50,130.4 kg 304.5 kg

  9 European Parliament, Emission Reduction Targets for International Aviation and Shipping (2015), at 29–31. 10 Declaration of the United Nations Conference on the Human Environment, UN Doc. A/ Conf.48/14/Rev. 1(1973); 11 ILM 1416 (1972). 11 Ibid., Principle 21. 12 See, Brian F. Havel and Gabriel S. Sanchez, Principles and Practice of International Aviation Law (Cambridge University Press, 2014), at 219. 13 www.icao.int/environmental-protection/Carbonoffset/Pages/default.aspx.

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Definitions Climate: This is usually defined as the average weather, or more rigorously, as the statistical description in terms of the mean and variability of relevant quantities over a period of time ranging from months to thousands or millions of years.14 Climate Change: This refers to a change of climate, which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is, in addition to natural climate variability, observed over comparable time periods.15 Greenhouse Gas (GHG): This comprises “those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and remit infrared radiation”.16 In other words, it is a gas that absorbs and emits radiant energy within the thermal infrared range. The reduction of GHG emissions is a rather crucial element of regional and domestic policies. The EU Emissions Trading Scheme (EU ETS)17 is certainly the most famous – and controversial – example of regional regulation of GHG emissions, including, starting from 2012, aviation emissions.18 As will be shown, the EU ETS raised tremendous debate, in particular with respect to its extraterritorial application and legality. The validity of the measure was indeed subject to clarifications by the CJEU.19 Aircraft can also be responsible for the production of noise pollution, in particular during take-­off, descent and landing. Not only do engines generate harmful noise, but so also do the mechanical systems of the aircraft and flying at low speeds and low altitude. 14 Intergovernmental Panel on Climate Change (IPCC), Annex III, Glossary, in Climate Change 2013: Fifth Assessment Report on the Intergovernmental Panel on Climate Change (Cambridge University Press, 2013), at 1150. 15 United Nations Framework Convention on Climate Change (UNFCCC), Art. 1. See also, Intergovernmental Panel on Climate Change (IPCC), Aviation and the Global Atmosphere (Cambridge University Press, 1999), at 341. Climate change refers to a change in the statistical properties of the climate during an extended period of time usually decades or even longer and is usually characterised by “rising sea levels, storm surges, melting glaciers, changes in precipitation patterns making ecosystems, water resources, food security, human health and settlements and society vulnerable”. See also, Cleo Paskal, Global Warming: How Environmental Economic and Political Crises Will Redraw the World Map (Key Porter Books, 2010), at 26. 16 UNFCCC, Art. 1. 17 See, for a more detailed analysis of the EU ETS, Section 4.3. See, European Parliament and Council Directive 2003/87 of 13 October 2003 Establishing a System for Greenhouse Gas Emission Allowance Trading within the Community and Amending Council Directive 96/61, OJ L275 of 25 October 2003. 18 See, Ulrich Steppler and Angela Klingmüller, ‘EU Emissions Trading Scheme and Aviation: Quo Vadis?’, 34 Air & Space Law 4/5 (2009), at 254. 19 Michael Milde, ‘The EU Emissions Trading Scheme: Confrontation or Compromise? A Unilateral Action Outside the Framework of ICAO’, 61 ZLW 2 (2012), at 173–186; Pablo Mendes de Leon, ‘Enforcement of the EU ETS: The EU’s Convulsive Efforts to Export its Environmental Values’, 37 Air & Space Law 4/5 (2012), at 293–296.

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REGULATION OF ENVIRONMENT IN AVIATION Aircraft noise may result in damages, such as, sleep disturbance, hearing impairment and stress. Also, an increase of aircraft noise over populated areas may result in a depreciation and devaluation of properties, subject, therefore, to material quantification. As a result, aircraft noise constitutes a central issue in aviation environmental law, with a specific Volume (Volume 2) of Annex 16 to the Chicago Convention 1944 specifically dedicated to the regulation of such matter.

11.2 Need for a Sustainable Aviation Aviation is shown to be the fastest growing mode of transportation in terms of passenger numbers. Passenger traffic, expressed in revenue passenger kilometres, has grown almost double the world’s average GDP growth rate.20 The aviation industry, however, is growing rapidly, outpacing technological innovation, therefore, accelerating climate change and global warming. GHG emissions largely come from international civil aviation and involve both passenger and freight carriage.21 According to the Intergovernmental Panel on Climate Change (IPCC), aviation is the second largest transport sector contributor to climate change, accounting for 14 per cent of total global emissions, with the largest being car-­road transport, which amounts to almost 75 per cent.22 The Oxford Dictionary describes the term ‘sustainable’ as “capable of being borne or endured; supportable; bearable or able to be maintained at certain rate or level”.23 Sustainability is subject to a wide range of general and specific interpretations both in the general political debate and specifically within the aviation sector.24 Notwithstanding potential interpretative problems, ICAO,25 as well as the EU,26 have, even recently, reiterated their commitment towards a sustainable development with regard to aviation activities. Technical measures aimed at increasing aviation sustainability, may include: •

the development of different types of supersonic aircraft;

•

hybrid and electric aircraft;

•

unmanned aircraft systems;

20 Intergovernmental Panel on Climate Change, Aviation and the Global Atmosphere (Cambridge University Press, 1999), at 23. See, Alejandro Piera, Greenhouse Gas Emissions from International Aviation: Legal and Policy Challenges (Eleven Publishing, 2015), at 12–13. See also, Annela Anger, ‘Including Aviation in the European Emissions Trading Scheme: Impacts on the Industry, CO2 Emissions and Macroeconomic Activity in the EU’, 16 Journal of Air Transport Management (2010), at 100–101. 21 Md Tanveer Ahmad, Climate Change Governance in International Civil Aviation (Eleven Publishing, 2016), at 16. 22 Intergovernmental Panel on Climate Change, Aviation and the Global Atmosphere (Cambridge University Press, 1999), at 25. 23 Oxford Dictionary, online edn, ‘Sustainable’. 24 Eurocontrol, Defining Sustainability in the Aviation Sector, EEC/SEE/2004/003 (2004), at 21. 25 See, ICAO, ‘Aviation & Sustainability: Determining the Complex Environmental, Economic and Social Impacts that are Defining Aviation’s Future’, ICAO Journal, 66(6) (2011). 26 See, European Aviation Safety Agency (EASA), European Environmental Agency and Eurocontrol, European Aviation Environmental Report 2019 (2019).

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bio-­based aviation fuels; and

•

increase efficiency in air traffic management (ATM).

Measures may also be of a non-­technical, that is, for instance, financial nature, and include: •

fuel taxes;

•

environmental charges; and

•

other MBMs measures.

These have resulted in fuel efficiency and environmental performance improvement, as a modern generation of aircraft alone has, for instance, determined a reduction of GHG emissions by 70 per cent over the last four decades.27

Did You Know? The aviation industry, as a whole, has significantly committed towards the future improvement and use of alternative fuels. As early as 2007, ICAO explicitly recognised the need to “promote improved understanding of the potential use, and the related emissions impacts, of alternative aviation fuels”.28 The use of sustainable alternative fuels in aviation is indeed believed to represent an important means of reducing GHG aviation emissions.29 A number of airlines, such as, KLM, Air Canada and Finnair, have launched test flights using other types of alternative fuels. The three most promising forms of sustainable alternative fuels are jatropha, camelina and algae.30 However, high prices are also believed to may raise concerns in relation to widespread use of such fuels.31

However, sustainable measures are believed not to be effective, if not accompanied by regulatory and financial intervention.32 Alternative and bio-­fuels, for instance, are unlikely to become available in sufficient quantities, as they would be beneficial not only for the aviation industry. Also, bio-­fuels may have a negative impact on the entire chain of production.

27 See, Airbus, Global Market Forecast: Future Journeys 2013–2032, at 13. 28 ICAO, A36–22, Consolidated Statement of Continuing ICAO Policies and Practices Related to Environmental Protection, Appendix I. 29 See, ICAO, A38–18, Consolidated Statement Continuing ICAO Policies and Practices Related to Environmental Protection – Climate Change. 30 Piera, Greenhouse Gas Emissions from International Aviation: Legal and Policy Challenges (2015), at 28. 31 Ibid. 32 Ibid.

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11.3 Regulation of Environment in Air Transport 11.3.1 United Nations Framework Convention on Climate Change and the Kyoto Protocol The United Nations Framework Convention on Climate Change (UNFCCC) does not mention aviation emissions.33 Within the UNFCCC, in December 2015, 196 States convened in Le Bourget, France, and signed the Paris Agreement 2015,34 dealing specifically with GHGs mitigation, adaptation and finance. Also, under this Agreement, no specific reference to aviation is made. The Chicago Convention 1944, which governs international civil aviation, is, surprisingly, yet reasonably,35 silent on environmental issues. Nor does the Chicago Convention 1944 make express mention to the concepts of ‘sustainable aviation’ and ‘emissions’. Moreover, environmental protection is not among the missions that ICAO is explicitly mandated to accomplish.36 However, a broader interpretation of the objectives that ICAO is entrusted to pursue should also take into account that the organisation shall “insure a safe and orderly growth of international civil aviation throughout the world”37 and “promote generally the development of all aspects of international civil aeronautics”.38 As a result, ICAO seems to represent, at least, a competent forum for discussing environmental issues relating to aviation. In 1997, more than 60 States adopted the Kyoto Protocol 1997 as a means to implement the principles enshrined in the UNFCCC.39 This instrument, which entered into force in 2005, establishes emission targets aiming to reduce overall GHG emissions to at least 5.2 per cent below 1990 levels and sets out a target for the industrialised economies. The Kyoto Protocol 1997 is not concerned with emissions from aviation, which are explicitly excluded from its scope of application.40 One of the most relevant provisions of the Kyoto Protocol 1997 concerning aviation is contained in Article 2.2, which specifically provides that:

33 See, for instance, Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 226. 34 Paris Agreement, in UNFCCC, COP Report No. 21, Addendum, at 21, opened for signature 13 December 2015, U.N. Doc. FCCC/CP/2015/10/Add,1, entered into force 29 January 2016. 35 The Chicago Convention 1944 could not foresee the environmental impact that aviation activities would have in the following decades. 36 See, Chicago Convention 1944, Art. 44. On a global level, international environmental matters were not legally and expressly devoted to a single international organisation. As an example, the UN Charter does not mandate the UN with rule-making powers in the field of environmental protection. See also, ICJ, Nuclear Weapons Case [1996], paras 25 et seq. 37 Chicago Convention 1944, Art. 44(a). 38 Ibid., Art. 44(i). 39 Kyoto Protocol to the United Nations Framework Convention on Climate Change, adopted on 11 December 1997, 2303 UNTS 162, entered into force on 16 February 2005. 40 Ahmad, Climate Change Governance in International Civil Aviation (2016), at 86.

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REGULATION OF ENVIRONMENT IN AVIATION the Parties […] shall pursue limitation or reduction of emissions of greenhouse gases […] from aviation and marine bunker fuels, working through the International Civil Aviation Organization and the International Maritime Organization, respectively.41 This norm has been subject to significant political debate and legal discussion, as many commentators have raised doubt with respect to whether ICAO has been conferred with an explicit or implicit mandate, if any at all, to deal with GHG emissions.42 Neither the provision itself nor the jurisprudence have indeed clarified the phrase ‘working through’.43 However, it is unquestionable that, in practice, ICAO has been widely recognised as one of the main international fora entrusted to pursue “all aviation matters related to the environment”.44

11.3.2 International Civil Aviation Organization and Annex 16 Since the adoption of the Kyoto Protocol 1997, ICAO has developed legal instruments concerning environmental issues, as well as established a Committee on Aviation Environmental Protection (CAEP), designated to formulate policies with regard to climate change.45 States that have signed the Kyoto Protocol 1997 are required to regularly report to ICAO on changes in their GHG emissions from international aviation activities. The Kyoto Protocol 1997 also clarifies that emissions are attributed to the country in which they occur.46 Harmonisation of environmental standards in air transport is the main core of Annex 16, which, originally adopted in 1971 to regulate aircraft noise, now comprises four volumes – three of which, are specifically concerned with environmental protection:47 41 Kyoto Protocol 1997, Art. 2.2. 42 The reference to ‘emissions from aviation’, for instance, seems to suggest that ICAO must deal with emissions from both domestic and international aviation. ICAO only deals with international matters concerning civil aviation. See, Paul S. Dempsey, Public International Air Law (Institute and Centre for Research in Air & Space Law, 2009), at 450–452. Furthermore, criticism has been raised in relation to the fact that ICAO is neither a party to the Kyoto Protocol, and therefore is not bound by its provisions, and that the mandate is unclear with regard to its practical implementation. Under this line of reasoning, “ICAO is simply a forum”. Piera, Greenhouse Gas Emissions from International Aviation (2015), at 43. 43 Ahmad, Climate Change Governance in International Civil Aviation (2016), at 87. 44 See, ICAO A32–8 and ICAO A33–7. Already in 1995, through Resolution A31–11, ICAO affirmed that “while the Kyoto Protocol recognises that ICAO is the appropriate body to address aviation emissions, it should be noted that ICAO’s authority in this regard does not derive from the Kyoto Protocol”. It should be noted that also EASA, in the EU, and IATA, globally, are significantly involved in the reduction of GHG emissions. 45 Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 230. 46 See, Uwe M. Erling, ‘How to Reconcile the European Union Emissions Trading System (EU ETS) for Aviation with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)?’, 43 Air & Space Law 4/5 (2018), at 374. 47 Annex 16 to the Chicago Convention 1944, which addresses aircraft noise in addition to emissions, lays out limited standards for aircraft engines with respect to discharges of hydrocarbon, carbon monoxide and nitrogen oxides. See, Brian F. Havel and Gabriel S. Sanchez, ‘International Aviation Emissions Agreement’, 36 Harvard Environmental Law Review (2012), at 355.

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Volume 1 – Aircraft noise;

•

Volume 2 – Aircraft engine emissions;

•

Volume 3 – Aeroplane CO2 emissions; and

•

Volume 4 – Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

However, SARPs have a questionable mandatory legal status48 and, therefore, Annex 16 has been subject to a comprehensive overhaul.49 Starting in 2010, the ICAO Assembly developed a series of principles concerning the implementation of GMBMs.50 Mitigation measures may include aircraft technology improvements, operational improvements and sustainable alternative fuels, all of which are of a technical nature.

Did You Know? The principle of Common But Differentiated Responsibilities and Respective Capabilities (CBDR) permeates the spirit of the UNFCCC. However, one of the Chicago Convention 1944’s basic principles establishes that there shall not be, at least in theory, discrimination between contracting States,51 and, hence, seems to collide with the above CBDR vocation. Translated into practice, such conflict may have significant implications. Following the CBDR principle, for instance, Canada would have to commit and act towards reduction or limitation of GHG emissions, whereas countries, such as Qatar and Singapore would not, although representing the fastest-­growing and significant aviation markets worldwide. This would evidently result in discrimination between contracting States. As a matter of fact, the ICAO Council, in 2015, issued a statement clarifying that the CBDR is not binding for the organisation, but it could, nevertheless, be adopted and followed in future development of regulatory and policy material.52    The CBDR is accompanied by a number of further cardinal principles of international environmental law. These include, for instance:

 Polluter pays principle;  Principle of good neighbouring and international cooperation;  Principle of sustainable development; and  Precautionary principle. 48 See, Section 4.3. 49 Ibid. 50 See, for instance, Pablo Mendes de Leon, Vincent Correia, Uwe M. Erling and Thomas Leclerc, Possible Legal Arrangements to Implement a Global Market Based Measure for International Aviation Emissions, Study for the Directorate General Climate Action of the EU Commission (2015), at 32–34. 51 The non-discrimination principle is embraced in a number of provisions of the Chicago Convention 1944 and is believed to find its basis in Article 44(g). 52 ICAO-C-MIN 181/22, Council, 181st Session, Minutes of the Twenty-Second Meeting. See also, Piera, Greenhouse Gas Emissions from International Aviation (2015), at 49–50.

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11.3.3  Carbon Offsetting Reduction Scheme for International Aviation In October 2016, after years of negotiation, ICAO adopted the Resolution A39–3 establishing CORSIA, a measure designed to achieve the goal of carbon-­neutral growth in the aviation industry after the year 2020.53 CORSIA addresses emissions and offsetting by focusing on reductions outside the industry54 and is expected to significantly diminish aviation’s contribution to climate change and global warming, although some commentators have doubted its long-­term benefits.55 As to its structure, the scheme is based on a basket of measures, and, more specifically, may be divided into four pillars:56 1. Green aircraft technologies – include fleet renewals, aerodynamics improvement higher engine performance; 2. Operational measures – include air traffic flow management, performance based navigation (PBN), aerodrome design and improvement; 3. Sustainable alternative fuels – include alternative fuels to reduce the carbon footprint of aviation;57 and 4. Global MBM – including CORSIA. The peculiar element of CORSIA is that is does not provide any limitation as to the growth of the total emissions, provided that emissions are compensated by offset units emitted from other industries.58 The level of emissions measured in 2019–2020 will be set as a benchmark. The level of emission above such a benchmark will constitute the amount required to be offset in any given year.59 Airlines, which will be assigned an amount of emissions during the first phase, will have to report on annual basis.60 CORSIA’s implementation timeline has a tripartite structure: •

Pilot phase (2021–2023)

•

First phase (2024–2026)

•

Second phase (2027–2035)

53 ICAO, with its Resolution A38–18, decided to implement a GMBM aiming at increasing fuel efficiency by 2 per cent per year. 54 See, ICAO, ‘What is CORSIA and How Does it Work?’, www.icao.int/environmental-protection/ Pages/A39_CORSIA_FAQ2.aspx. 55 Ahmad, Climate Change Governance in International Civil Aviation (2016), at 97. No one sector can effectively combat climate change alone, […] as failure in one sector will pass on an heavy burden on other sectors. […] It is true that no market-based measure can provide any long-term, permanent solution to the problem of emissions. As economic measures, market-based measures can only create pressure on the industry to adopt various initiatives, mainly technical measures, to decrease their environmental footprint. 56 Erling, ‘International Aviation Emissions under International Civil Aviation Organization’s Global Market Based Measure: Ready for Offsetting?’ (2017), at 3–4. 57 See, Section 4.2. 58 Ibid. 59 Ashby, ‘International Aviation and Climate Change’ (2017), at 2. 60 CAO, A-39–3, No. 9.

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REGULATION OF ENVIRONMENT IN AVIATION In the pilot and first phases, the scheme will only apply to routes between States that have voluntarily agreed to implement the measure.61 All remaining international flights will not fall under the application of CORSIA. The second phase is mandatory upon those States, whose share of aviation activities account for more than 0.5 per cent of total international revenue tonne kilometre.62 Table 11.2 provides a visual representation of CORSIA’s three-­phased implementation.63 Table 11.2  Implementation of CORSIA Pilot Phase

First Phase

Voluntary States can volunteer to be part of the scheme from 2021 (more States are encouraged to volunteer) Monitoring, Operators in States included will offset emissions based on the average CO2 Reporting and growth of the aviation sector Verification to set the Baseline

Second Phase Mandatory Exemptions: Small islands, least developed countries, land-­ locked developing countries, and States which have less than 0.5% of air traffic (Exemptions may still volunteer) Operators will offset based on average CO2 growth of the sector

Offset obligations shift to include over 20% of individual operator growth

Offset obligations shift to be over 70% based on individual operator growth

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2035 2035 Over 80% of the Growth in Air Traffic CO2 After 2020 will be Offset

Finally, Resolution A39–3 also provides a review of CORSIA, which will be conducted by the ICAO Council, every three years, starting in 2022, to determine its impact on aviation growth and evaluate potential amendments.64

Did You Know? CORSIA is not applicable to:

 aircraft with less than 5,700 kg of maximum take-­off weight  humanitarian, medical and fire-­fighting operations  operators emitting less than 10,000 tonnes of CO2 per year 61 Ibid. 62 Ibid. These numbers will be based on revenue tonne kilometre and will, approximately, cover thirty-five–forty States. See, Erling, ‘International Aviation Emissions under International Civil Aviation Organization’s Global Market Based Measure: Ready for Offsetting?’ (2017), at 6. 63 See, Aviation Benefits Beyond Borders, ‘CORSIA Explained’, https://aviationbenefits.org/ environmental-efficiency/our-climate-plan/corsia-explained/. 64 Erling, ‘International Aviation Emissions under International Civil Aviation Organization’s Global Market Based Measure: Ready for Offsetting?’ (2017), at 10.

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 new operators for three years or until the year in which their annual emissions exceed 0.1 per cent of total emissions in 2020, whichever occurs first.65

11.4 Air Service Agreements and Recent Developments Although ICAO’s involvement in the delineation of global policies concerning the protection of the environment dates back to the late 1990s, significant and tangible steps have been taken only in recent times. For instance, some criticism has been moved to the organisation, which has often been said to have engaged in climate change discussions only after the threat posed by the unilateral EU ETS.66 As a result of a slow global advancement in this respect, States began to discuss environmental protection in their air services agreements (ASA).67 However, these measures were included primarily “to protect the commercial interests of […] airlines”.68 Most ‘Open Skies’ ASAs69 currently contain a specific clause broadly regulating the environment. Notwithstanding the fact that the topicality of environmental issues is recognised on a bilateral level, the potential implementation of new environmental measures is evaluated with exclusive regard to the market access rights granted. In other words, ASAs’ environmental clauses are usually only concerned with the potential effects that environmental policies or measures may have on the actual exchange of traffic rights granted in the ASA itself.

Did You Know? As an interesting means of reference, a sample clause concerning environmental protection is included here, as is found, for instance, in Article 18 ‘Environment’ of the EU/Canada Open Skies ASA:70 The Parties recognise the importance of protecting the environment when developing and implementing international aviation policy. Without prejudice to the rights and obligations of the Parties under international law and the Convention, each Party within its own sovereign jurisdiction shall have the right to take and apply the appropriate measures to address the environmental impacts of air transport provided that such measures are applied without distinction as to nationality. The Parties recognise that the costs and benefits of measures to protect the environment must be carefully weighed in developing international aviation policy. When a Party is considering proposed environmental measures, it 65 ICAO, A-39–3, at 12. 66 See, Section 11.5. 67 See, for a detailed reference to ASAs, Sections 5.3 and 5.4. 68 Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 241. 69 See, Section 5.3.3. 70 Agreement on Air Transport between Canada and the EU and its Member States [2009], OJ L 207 of 6 August 2010.

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should evaluate possible and adverse effects on the exercise of rights contained in this Agreement, and, if such measures are adopted, it should take appropriate steps to mitigate any such adverse effects. The Parties recognise the importance of working together, and within the framework of multilateral discussion, to consider the effects of aviation on the environment and the economy, and to ensure that any mitigating measures are fully consistent with the objectives of this Agreement. When environmental measures are established, the aviation environmental standards adopted by International Civil Aviation Organization in Annexes to the Convention shall be followed except where differences have been filed. The Parties shall endeavour to consult each other on matters of the environment, including on planned measures likely to have a significant effect on the international air services covered by this Agreement, with a view to achieve compatible approaches to the extent possible. Consultations shall start within 30 days of receipt of such a request, or any other period of time where mutually determined.

The above example represents a standard environmental ASA clause. As a matter of fact, almost all Open Skies Agreements include such provisions or a reference to environmental protection. The practical relevance of these clauses is, however, disputed. On the one hand, environmental safeguard provisions in ASAs do not seem to contribute in a significant manner to enhancing environmental protection. On the other hand, however, environmental ASA clauses may be extended in their scope so as to include cooperative arrangements, reciprocal imposition of MBMs, joint research programmes and ATM efficiency common strategies.71

11.5 European Union Emissions Trading Scheme Aviation emissions have been included in the EU ETS since 2012. In fact, the EU ETS has been extended in order to cover GHG emissions produced by the aviation industry by virtue of the Directive (EU) No. 2008/101,72 which according to EU law, requires legal transposition in each individual EU Member State. The EU ETS, which is still in force within the EU, covers close to half of the EU’s anthropogenic emissions of CO2 and 40 per cent of its total GHG emissions. According to the EU Commission, the inclusion of aviation emissions was crucial as these “are higher than those from certain entire sectors covered by the EU ETS”.73 The scope of application of the scheme intended to cover all commercial flights landing in

71 Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 241. 72 European Parliament and Council Directive 2008/101 of 19 November 2008, amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community [2009] OJ L 8 of 13 January 2009. 73 European Commission, Press Release Memo/11/139, Questions & Answers on Historic Aviation Emissions and the Inclusion of Aviation in the EU’s Emission Trading System (EU ETS) (2011), at 4.

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REGULATION OF ENVIRONMENT IN AVIATION or departing from the territory of an EU Member State, having no regard to the nationality of the airline operating the air service. The inclusion of air transport activities in the scheme is structured as follows: •

A number of GHG emission allowances is determined on the basis of the number of total emissions of the previous year;

•

At 85 per cent if these allowances are attributed to operators for free;

•

The remaining 15 per cent of total allowances are assigned by auction; and

•

Operators that do not produce such emissions, as well as those that need a higher number of allowances are entitled to ‘trade’ allowances.

The EU ETS works on the ‘cap and trade’ principle.74 A cap is set on the total amount of certain greenhouse gases that can be emitted by installations covered by the system. The cap is reduced over time so that total emissions fall. Within the cap, companies receive or buy emission allowances, which they can trade with one another as needed. They can also buy limited amounts of international credits from emission-­saving projects around the world. The limit on the total number of allowances available ensures that they have a commercial value. After each year, a company must surrender enough allowances to cover all its emissions, otherwise heavy fines are imposed. According to general EU law principles, the implementation of sanctions is left to individual Member States, which are required to ensure that penalties are “effective, proportionate and dissuasive”.75 As penalties are set at 100 EUR per tonne of CO2 in excess, imposition of these fines may have a significant impact on operators’ activities. As of 2017, fines have been imposed to over 70 aircraft operators, for a total of more than EUR 25 million.76 EU law also provides the opportunity for Member States to request the EU Commission to impose an operating ban on aircraft operators that are do not comply with the Directive.77 Such ban, however, seems to be ineffective. Furthermore, an operator is not allowed to transfer emission allowances, if its emission report, which must be submitted annually, is

74 Thus, By ‘cap and trade’ we mean a system where a governmental authority establishes a ceiling on the amount of carbon a particular industrial sector (or sectors) may release during a specific period of time […] and firms are free to trade in a secondary market their exceeding allowances. Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 218. 75 Directive 2003/87/EC, Art. 16(1). 76 The United Kingdom is reported to have imposed the higher number of penalties (22), whereas Italy imposed the largest single fine to an operator operating without a permit (EUR 12.3 million ). See, EU Commission, ‘The EU Emissions Trading System (EU ETS)’, https://ec.europa.eu/clima/ sites/clima/files/factsheet_ets_en.pdf. See also, Transform, ‘UK Imposes Most ETS Fines’, https:// transform.iema.net/article/uk-imposes-most-ets-fines. 77 Directive 2003/87/EC, Art. 16(5).

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REGULATION OF ENVIRONMENT IN AVIATION not verified or correct.78 If a company reduces its emissions, it can keep the spare allowances to cover its future needs or else sell them to another company that is short of allowances.79 The status of the EU in international environmental law is peculiar. As a signatory of the Kyoto Protocol 1997, the EU is subject to the provision of this treaty.80 In addition, the EU is not a party to ICAO, having only an observer status within the Organisation. However, the EU, as well as each sovereign State, has jurisdiction on imposing measures concerning the protection of the environment.81

Did You Know? The EU ETS received significant opposition by ICAO and some individual States. Notably, the main issues related to the (extra)territorial application of the EU ETS, which, in its formulation, was conceived to extend to aviation activities not taking place in EU’s territory.82 The EU based its defence by means of invoking the application of the principle of non-­discrimination, upon which the Chicago Convention 1944 is shaped. On the other hand, the EU put forward the argument according to which the validity of the EU ETS derives from the provision of Article 12 of the Chicago Convention 1944.83   On 21 December 2011, the Court of Justice of the European Union (CJEU) rendered its decisive judgement on the validity of the EU ETS.84

 The Directive (EU) 2008/101, including aviation in the EU ETS, does not have

to be evaluated in accordance with the principles of the Chicago Convention 1944, as the EU, not being a party to such treaty, is not bound by its provisions;85

78 Directive 2003/87/EC, Art. 15. 79 See, EU Commission, ‘The EU Emissions Trading System’, https://ec.europa.eu/clima/policies/ets_ en. 80 Annex B to the Kyoto Protocol 1997. See also, Erling, ‘How to Reconcile the European Union Emissions Trading System (EU ETS) for Aviation with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)?’ (2018), at 380. 81 See, Mendes de Leon, ‘Enforcement of the EU ETS: The EU’s Convulsive Efforts to Export its Environmental Values’ (2012), at 287. 82 Pietro Manzini and Anna Masutti, ‘The Application of the EU ETS System to the Aviation Sector: From Legal Disputes to International Retaliations?’, 37 Air & Space Law 4/5 (2012), at 308. 83 Chicago Convention 1944, Article 12 provides that contracting States have an obligation to adopt measures to ensure that all aircraft (whether national or foreign) flying over or manoeuvring within its territory must comply with the rules and regulations concerning the flight and manoeuvre of aircraft there in force. 84 CJEU, Case 366/10, Air Transport Association of America (ATA) and US Airlines v. the UK Secretary of State for Energy and Climate Change. 85 Manzini and Masutti, ‘The Application of the EU ETS System to the Aviation Sector: From Legal Disputes to International Retaliations?’ (2012), at 308–309.

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 The EU has the competence to subject any aircraft flying in the territory of one of its Member States to its unlimited jurisdiction and, therefore, to the application of EU law;86

 The EU ETS is legally valid and legitimate as it does not collide with the content of the EU/US Open Skies Agreement.

It must be observed that, still now, the CJEU’s findings cause disagreement and discussion, as they are believed to expressly disregard not only the principles of the Kyoto Protocol 1997 and the Chicago Convention 1944, but also international customary law.87    As a matter of fact, in 2012, the United States enacted the EU ETS Prohibition Act of 2011, which prohibits United States airlines from participating in the EU ETS.     The application of the EU ETS to extra-­EU flights was suspended by the ‘stop-­theclock’ Decision No. 377/2013/EU88 for emissions occurring in 2012, and by Regulation (EU) No. 421/201489 for emissions occurring in 2013–2016, in order to give ICAO time to develop and agree a global market-­based measure. Flights between airports inside the EU remain covered by the ETS.

It remains unclear how the EU ETS will be applied after CORSIA’s implementation. From an ICAO perspective, flights between EU Member States are international aviation activities; thus, all intra EU-­flights occurring from 2027 and 2035 will be simultaneously be subjected to CORSIA and EU ETS.90 Moreover, it remains to be seen whether the revision of the EU ETS, which is expected in 2021 and will open the fourth phase of the scheme (2021–2030), will address the potential coexistence between the two schemes.91 

86 This represents, however, one of the most controversial aspects of the Court’s reasoning. As Prof. Mendes de Leon underlines: “Either the US has unlimited jurisdiction – which it has not, and certainly not on the basis of the Chicago Convention to which it is not a party – or its jurisdiction is limited by applicable international law”. Mendes de Leon, ‘Enforcement of the EU ETS: The EU’s Convulsive Efforts to Export its Environmental Values’ (2012), at 294. 87 Ibid. 88 Decision No. 377/2013/EU of the European Parliament and of the Council of 24 April 2013 derogating temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, OJ L 113 of 25 April 2013. 89 Regulation (EU) No. 421/2014 of the European Parliament and of the Council of 16 April 2014 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions, OJ L 129 of 30 April 2014. 90 Erling, ‘International Aviation Emissions under International Civil Aviation Organization’s Global Market Based Measure: Ready for Offsetting?’ (2017), 11–12. 91 See, https://ec.europa.eu/clima/policies/ets_en.

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11.6 Aircraft Noise The problem of aircraft noise is widely recognised within the aviation community. As observed, Volume 1 of Annex 16 to the Chicago Convention is entirely dedicated to set out minimum standards with particular regard to six areas of aircraft noise: 1. procedures for describing and measuring aircraft noise; 2. human tolerance to aircraft noise; 3. aircraft noise certification; 4. criteria for establishing abatement procedures; 5. abatement procedures for ground run-­up; and 6.

land-­use control.

ICAO Member States are responsible for the evaluation and certification of aircraft and their compliance with SARPs.92 Aircraft noise, including sonic boom, may cause damage to persons and property, especially in proximity of airports.93 The standards adopted by ICAO reflect the improvements in the manufacture of aircraft engines, taking into account, at the same time, the effectiveness of newly developed materials that are capable.94 Also, in 2016, during its 39th session, the ICAO Assembly reiterated its commitment towards limiting or reducing the number of people affected by significant aircraft noise.95 From a national point of view, crucial airports in Europe, such as Frankfurt and both London Heathrow and Gatwick Airports, have adopted flight night restrictions, banning any activity at night and allowing only limited landing activity at late evening and early morning. The United Arab Emirates, Qatar and India, in contrast, are among the countries that do not regulate night flight activity at airports.  Reduction of aircraft noise is also strictly connected to technological improvement, as it is a fact that the aircraft manufacturer industry is striving towards a quieter aviation. It is estimated, for instance, that the Airbus A350–900, as well as the Boeing 787–900 have

92 See, Havel and Sanchez, The Principles and Practice of International Aviation Law (2014), at 247. 93 Pablo Mendes de Leon, ‘Liability of Airports for Noise Hindrance: A Comparative Analysis’, 11 The Korean Journal of Air and Space Law (1999), at 179–181. In fact, as early as 1978, ICAO established a Subcommittee for the study of liability issues for damage caused by noise and sonic boom. See, for more information, Michael Milde, ‘ICAO Subcommittee on Liability for Damage Caused by Noise and Sonic Boom’, 3 Air & Space Law 3 (1978), at 184. 94 Peter Davies and Jeffrey Goh, ‘Air Transport and the Environment: Regulating Aircraft Noise’, 28 Air & Space Law 3 (1993), at 126. 95 ICAO A39–1, Consolidated Statement of Continuing ICAO Policies and Practices Related to Environmental Protection – General Provisions, Noise and Local Air Quality. See also, Maha M. Sameh and Julian Scavuzzi dos Santos, ‘Environmental Sustainability Measures for Airports’, in Armand de Mestral et al. (eds), Sustainable Development, International Aviation and Treaty Implementation (2018), at 79.

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REGULATION OF ENVIRONMENT IN AVIATION reduced the area impacted by noise by at least 2.4 square-­km than the aircraft they replace.96

Did You Know? Supersonic involves a speed greater than that of sound, which:

 at sea level  at a temperature of 21 °C  under normal atmospheric conditions is 1,238 km/h. Supersonic flights cause sonic booms which are the audible part of a shock wave.   A notable example of a civil aircraft capable of flying supersonic was the Concorde which flew at 2,179 km/h or Mach 2.2. Due to the loud noise produced by a sonic boom and the potential for physical damage to property, the Concorde faced restrictions on where it could fly above the speed of sound.   There are currently no civil aviation flights operating supersonic, though there are rumours regarding the fact that supersonic aircraft may re-­enter the scene. While Annex 16, Volume 1 states in Chapter 12 that there are no SARPs for supersonic aircraft97 and “ICAO continues its efforts towards developing a Standard for future supersonic aircraft, discussions continue on the sonic boom measurement schemes and procedures for future supersonic aircraft.”98

On an international level, the Rome Convention 195299 may be interpreted as implicitly referring to damage caused by aircraft noise. Under Article 1, indeed, damage may be caused to persons on the surface of the Earth due to the mere passage of aircraft in flight. This may include damage arising from aircraft noise.100 However, aircraft noise does not generally involve transboundary environmental pollution. Also, it would be quite burdensome that damage is the direct consequence of aircraft noise. As a result, such an international regime does find application in the context of aircraft noise, as noise will be governed by domestic regulations.101   96 Sustainable Aviation, Progress Report (2017), at 10. Link available at: www.sustainableaviation. co.uk/progress-reports/.  97 See, ICAO, ‘Emissions from Supersonic Aeroplanes’, AN-Conf/13-WP/211 (1 October 2018).  98 ICAO, ‘Supersonic Aircraft Noise Standards Development’, www.icao.int/environmental-protection/ Pages/Supersonic-Aircraft-Noise-Standards-Development.aspx.  99 See, Chapter 8. 100 Rome Convention 1952, Art. 1: “Any person who suffers damage on the surface shall, upon proof only that the damage was caused by aircraft in flight or by any person or thing falling therefrom, be entitled to compensation as provided by the Convention”. 101 See, Ruwantyssa Abeyratne, Legal and Regulatory Issues in International Aviation (Transnational Publishers, 1996), at 292–293.

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Did You Know? ICAO, as well as the EU have embraced the notion of ‘balanced approach’ in regulating aircraft noise, which, pursuant to Annex 16, consists of: identifying the noise problem at an airport and then analysing the various measures available to reduce noise through the exploration of four principal elements, namely reduction at source, land-­use planning and management, noise abatement operational procedures and operating restrictions, with the goal of addressing the noise problem in the most cost-­effective manner. 

The concept of ‘balanced approach’ is also contemplated at the EU level. The EU Regulation No. 598/2014,102 which is primarily concerned with aircraft noise and noise at airports,103 provides that operating restrictions to limit or reduce aircraft noise shall be implemented “in accordance with the balanced approach”.104 In other words, according to the ‘balanced approach’, operating restrictions shall always represent the last possible resort. 

Recommended Literature Md Tanveer Ahmad, Climate Change Governance in International Civil Aviation (Eleven Publishing, 2016). Patricia Birnie, Alan Boyle and Catherine Redgwell, International Law and the Environment, 3rd edn (Oxford University Press, 2009). Uwe M. Erling, ‘International Aviation Emissions under International Civil Aviation Organization’s Global Market Based Measure: Ready for Offsetting?’, 42 Air & Space Law 1 (2017), 1–12. Brian F. Havel and Gabriel S. Sanchez, Principles and Practice of International Aviation Law (Cambridge University Press, 2014). ICAO, ‘What is CORSIA and How Does it Work?’, www.icao.int/environmental-­protection/Pages/ A39_CORSIA_FAQ2.aspx. Alexandre Kiss and Dinah Shelton, Guide to Environmental Law (Nijhoff Publishers, 2007). Pablo Mendes de Leon, ‘Enforcement of the EU ETS: The EU’s Convulsive Efforts to Export its Environmental Values’, 37 Air & Space Law 4/5 (2012), 287–306. Armand de Mestral, Peter P. Fitzgerald and Md Tanveer Ahmad (eds), Sustainable Development, International Aviation and Treaty Implementation (Cambridge University Press, 2018). Michael Milde, ‘The EU Emissions Trading Scheme: Confrontation or Compromise? A Unilateral Action Outside the Framework of ICAO’, 61 ZLW 2 (2012), 173–186. Alejandro Piera, Greenhouse Gas Emissions from International Aviation Law: Legal and Policy Challenges (Eleven Publishing, 2015). 102 Regulation (EU) No. 598/2014 of the European Parliament and of the Council on the Establishment of Rules and Procedures with Regard to the Introduction of Noise-Related Operating Restrictions at Union Airports within a Balanced Approach and Repealing Directive 2002/30/EC, OJ L 173 of 16 April 2014. 103 The Regulation applies to all noise restriction measures adopted after 13 June 2016. See, Joanna Langlande, ‘Noise Restrictions Measures and the “Balanced Approach”: The Situation at BrusselsNational Airport’, 42 Air & Space Law 3 (2017), at 323. 104 Regulation (EU) 598/2014, Art. 1.

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Points for Further Research

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•

What are the basic sources of aviation environmental law?

•

How does the principle of Common but Differentiated Responsibilities and Respective Capabilities affect international aviation activity?

•

What are the main features of CORSIA?

•

To what extent has the EU ETS set a cornerstone in the field of regional and international environmental law?

•

How is aircraft noise currently regulated?

Chapter 12

Suborbital Transportation and the Link to Space Law

LEARNING OBJECTIVES  Gain a basic understanding of the different suborbital activities and vehicles.  Learn the core definitions for this subject.  Gain a basic understanding of the links and differences between aviation and space law  Know the difference between the functionalist approach and the spatialist approach.  Be aware of the core space law treaties and other texts.

12.1 Introduction Aviation and space technologies are no longer monopolised by States and are now increasingly being employed by private entities for commercial activities.1 This paradigm shift has 1 Democratisation of aviation and space technology and activities did not happen at the same time, with space only recently going through the commercialisation phase.

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SUBORBITAL TRANSPORTATION AND SPACE LAW allowed for the advent of commercial suborbital activities. While the activities and vehicles used in this developing area are varied, there are nevertheless commonalities with both traditional aviation and space activities. Due to this observation, there is general agreement between States, organisations and individuals that either aviation law or space law should regulate this area in some form or another, or in some instances both legal regimes. Therefore, this chapter will highlight suborbital activities, as well as the current legal environment, due to the relevance with international aviation.

Definitions International Law: There is currently no definition of ‘suborbital’, its activities or vehicles under international law. United Kingdom:



(4) ‘sub-­orbital activity’ means launching, procuring the launch of, operating or procuring the return to earth of: (a) a craft to which subsection (5) applies, or (b) an aircraft carrying such a craft, but does not include space activity.2 (5) This subsection applies to: (a) a rocket or other craft that is capable of operating above the stratosphere; (b) a balloon that is capable of reaching the stratosphere carrying crew or passengers.3

United States: (19) ‘Suborbital rocket’ means a vehicle, rocket-­propelled in whole or in part, intended for flight on a suborbital trajectory, and the thrust of which is greater than its lift for the majority of the rocket-­powered portion of its ascent.4 (20) ‘suborbital trajectory’ means the intentional flight path of a launch vehicle, reentry vehicle, or any portion thereof, whose vacuum instantaneous impact point does not leave the surface of the Earth.5

While the provided definitions differ in their specific details,6 there is an overlapping theme; there must be a vehicle that reaches an altitude, however, an orbit is not achieved due to a lack of velocity.

2 3 4 5 6

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Space Industry Act 2018, Chapter 5, Section 1(4). Ibid., Section 1(5). Title 49 U.S.C. (2004), § 70102(19). Ibid., §70102(20). See, for more information on definitions, Benjamyn I. Scott, ‘International Suborbital Passenger Transportation: An Analysis of the Current Legal Situation of Transit and Traffic Rights and its Appropriate Regulation’, 14 Issues in Aviation Law and Policy 2 (2015), at 279–281.

SUBORBITAL TRANSPORTATION AND SPACE LAW

12.2 Historical Overview Suborbital activities are often regarded as a new phenomenon. However, they pre-­date Sputnik 1, the first artificial Earth satellite, which was launched into space 1957, by several decades. For example, Robert H. Goddard launched his liquid-­ fuelled rocket on 16 March 1926.

Did You Know? Suborbital vehicles were used during World War II. The pioneering vehicle was the V-­2 developed by Wernher von Braun, which was successfully launched on 3 October 1942. Commencing in September 1944, over 3,000 V-­2s were launched by Germany against Allied targets, such as London, Antwerp and Liège.

This technology has since been developed into sophisticated modern intercontinental ballistic missiles, which are weapons that travel along a suborbital trajectory towards their intended target. Early examples of suborbital vehicles were not only weapons as, for example, in 1961, Alan Shepard performed a successful suborbital flight whereby he reached an altitude of 187 km on board the National Aeronautics and Space Administration’s (NASA) Mercury capsule. Two years later, Joseph Walker on board an X-­15 aircraft reached an altitude of 108 km with the aid of a B-­52 aircraft mothership.

Did You Know? Commercial suborbital activities gained a boost due to the help of the Ansari X-­Prize. This prize challenged private entities to successfully develop, build and operate a suborbital vehicle capable of reaching 100 km twice in two weeks. The winner would receive USD 10 million. On 4 October 2004, Burt Rutan won the prize using SpaceShipOne, which has now been taken on by Richard Branson’s Virgin Galactic.

The advent of the twenty-­first century saw the introduction of commercial interests in this once purely governmental activity. These will be the focus of this chapter.

12.3 Overview of the Industry 12.3.1 Types of Vehicles Unlike in traditional aviation, where there are specific manufacturers designing and building the aircraft, and then separate airlines operating them, it is common for suborbital companies to both build and operate the vehicles. This has resulted in numerous vehicle designs being born with varying degrees of success. Below are the five main concepts.

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12.3.2  Suborbital Vehicles Concepts Table 12.1  Suborbital vehicles Vertical rocket launch and vertical landing using rocket engines or parachutes.

Horizontal take-­off and landing using a combination of rocket propulsion and aerodynamic lift via wings.

Vertical rocket launch and horizontal landing using aerodynamic lift via wings.

Lighter than air balloons

Take-­off with mothership and horizontal landing.

While all of these vehicles have been placed under the ‘suborbital’ heading, they are all different. This is because they use different technologies, involve different participants, have different interactions with international boundaries, and operate in the air and space for different durations. The variance in vehicle is a major reason why regulation has been difficult. Without standardised vehicles, it is difficult to create a uniform set of laws for the industry.

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12.3.3 Types of Activities The activities carried out by these companies also vary significantly. Table 12.2  Suborbital activities Activity Type

Description

‘Space tourism’

The initial suborbital activity has been labelled ‘space tourism’. This activity involves taking fee-­paying members of the public to high altitudes. This experience allows the participant to experience microgravity, see the curvature of the Earth, and claim both that they have been to ‘space’ and become an ‘astronaut’.

International Suborbital Passenger Transportation

‘Space tourism’ has been held to be the precursor to international suborbital passenger transportation. This could also include the carriage of cargo, mail and passengers’ luggage. For example, a passenger service between London and Sydney that could take four-­hour has been proposed.

Cargo Delivery

Suborbital vehicles may also be utilised to deliver cargo into space. This could include a cargo delivery service to the International Space Station.

Satellite Launching

Suborbital technologies may also be used to provide low-­ cost satellite launch facilities.

Scientific Experiments

Finally, scientific experiments may also be conducted inside of the suborbital vehicle. This will significantly reduce the cost and waiting time compared with using the International Space Station.

Some activities draw parallels with traditional aviation activities, others with traditional outer space activities and some do not fit comfortably in either.

12.3.4 Types of Participants Suborbital activities intend to use both highly trained personnel, who are responsible for the operation of the vehicle and other related activities, such as navigation. There may also be other people on board, such as paying passengers. The United States national legislation, for example, creates a distinction between ‘crew member’ and ‘spaceflight participant’. A member of the ‘crew’ is: any employee of a licensee or transferee, or of a contractor or subcontractor of a licensee or transferee, who performs activities in the course of that employment directly relating to the launch, reentry, or other operation of or in a launch vehicle or reentry vehicle that carries human beings.7   7 51 US Code Sec. 50902. Definitions.

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SUBORBITAL TRANSPORTATION AND SPACE LAW On the other hand, a ‘space flight participant’ is an individual who is “not crew, carried aboard a launch vehicle or re-­entry vehicle”.8 Thus, there is a tendency to make this distinction, but the legal status of both sets of people has been a point of debate. The terms used in international aviation law, such as ‘pilot-­in-command’,9 ‘co-­pilot’,10 and ‘flight crew member’11 may be used. Also, terms used in international space law may also be used, such as ‘astronaut’12 and ‘crew members’.13 However, there is a lack of consensus on which terms apply, so it is not clear which laws attached to these terms apply. Therefore, while there may be relevant terms existing in international aviation and space law, their application and acceptance is not universal within suborbital discussions. Furthermore, there is no legal definition of the colloquial term ‘space tourist’, so a sui generis international law set of definitions has yet to develop. 

12.4 Legal Regime The United Nations (UN) Committee on the Peaceful Uses of Outer Space (COPUOS) was established by the UN General Assembly (GA) in 1959. It was: tasked with reviewing international cooperation in peaceful uses of outer space, studying space-­related activities that could be undertaken by the United Nations, encouraging space research programmes, and studying legal problems arising from the exploration of outer space.14 COPUOS was instrumental in the creation of the five outer space treaties.  •

Outer Space Treaty 1967:15 This treaty establishes the basic international law framework that is applicable to space. It contains provisions on the exploration and use of outer space, national appropriation, its relationship with international law, use of nuclear weapons, exclusivity of peaceful use, treatment of astronauts, responsibility, liability and jurisdiction. These principles are repeated in the four Conventions listed below.

•

Rescue Agreement 1968:16 Resulting from Articles V and VIII of the Outer Space Treaty 1967, the Rescue Agreement 1968 requires States to take steps to rescue, assist

 8 Ibid.   9 Annex 1 to the Chicago Convention 1944, Personnel Licencing, 11th edn (July 2011), at 1–5. 10 Ibid., at 1–2. 11 Ibid., at 1–3. 12 Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, opened for signature 27 January 1967, 610 UNTS 205, 18 UST 2410, TIAS No 6347, 6 ILM 386, entered into force 10 October 1967, Art. 5(I). 13 Code of Conduct for the International Space Station Crew, 14 CFR 1214.403, Art. I.C. (7). 14 United Nations Office for Outer Space Affairs, ‘Committee on the Peaceful Uses of Outer Space’, www.unoosa.org/oosa/en/ourwork/copuos/index.html. 15 State Parties: 105. 16 Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space, opened for signature 22 April 1968, 672 UNTS 119, 19 UST 7570, TIAS No 6599, 7 ILM 151, entered into force 3 December 1968. State Parties: 95.

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SUBORBITAL TRANSPORTATION AND SPACE LAW and return astronauts to the launching State, as well as to provide assistance to launching States, upon request, in recovering space objects and their component parts when they fall to Earth. •

Liability Convention 1972:17 Resulting from Article VII of the Outer Space Treaty 1967, this declares that the launching State has to pay compensation for personal injury and property damage resulting from its space objects when such takes place on the surface of the Earth or to an aircraft in flight. Further, it establishes a fault-­ based liability scheme for damage caused to space objects.

•

Registration Convention 1976:18 In order to facilitate the application of the Outer Space Treaty 1967, Rescue Agreement 1968 and Liability Convention 1972, the Registration Convention 1976 requires launching States to maintain a registry of the objects that they have launched into space, as well as to furnish certain information to the United Nations.

•

Moon Agreement 1979:19 The least successful Convention, in terms of ratifications, provides that the Moon, as well as other celestial bodies, can only be used for peaceful purposes, their environment20 is not to be disrupted and any exploitation of natural resources should be subject to a distribution scheme.

COPUOS was also instrumental in the creation of the five documents stating declarations and principles of outer space. •

Declaration of Legal Principles Governing the Activities of States in the Exploration and Uses of Outer Space, UN GA Resolution (RES) 1962 (XVIII) of 13 December 1963.

•

The Principles Governing the Use by States of Artificial Earth Satellites for International Direct Television Broadcasting, UN GA RES 37/92 of 10 December 1982.

•

The Principles Relating to Remote Sensing of the Earth from Outer Space, UN GA RES 41/65 of 3 December 1986.

•

The Principles Relevant to the Use of Nuclear Power Sources in Outer Space, UN GA RES 47/68 of 14 December 1992.

•

The Declaration on International Cooperation in the Exploration and Use of Outer Space for the Benefit and in the Interest of All States, Taking into Particular Account the Needs of Developing Countries, UN GA RES 51/122 of 13 December 1996.

17 Convention on International Liability for Damage Caused by Space Objects, opened for signature 29 March 1972, 961 UNTS 187, 24 UST 2389, 10 ILM 965, entered into force 1 September 1972. State Parties: 94. 18 Convention on Registration of Objects Launched into Outer Space, opened for signature 6 June 1975, 28 UST 695, 1023 UNTS 15, entered into force 15 September 1976. State Parties: 63. 19 Agreement Governing the Activities of States on the Moon and Other Celestial Bodies, opened for signature 5 December 1979, 1363 UNTS 3, entered into force 11 July 1984. State Parties: 17. 20 See, for more information on suborbital activities and the environment, Mousavi Sameh, ‘Suborbital Flights: Environmental Concerns and Regulatory Initiatives’, 81 Journal of Air Law and Commerce (2016), at 65–91.

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SUBORBITAL TRANSPORTATION AND SPACE LAW These are not treaties; however, they contain elements of treaty obligations as found in the five space treaties and other sources of international law. Further, they were adopted by the UN GA, so they have strong political value and represent a consensus among States.

Did You Know? In addition to the five treaties, there are other international conventions relevant for space. Below is a non-­exhaustive list, which includes several of the main documents:

 Treaty Banning Nuclear Weapon Tests in the Atmosphere, in Outer Space

and under Water, opened for signature 5 August 1963, 14 UST 1313; TIAS 5433; 480 UNTS 43, entered into force 10 October 1963. State Parties: 126.

 Convention Relating to the Distribution of Programme-­Carrying Signals Trans-

mitted by Satellite, opened for signature 21 May 1974, 1144 UNTS 3, entered into force 25 August 1979. State Parties: 126.

 Agreement Relating to the International Telecommunications Satellite Organization (with annexes), opened for signature 20 August 1971, 23 UST 3813 and 4091; TIAS 7532, entered into force 12 February 1973. State Parties: 150.

 Agreement on the Establishment of the INTERSPUTNIK International System and

Organization of Space Communications, opened for signature 15 November 1971, 862 UNTS 3, entered into force 12 July 1972. State Parties: 26.

 Convention for the Establishment of a European Space Agency (with annexes),

opened for signature 30 May 1975, 14 ILM 864, entered into force 30 October 1980. State Parties: 22.

 Agreement of the Arab Corporation for Space Communications (amended), opened for signature 14 April 1976, Space Law and Related Documents, U.S. Senate, 101st Congress, 2nd Session, 395 (1990), entered into force 16 July 1976. State Parties: 20.

 Agreement on Cooperation in the Exploration and Use of Outer Space for Peaceful Purposes, opened for signature 13 July 1976, 16 ILM 1, entered into force 25 March 1977. State Parties: 10.

 Convention on the International Mobile Satellite Organization (with annexes) (amended), opened for signature 3 September 1976, 31 UST 1; TIAS 9605, entered into force 16 July 1979. State Parties: 99.

 Convention Establishing the European Telecommunications Satellite Organization (amended), opened for signature 15 July 1982, UK Misc. No. 4, Cmnd. 9154 (1984), entered into force 1 September 1985. State Parties: 49.

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 Convention for the Establishment of a European Organization for the Exploita-

tion of Meteorological Satellites (amended), opened for signature 24 May 1983, entered into force 19 June 1986. State Parties: 30.

 International Telecommunication Constitution and Convention, opened for signature 22 December 1992, entered into force 1 July 1994. State Parties: 193.

 Agreement among the Government of the United States of America, Governments of Member States of the European Space Agency, the Government of Japan, and the Government of Canada on Cooperation in the Detailed Design, Development, Operation, and Utilization of the Permanently Manned Civil Space Station, opened for signature 29 September 1988, entered into force 30 January 1992. State Parties: 15.

There are two categories:

 Treaties that deal with space activities in some way.  Treaties that establish an international governmental organisation.

There are also voluntary guidelines such as the Space Debris Mitigation Guidelines of the Committee on the Peaceful Uses of Outer Space,21 which were adopted by UN GA RES 62/217 in 2008. This document sets out voluntary guidelines for the planning, design, manufacture and operational phases of spacecraft and launch vehicles with the aim of debris mitigation measures. Furthermore, there is the Safety Framework for Nuclear Power Source Applications in Outer Space,22 which reflects an international consensus on best practices to achieve nuclear safety in space. Finally, as international law does not cover every aspect of space and, in some cases, directs States to implement rules at a national level, the role of national law is extremely important. This has then produced a fragmented regulatory landscape around the world where the national law of the relevant State should be consulted. The UN Office for Outer  Space Affairs has compiled these, which can be found in its National Space Law ­Collection.23

21 UN COPUOS, ‘Space Debris Mitigation Guidelines of the Committee on the Peaceful Uses of Outer Space, Vienna 2010’, www.unoosa.org/pdf/publications/st_space_49E.pdf. 22 UN COPUOS Scientific and Technical Subcommittee and the International Atomic Energy Agency, ‘Safety Framework for Nuclear Power Source Applications in Outer Space’, A/AC.105/934 (2009), https://fas.org/nuke/space/iaea-space.pdf. 23 UN COPUOS, ‘National Space Law Collection’, www.unoosa.org/oosa/en/ourwork/spacelaw/ nationalspacelaw/index.html.

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12.5 Applicable Laws In order to determine whether aviation law, space law, a combination of the two or in fact neither of the legal regimes apply, two approaches have been advocated, namely, a functionalist and spatialist approach. However, within these two, there are numerous subcategories.

12.5.1  Spatialist Approach The spatialist approach demands a legal demarcation line to be drawn at a certain altitude. Activities taking place below the demarcation line would be subject to the sovereignty of the subjacent State so bringing them under the scope of the Convention on International Civil Aviation (Chicago Convention 1944).24 Those activities above the demarcation line would be taking place in space, which is outside the ambit of a State’s sovereignty, so bringing them within the scope of space law. Whilst this theory is in principle simplistic, there is very little agreement on where the demarcation line should be positioned.

24 Convention on International Civil Aviation, 7 December 1944, 61 Stat. 1180; 15 UNTS 295.

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SUBORBITAL TRANSPORTATION AND SPACE LAW Different theories have been presented over the years. These have been listed and simplified below.25 Table 12.3  Spatialist approaches Theory

Description

No Present Need Theory

There is no present need for the establishment of a legal demarcation line. This approach does necessitate eventual demarcation; however, this time has not yet arrived.

Cujus Est Solum Ejus Usque Ad Coelum Et Ad Inferos

Under this school of thought, it is said that sovereignty extends upwards infinitely.

Effective-­Control Theory

The subjacent State’s sovereignty extends as far out as it can exercise effective control.

National Security Theory

A State’s sovereignty extends to an altitude whereby State security or human welfare is affected.

Aerodynamic Lift Theory

A State’s sovereignty ends where aerodynamic lift is no longer cable of supporting an aircraft.

Atmospheric Considerations

A demarcation line is set based on a layer of the atmosphere. The upper limits of each layer are circa: •  Troposphere: 14.5 km •  Stratosphere: 50 km •  Mesosphere: 85 km •  Thermosphere: 600 km •  Ionosphere: 48 km–965 km (overlaps with meso- and thermosphere) •  Exosphere: 10,000 km

Bogotá Declaration

The Bogotá Declaration is an attempt by equatorial States to claim sovereignty over the geostationary orbit.

Compromise Theory

This proposes more than one demarcation line, such as: •  (a) Lower demarcation line for territorial airspace, which will be subject to the complete and exclusive sovereignty of the subjacent State. •  (b) Buffer Zone, which should be recognised as an area of innocent passage for all States. •  (c) Outer space demarcation line, which should mark the beginning of Outer Space.

25 See, for a detailed account of these theories, Gbenga Oduntan, Sovereignty and Jurisdiction in the Airspace and Outer Space: Legal Criteria for Spatial Delimitation (Routledge, 2012). See also, Robert Goedhart, The Never Ending Dispute: Delimitation of Air Space and Outer Space, Vol. 4 (1996).

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SUBORBITAL TRANSPORTATION AND SPACE LAW The airspace comprises the area above the State, the territorial waters of the State, and other areas including the high seas.26 Article 1 of the Chicago Convention 1944 recognises the customary international law principle of State sovereignty over its airspace. The contracting States recognise that every State has complete and exclusive sovereignty over the airspace above its territory. This provides some clarity to the scope of the term ‘airspace’. First, the subjacent State has sovereignty over the airspace, so non-­sovereign areas above its territory, notably outer space, are not part of the airspace. Second, the airspace is divided into different classifications with defined dimensions specified in national law.27 Class A airspace is the highest airspace which, for example, in the United States extends from 18,000 feet (c.5,500 m) mean sea level to flight level 600 which is c.60,000 feet (c.18,000 m) mean sea level. As a result, the airspace can be interpreted in law as going at least to the highest point of controlled airspace.

Did You Know? Some States have included in their national space laws a precise geographical delimitation between airspace and outer space, that is at 100 km above sea level. These include Australia,28 Kazakhstan29 and Denmark.30 Accordingly, their domestic legislation applies to space activities that take place from the altitude of 100 km upwards.

The corpus of space treaties makes numerous references to ‘launched’, ‘launching’ and ‘orbit’. Thus, an orbiting satellite is de jure situated in space. Therefore, the Space Treaties provide a partial indication as to where space is, where the demarcation line cannot be placed above the minimum height of orbit as this would conflict with internationally accepted international law.

12.5.2  Functionalist Approach The alternative method of determining the applicable laws is called the functionalist approach. This approach differs greatly from the spatialist approach as it asserts that: States should not worry as to the fixing of a demarcation boundary plane but rather should concentrate on the regulation of activities in space, regardless of the location of these activities.31 26 See, Section 3.2.1.4. 27 Annex 11 to the Chicago Convention 1944, Air Traffic Services, 13th edn (July 2001), at 2.4. 28 Australian Space Activities Act (1998), Part 2, Definitions. 29 Law of the Republic of Kazakhstan on Space Activities (2012), Chapter I – General Provisions. 30 Danish Outer Space Activities Act (2016), Chapter 2(4) – Definitions. 31 Oduntan, Sovereignty and Jurisdiction in the Airspace and Outer Space: Legal Criteria for Spatial Delimitation (2012), at 293.

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SUBORBITAL TRANSPORTATION AND SPACE LAW Thus, the determining requirements are “the technological properties, functional characteristics, design and aerodynamics of the vehicle”32 when determining whether air or space law applies. Two core branches of this approach have emerged, whereby focus is placed on the vehicle or on the activity.

12.5.2.1 Vehicle Characteristics of the vehicle may be used to determine which legal regime is applicable. In 1967, ICAO provided a revised definition of the term ‘aircraft’ in Annex 7 to the Chicago Convention 1944.33 Any machine that can derive support in the atmosphere from the reactions of the air other than the reactions of the air against the earth’s surface.34 This includes both ‘heavier-­than-air aircraft’ and ‘lighter-­than-air aircraft’. The ‘heavier-­ than-air aircraft’ includes ‘aeroplane’,35 ‘rotorcraft’ and ‘ornithopter’. If the vehicle achieves lift from its fixed wings, then it shall be classified as an ‘aircraft’ for the purpose of the Chicago Convention 1944. As the definition of ‘aircraft’ states that a vehicle is an aircraft if it is capable of deriving support, rather than constantly deriving support,36 this means that if the vehicle, even for a moment, satisfies the definition of an aircraft, then it does not cease being an aircraft just because it temporarily stops achieving lift through a reaction with the air. The legal definition of the term ‘space object’ is provided in Article I(d) Liability Convention 1972 and Article I(b) of the Registration Convention 1976. The term ‘space object’ includes component parts of a space object as well as its launch vehicle and parts thereof. The term ‘space object’ was first used in UN GA RES 1721 (XVI) of 1961 on “International co-­operation in the peaceful uses of outer space” to describe any object launched by States into outer space.

32 Ram Jakhu, Tommaso Sgobba and Paul S. Dempsey, The Need for an Integrated Regulatory Regime for Aviation and Space: ICAO for Space? (Springer Science & Business Media, 2011), at 58. 33 See, Peter P. Fitzgerald, ‘Inner Space: ICAO’s New Frontier’, 79 Journal of Air Law and Commerce (2014), at 3–34. 34 Annex 7 to the Chicago Convention 1944, Aircraft Nationality and Registration Marks, 6th edn (July 2012), at 1. 35 Aeroplane means a “power-driven heavier-than-air aircraft, deriving its lift in flight chiefly from aerodynamic reactions on surfaces which remain fixed under given conditions of flight.” Annex 7 to the Chicago Convention 1944, at 1. 36 Benjamyn I. Scott, ‘The Regulation of Personal Injuries in International Carriage by Suborbital Vehicles Under Air Law’, 13 Aviation and Space Journal 2 (2014), at 23.

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Did You Know? The term has been mentioned and/or defined by several states in national laws. For example:

 Australia: “  ‘space object’ means a thing consisting of:

(a) a launch vehicle; and



(b) a payload (if any) that the launch vehicle is to carry into or back from an area beyond the distance of 100 km above mean sea level; or any part of such a thing, even if:



(c) the part is to go only some of the way towards or back from an area beyond the distance of 100 km above mean sea level; or



(d) the part results from the separation of a payload or payloads from a launch vehicle after launch.”37

 Austria: Austrian Federal Law on the Authorisation of Space Activities and the Establishment of a National Registry 2011, Section 2(2).

“  ‘Space object’: an object launched or intended to be launched into outer space, including its components.”38

 Belgium: “  ‘space object’ means,

(a) any object launched or intended to be launched, on an orbital trajectory around the Earth or to a destination beyond the earth orbit;



(b) any device whose purpose is to launch an object on a trajectory as mentioned under (a), even when such a device is operated without payload for the sole purpose of its development and validation phase;



(c) any constitutive element of an object as mentioned under (a) of (b).”39

37 Australian Space Activities Act 1998, No. 123, Section 8. 38 Austrian Federal Law on the Authorisation of Space Activities and the Establishment of a National Registry 2011, Section 2(2). 39 Belgium Law on the Activities of Launching, Flight Operations or Guidance of Space Objects 2005, Art. III.

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 Republic of Korea: “The term ‘space object’ means an object designed and manufactured for use in outer space, including a launch vehicle, a satellite, a space ship and their components”.40

 United States: “  ‘launch vehicles’ means –

(a) a vehicle built to operate in, or place a payload or human beings in, outer space; and



(b) a suborbital rocket.”41

The interpretation of ‘space object’ determines which objects are to be registered under the Registration Convention 1976 and which objects may incur the liability of the launching State for damages to persons or property in outer space42 or in airspace and on the surface of the Earth.43 Furthermore, it is indicative for the exercise of jurisdiction in outer space under Article VIII of the Outer Space Treaty 1967, as the registering State shall retain jurisdiction and control over the object, which means that space objects are the ‘link’ for exercising jurisdiction in the sovereignty-­free domain of outer space. The main feature of this circumscription is that it is circular and very general: It can include any object launched or attempted to be launched44 onto a rocket into orbit (e.g. satellites, space probes, modules of space stations or payload). This branch of the functionalist approach examines the vehicle and then concludes on the applicable law depending whether it is a space object or an aircraft. However, whereas ‘aircraft’ is defined in the Chicago Convention 1944, ‘space object’ lacks a clear definition. It, therefore, cannot be simply assumed that what is not an aircraft is a space object. This point is exacerbated by the fact that there is no definition of ‘suborbital vehicle’. Therefore, suborbital activities highlight a fundamental flaw with this approach and as such activities do not fit comfortably under either ‘aircraft’ or ‘space object’.

12.5.2.2 Activity A second way in which the functionalist approach can be used is by focusing on the specific activity of the vehicle. It seems common sense that an activity involving the exploration of the Moon is a space activity and therefore space law should logically apply. A business trip from London to New York by a commercial airline also represents a standard aviation 40 Space Development Promotion Act 2005, Art. 2(c). 41 51 US Code. §50902(11). 42 Liability Convention 1972, Art. III. 43 Ibid., Art. II. 44 Ibid., Art. I(b).

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SUBORBITAL TRANSPORTATION AND SPACE LAW activity, so it again appears logical that air law should govern this activity. However, there is a lack of legal definition regarding what is a space and air activity, so it cannot always be know which legal regime will govern in more ambiguous situations. This is realized within the context of suborbital activities as they do not directly reflect traditional air or space activities, as well as because not all suborbital activities are the same.

Recommended Literature Introduction to Space Law:

Frans von der Dunk and Fabio Tronchetti (eds), Handbook of Space Law (Edward Elgar Publishing, 2015). Peter Haanappel, The Law and Policy of Air Space and of Outer Space, A Comparative Approach (Kluwer Law International, 2003). Stephan Hobe, Bernhard Schmidt-­Tedd and Kai-­Uwe Schrogl (eds), Cologne Commentary on Space Law: Volumes 1, 2 and 3 (Carl Heymanns Verlag, 2009, 2013 and 2015). Ram Jakhu and Paul S. Dempsey (eds), Routledge Handbook of Space Law (Routledge, 2016). Francis Lyall and Paul Larsen, Space Law (Routledge, 2016). Tanja Masson-­Zwaan and Mahulena Hofmann, An Introduction to Space Law, 4th edn (Kluwer Law International, 2019).

Suborbital and Commercial Space Activities:

Ruwantissa Abeyratne, Regulation of Commercial Space Transport: The Astrocizing of ICAO (Springer, 2015). Paul S. Dempsey and Maria Manoli, ‘Space: Functionalism, Spatialism and State Sovereignty’, OOSA/2017/19, 12 September 2017. Robert Goedhart, The Never Ending Dispute: Delimitation of Air Space and Outer Space, Vol. 4 (Editions Frontieres, 1996). Gbenga Oduntan, Sovereignty and Jurisdiction in Airspace and Outer Space: Legal Criteria for Spatial Delimitation (Routledge, 2011). Benjamyn I. Scott, ‘The Regulation of Personal Injuries in International Carriage by Suborbital Vehicles Under Air Law’, 13 Aviation and Space Journal 2 (2014), 20–32. Benjamyn I. Scott, ‘International Suborbital Passenger Transportation: An Analysis of the Current Legal Situation of Transit and Traffic Rights and its Appropriate Regulation’, 14 Issues in Aviation Law and Policy 2 (2015), 277–311.

Points for Further Research

290

•

Should there be a lex specialis regime for suborbital vehicles?

•

Is there a need for a demarcation line?

•

Is the functionalist approach suitable?

•

How does each approach deal with sovereignty and jurisdiction?

•

What liability regime is a suborbital operator subject to?

Annex I List of Main International Aviation Law Treaties

I.I  Public Aviation Law Title of Treaty

Short Title

Date of adoption

Entry Into Force

Convention on International Civil Aviation

Chicago Convention (1944)

7 December 1944

4 April 1947

International Air Services Transit Agreement

Transit Agreement (1944)

7 December 1944

30 January 1945

International Air Transport Agreement

Transport Agreement (1944)

7 December 1944

8 February 1945

Protocol Relating to an Amendment to the Convention on International Civil Aviation [Article 93 bis]

Article 93 bis (1947)

27 May 1947

20 March 1961

Protocol Relating to an Amendment to the Convention on International Civil Aviation [Article 83 bis]

Article 83 bis (1980)

6 October 1980

20 June 1997

Protocol Relating to an Amendment to the Convention on International Civil Aviation [Article 3 bis]

Article 3 bis (1984)

10 May 1984

1 October 1998

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ANNEX I

I.II  Contractual Liability Title of Treaty

Short Title

Date of adoption

Entry Into Force

Convention for the Unification of Certain Rules Relating to International Carriage by Air

Warsaw Convention (1929)

12 October 1929

13 February 1933

Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929

The Hague Protocol (1955)

28 September 1955

1 January 1963

Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other than the Contracting Carrier

Guadalajara Convention (1961)

18 September 1961

1 May 1964

Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929 as Amended by the Protocol done at The Hague on 28 September 1955

Guatemala City Protocol (1971)

8 March 1971

not in force

Additional Protocol No. 1 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929

Additional Protocol No. 1 (1975)

25 September 1975

15 February 1996

Additional Protocol No. 2 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929 as Amended by the Protocol done at The Hague on 28 September 1955

Additional Protocol No. 2 (1975)

25 September 1975

15 February 1996

Additional Protocol No. 3 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929 as Amended by the Protocols done at The Hague on 28 September 1955 and at Guatemala City on 8 March 1971

Additional Protocol No. 3 (1975)

25 September 1975

not in force

Montreal Protocol No. 4 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw on 12 October 1929 as Amended by the Protocol done at The Hague on 28 September 1955

Montreal Protocol No. 4 (1975)

25 September 1975

14 June 1998

Convention for the Unification of Certain Rules for International Carriage by Air

Montreal Convention (1999)

28 May 1999

4 November 2003

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ANNEX I

I.III Third-­Party Liability Title of Treaty

Short Title

Date of adoption

Entry Into Force

Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface

Rome Convention (1952)

7 October 1952

4 February 1958

Protocol to Amend the Convention on Montreal Protocol (1978) Damage Caused by Foreign Aircraft to Third Parties on the Surface

23 September 1978

25 July 2002

Convention on Compensation for Damage Caused by Aircraft to Third Parties

General Risks Convention (2009)

2 May 2009

not in force

Convention on Compensation for Damage to Third Parties, Resulting from Acts of Unlawful Interference Involving Aircraft

Unlawful Interference Compensation Convention (2009)

2 May 2009

not in force

Title of Treaty

Short Title

Date of adoption

Entry Into Force

Convention on Offences and Certain Other Acts Committed on Board Aircraft

Tokyo Convention (1963)

14 September 1963

4 December 1969

Convention for the Suppression of Unlawful Seizure of Aircraft

Hague Convention (1970) or 16 December 1970 Hijacking Convention

14 October 1971

Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation

Montreal Convention (1971) or Sabotage Convention

23 September 1971

26 January 1973

24 February 1988

6 August 1989

I.IV Criminal Law

Protocol for the Suppression of Unlawful Montreal Protocol (1988) Acts of Violence at Airports Serving International Civil Aviation, Supplementary to the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation done at Montreal on 23 September 1971

Convention on the Marking of Plastic Marking of Plastic Explosives 1 March 1991 Explosives for the Purpose of Detection Convention (1991)

21 June 1998

Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation

Beijing Convention (2010)

10 September 2010

1 July 2018

Protocol Supplementary to the Convention for the Suppression of Unlawful Seizure of Aircraft

Beijing Protocol (2010)

10 September 2010

1 January 2018

293

ANNEX I Title of Treaty

Short Title

Date of adoption

Entry Into Force

Protocol to Amend the Convention on Offences and Certain Other Acts Committed on Board Aircraft

Montreal Protocol (2014)

4 April 2014

not in force

Title of Treaty

Short Title

Date of adoption

Entry Into Force

Convention on the International Recognition of Rights in Aircraft

Geneva Convention (1948)

19 June 1948

17 September 1953

Convention on International Interests in Cape Town Convention on Mobile Equipment Mobile Equipment (2001)

16 November 2001

1 March 2006

Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment

16 November 2001

1 March 2006

I.V Rights in Aircraft

294

Cape Town Protocol on Aircraft Equipment (2001)

Index

Additional Protocol No. 1–4, 1975 157 Air Defense Identification Zone (ADIZ) 35 airline cooperation: airline alliance 115–117, 185, 231, 235–237, 246–248; code-sharing 112–115; interlining 112–113; metal neutral jointventure 116; merger 22, 116–117, 227, 231, 242–245, 249–250 Airports Council International (ACI) 62, 69 air service agreements: designation 111–112; effective control 103, 106, 108–110; licensing 110; open skies 102, 140–106, 112, 117, 244, 247–248, 266–267, 270; substantial ownership 103, 106, 108–109 air space management: Bernstein of Leigh (Baron) v. Skyviews & General Ltd 18; bilateralism 99; Bury v. Pope (1587) 18; cabotage 33–34, 87–89, 97–99; charter flight 85–86, 164; community air carrier 88; freedoms of the air 93–98, 105–106; non-scheduled international air service 84–86; Notice to Airmen (NOTAM) 92; no-fly zone 93, 219; prohibited area 91–92; scheduled international air service 84–86; sovereignty 9, 21, 27, 33–35, 83–84, 86, 284–286 Annexes to the Chicago Convention 1944/ Standards and Recommended Practices (SARPs) 71–73, 75–78 Association of Southeast Nations (ASEAN) 105 aviation crashes 9/11, 92, 123, 130–131, 147, 198, 205, 221; Air France Concorde 197; Air India Flight 182, 126; Austrian Airlines 125; El-Al Flight 1862 197; Ethiopian Airlines Crash ET 302, 198; Germanwings 9525 6, 131; Iran Air IR 655, 127; Korean Air Lines 007, 44–45; Libyan Arab Airlines Flight 114, 44; Malaysia Airlines MH17, 44, 125, 197; Pan Am Flight

103 Lockerbie 126; Saudia Flight 763, 208; Swissair flight SR330, 124; Tampa Airplane Crash 131; Tenerife Crash 208; Überlingen 209 Beijing Convention 2010 121, 130–133, 149–150 Beijing Protocol 2010 121, 131, 133–134, 149 Bermuda I & II Agreements 1946–1977 99–101 Bonn Declaration on International Terrorism 1978 120 Brussels Protocol 1938 198–199 Charter of the United Nations 1945 42–43, 45–46, 58–59, 93, 132 Chicago Convention 1944: amendments 50–51; civil v. State aircraft 24, 33, 38–42, 138, 221; definitions 33, 36; dispute settlement 50–56; misuse of civil aviation 43; preamble 43; shooting down of civil aircraft 44–46, 50; sovereignty 9–10, 27, 33, 284; territory 34–35; transfer of responsibilities 49–50; war and emergency conditions 42–43 Civil Air Navigation Services Organisation 62 classifications of aircraft: definition of ‘aircraft’ 36–38, 287; supersonic aircraft 259, 272; suborbital 277–278; unmanned aircraft (drones, rpas, pilotless aircraft) 25, 38, 46, 60, 89–91, 99, 259 competition: Alitalia Case 241; antitrust immunity 246–248; British Airways/American Airlines Case 248; cartel 228, 237, 245; dominant position (abuse of) 228, 234–237, 243; European Union Merger Regulation 241–243; fair competition 250–252; Federal Trade Commission 245, 249; General Electric/ Avio (Aviation Manufacturing Industry)

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INDEX competition continued 250; KLM/Northwest 116–117, 248; market economy investor principle 240; monopoly 228–229, 246; price-fixing 228, 245–246; prohibited (anticompetitive) agreements 231–233, 236–237; Ryanair/Charleroi Case 241; State aid 239–241 Convention on Cybercrime 2001 119 contractual liability: accident 169; air waybill 166; cargo 157, 166–167; death and bodily injury 171; denied boarding and cancellation 189; delay 177–178, 189; documentation 164–166; embarkation and disembarkation 172; exclusivity 181–183; extraordinary circumstance 192; jurisdiction 183–187; international carriage 160–162; liability limits 174–176; Special Drawing Rights (SDR) 174–175; successive carriage 163 Cooperative Development of Operational Safety and Continuing Airworthiness Programme (COSCAP) 79–80 Court of Justice of the European Union 13–14 criminal law: dispute settlement 148–149; extradition 119, 143, 150; in flight/in service 137–138; in-flight security officer 147–148; jurisdiction 140–142; obligations 142–144; offences 120–136; political, racial or religious acts 136–137; powers of the aircraft commander 144–147; Ryanair v. Brian Lake 127; United States v. Causby 238 US 256 (1946) (United States) 18; United States v. Cordova 119 due regard 41, 91 environment: aircraft noise 258–259, 262, 271–273; Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) 61, 256, 263–265, 270; Common But Differentiated Responsibilities 263; emissions 5, 256–258, 264–266; greenhouse gases (GHG) 5, 254–263, 267–268; Kyoto Protocol 1997 261–262, 269–270; market-based measure 256, 264, 270; sustainability 259; Union Emissions Trading Scheme (EU ETS) 258, 266–270; United Nations Framework Convention on Climate Change 1992 (UNFCCC) 258, 261, 263 EUROCONTROL 40, 62 European Aviation Safety Agency (EASA) 79, 81 European Civil Aviation Conference (ECAC) 80–81

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European Common Aviation Area (ECAA) 105 European Convention on the Suppression of Terrorism 1977 120 Flag of Convenience 49 General Agreement on Tariffs and Trade 1994 (GATT) 230 General Agreement on Trade in Services 1993 (GATS) 230 General Risks Convention 2009 205–208, 220 Guadalajara Convention 1961 156, 163 Guatemala City Protocol 1971 156–157, 174, 176, 181, 186 Havana Convention 1928 26–28 industry standards 15 insurance: compulsory insurance 219–223; definition 212–214; exclusions 223–225; general principles 216–217; Insurance Co v. Inland Revenue Commissioners 213; Lloyd’s London 211; process 217–219; types of insurance 223–225 International Air Services Transit Agreement 1944 53, 101 International Air Transport Agreement 1944 53, 101 International Air Transport Association (IATA) 28, 62, 69, 99, 114, 134, 159, 167, 180, 185, 191 International Air Transport Association Intercarrier Agreement 1995 159 International Civil Aviation Organization (ICAO): aims and objectives 59–61; Air Navigation Commission 69–71; assembly 67–69; auditing 78; council 64–67; documents 73–74; Interim Agreement on International Civil Aviation 32, 57; International Civil Aviation Conference 31; President of the Council 65; Provisional International Civil Aviation Organization (PICAO) 57; Qatar Disputes 52–53; regional offices 79–81; Secretariat 63–64; Secretary General 63–64 International Commission for Air Navigation (ICAN) 24, 26 International Coordinating Council of Aerospace Industries Associations 62 International Federation of Air Line Pilots’ Associations 62 International Federation of Air Traffic Controllers’ Associations 62

INDEX International Telecommunications Union (ITU) 61 leasing (dry lease and wet lease) 142 Liability Convention 1972 281, 287 Madrid Convention 1926 25–26, 28 Marking of Plastic Explosives Convention 1991 126 Montgolfier brothers (Joseph-Michel and Jacques-Étienne) 18 Montreal Convention 1999 154, 156–157, 159–187, 189, 191–192, 201–203, 220–224 Montreal Convention or Sabotage Convention 1971 121, 124–128 Montreal Protocol 1978 198, 204–205, 220 Montreal Protocol 1988 128–130, 132 Montreal Protocol 2014 134–137, 146–149, 151 Moon Agreement 1979 281 Multilateral Agreement on the Liberalization of International Air Transportation (MALIAT) 106 Outer Space Treaty 1967 280–281 Pacific Aviation Safety Office (PASO) 79 Paris Convention 1919 9, 20–28, 91 Paris International Air Navigation Conference 1910 20 Registration Convention 1976 281, 287, 289 Rescue Agreement 1968 280–281 Rome Convention 1933 29, 198–199, 203 Rome Convention 1952 137, 198–204, 209, 220, 272 Shanghai International Aviation Court of Arbitration 10

soft law 14–15 sources of international law 6–11 suborbital and space: functionalist approach 284, 286–289; space object 287–289; spatialist approach 284–285; suborbital activities 279; suborbital participants 279–280 The Hague Convention or Hijacking Convention 1970 120, 123–124 The Hague Conventions of 1899 and 1907 19 The Hague Protocol 1955 155–157, 176, 181 third-party liability: strict liability 199; midair collision 208–209; operator (of aircraft) 201–202 Tokyo Convention 1963 46, 120–124, 135–139, 144–150 Treaty of Versailles 1919 22–23 Treaty on the Functioning of the European Union (TFEU) 11–13, 231–239, 243, 245, 247 United Nations Committee on the Peaceful Uses of Outer Space (COPUOS) 280–281 United States and International Air Transport Association Montreal Agreement 1966 158–159 Unlawful Interference Compensation Convention 2009 205–209, 220 Vienna Convention on the law of Treaties 1969 6–8, 10, 52, 77 Warsaw Convention 1929 154–159, 162–165, 167–172, 174–176, 180, 182 Wernher von Braun 277 Wright brothers (Orville and Wilbur) 19 World Trade Organization 230 World War I 22, 25, 212 World War II 28, 31, 107, 155, 230, 277

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