and if the charges are
not paid within 56 days of the date when the detention begins, the CAA may,
subject to various regulations, sell the aircraft on behalf of Eurocontrol in
order to satisfy the charges.
Click here to view article in full.
Practical issues for lessors:
(a) lessor's aircraft may
not have unpaid charges, but may be detained if the operator does on another
aircraft;
(b) lessors have no
contract with the operator in respect of other aircraft it operates, or the
owners of such aircraft;
(c) lessors may not know
whether there are any unpaid charges, and typically, there is no forewarning of
detention;
(d) the charges may
exceed the value of lessor's aircraft;
(e) only the UK CAA has
the fleet lien detention power; lessor's aircraft might be targeted if it flies
into the UK and the aircraft to which the default relates does not.
Previous challenges to the fleet lien
There were a number of
challenges to the use of fleet liens before enactment of the Human Rights Act.
These have included claims under tort of conversion, claims for negligence of
common law, and claims under EU competition law for abuse of a dominant
position. All the claims have failed.
Global Knafaim: the facts
The Claimants, Global
Knafaim Leasing Limited and CGTSN Limited (together "Global") were owners and
lessors of aircraft. One such aircraft was leased to a Canadian operator, Zoom
Inc ("Zoom"). During the term of the lease Zoom ran into financial difficulties
and was forced to seek insolvency protection in Canada (and subsequently went
into insolvent liquidation).
On 28 August 2008 the
aircraft leased by Global to Zoom was detained at Glasgow Airport following
Zoom's failure to pay airport charges due to BAA and route charges due to
Eurocontrol. In order to free the aircraft, Global were forced to pay not just
the unpaid fees in relation to their own aircraft, but also in relation to other
aircraft in Zoom's fleet in which Global had no interest at all.
Global contended that
this use of the fleet lien, beyond the aircraft which they had leased to Zoom,
was unlawful, and contravened Article 1 of the First Protocol to the European
Convention on Human Rights ("the ECHR").
Click here to view article in full.
Finally, Global claimed
that BAA had breached EU competition law in detaining the aircraft, namely by
abuse of a dominant position under Article 102 of the Consolidated Treaty of the
European Union and the Treaty on the Functioning of the European Union dated
March 2010.
The Decision
Dismissing Global's
claim, Collins J in the High Court held:
-
Despite the fact that no other
European aviation authority permits the use of fleet liens, there is nothing
in any international or European convention or instrument which disapproves
let alone renders unlawful the fleet liens power granted by UK legislation.
Thus, the power was lawful.
-
Once it is accepted that the
power is lawfully there, the exercise of it will be equally lawful unless in
a given set of circumstances, its exercise would be unfair and
disproportionate.
-
The exercise of the power in
this case did not contravene the ECHR.
Click here to view article in full.
No Abuse of a Dominant Position by BAA
Finally, as to Global's
claim against BAA for abuse of a dominant position, Collins J also dismissed
Global's arguments, holding that there was no evidence before him which
established that "the exercise of the fleet lien power has even potentially
influenced the structure of the market, or weakened the degree of competition or
hindered the maintenance or growth of competition in the market".
Click here to view article in full.
Ones to Watch
Heathrow Third Runway
The current UK Government
cancelled the third runway immediately it took office and the Labour Party has
very recently announced that it is now opposed to the project which it supported
when in power. However, the arguments in its favour, primarily the need
for more airport capacity in the South East and to retain Heathrow's hub's
status, remain. The British Airports Authority and business generally are
strongly in favour of it and there has been little enthusiasm for the "Heathwick"
solution involving a train link between Heathrow and Gatwick. Will the
Government bow to the pressure and reverse its decision? It is perhaps
more likely that it will continue to duck the issue on the basis that it will be
addressed in its Review of Aviation Policy (due to be concluded in 2013).
Airline Passenger Duty
The UK Government has
concluded its consultation into its proposals to increase the rate of APD with
effect from 1 April 2012 and to extend it to business jets and is due to
announce the results on 29 November. While prominent members of the
aviation industry such as Willie Walsh of the International Airlines Group and
ABTA have strongly criticised the tax itself and the proposed increase, it
remains to be seen whether this has had any effect.
EU
Emissions Trading System
The aviation industry
will become subject to the EU emissions trading system with effect from 1
January 2012 and EU operators have been allocated their free allowances for the
year. The challenge mounted to ETS by some US airlines has been rejected
in the interim opinion of the European Court of Justice's Advocate General.
However, high level opposition to the inclusion of non-EU carriers in the system
is mounting with the ICAO publically denouncing it and the US House of
Representatives passing a law prohibiting US carriers from participating in it.
Will the EU crack?
Click here to see the entire bulletin.
Contact Us