Regulation 261: Supreme Court rejects appeal in Gahan v Emirates
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In October 2017 we reported on the Court of Appeal's treatment of some of the confusing issues that can arise in the context of "connecting flights" under Regulation 261 (see here).
In March 2018 the Supreme Court rejected Emirates' application for leave to appeal that decision. As a result, where a flight departing from the EU is delayed and results in a missed connection from a non-EU airport, remedies will be available under Regulation 2611 by reference to actual time of arrival at the final destination. This is true where the carrier involved is not an EU carrier and where the second sector is wholly outside the EU. Since detailed reasons are not given where leave to appeal is denied, we cannot report any further on their Lordships' rationale, other than they were satisfied that Emirates' challenge did not raise an arguable point of law, as the point has already been adequately clarified by the European Court of Justice (ECJ). The UK CAA has reiterated its recommendation that carriers participate in ADR schemes to minimise litigation of this nature.
On a related note, three recent ECJ cases, which were heard together and in which judgment was issued on 7 March 20182, offer some helpful insight into how the rules of jurisdiction under the Brussels Regulation3 operate in respect of Regulation 261 claims involving connecting flights. Most significantly the judgment confirms that an airline can be sued in an EU country other than the one in which it operates.
Two of the cases were against Air Nostrum. Although none of the passengers had a contract with Air Nostrum, it was Air Nostrum's delay on the first sector that led to a missed connection. In these instances both the first and second sector carriers were EU domiciled and all the flights took place within the EU. In the third case, Hainan Airlines, a non-EU carrier, was the contracting carrier for carriage from Berlin to Beijing via Brussels. The passenger was denied boarding for the second sector, to be performed by Hainan Airlines, at the time of intended departure from Brussels.
The threshold question which the ECJ addressed in the Air Nostrum cases was the application of the provisions on special jurisdiction in relation to contracts under the original Brussels Regulation. Article 5(1) applies to "matters relating to a contract", but none of the passengers had a contract with the defendant Air Nostrum. The court concluded that it was not necessary for there to be a contract between a passenger and the airline for the airline to be subject to the special jurisdiction in contractual matters: Air Nostrum was discharging the obligations of the contracting carrier.
In both of the Air Nostrum cases, the passengers sued the operating carrier for the first leg, which was where the delay had taken place. However the cases were brought before the courts of arrival on the second leg, which was to be performed by the contracting carrier.
The ECJ concluded that the place of performance – which is central to jurisdiction in contractual matters under the Brussels Regulation – included the place of arrival of the second leg. In doing so the court relied on its earlier conclusion in Rehder4, in which the ECJ concluded that the places of both arrival and departure on a single sector flight amount to the place of performance. The ECJ confirmed that this remained true even though the flight in question involved two sectors, via an intermediate stopping point, operated by two different carriers. Although the carrier on the first leg did not have a contract with the passenger, and did not operate to the destination of the second sector, it was subject to jurisdiction at the point of ultimate destination and not, it would appear, before the courts at the destination of the first sector.
The point of appeal in the Hainan case was whether the German courts had jurisdiction over Hainan Airlines. This involved the interaction of article 5(1) of the Brussels Regulation, which confers jurisdiction against an EU company by reference to the place of performance, and article 4(1), which addresses jurisdiction against non-EU companies. The lower courts in Germany dismissed the case for lack of jurisdiction, concluding that the action should have been brought in Belgium – seemingly on the basis of place of performance, i.e. an article 5(1) criterion. The German Federal Court of Justice referred the question of the place of performance under the contract of carriage to the ECJ. Since Hainan Airlines was not domiciled in an EU Member State, the ECJ concluded that article 4(1) of the Brussels Regulation applied, under which the jurisdiction of the courts of each Member State over non-EU companies is determined by the law of that Member State. Article 5(1) did not apply to a non-EU airline.
Consequently the question was referred back to the German courts without deciding on jurisdiction. Interestingly, had the defendant airline been EU-domiciled, the ECJ should, on the reasoning applied in the Air Nostrum cases, have confirmed that either the German or the Chinese courts have jurisdiction, but not those in Belgium where the denial of boarding took place.
The permutations of connecting flights by EU and non-EU carriers both within and outside Europe are numerous. No doubt there are other variations which have yet to be addressed, but the tendency of the courts appears to be to bring matters within the scope of Regulation 261 and to extend the jurisdiction of courts over airlines even in countries in which the airline in question does not operate.
1 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 (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004R0261:en:HTML)
2 Judgment of the Court (Third Chamber) of 7 March 2018 in flightright GmbH v Air Nostrum, Líneas Aéreas del Mediterráneo SA, Roland Becker v Hainan Airlines Co. Ltd and Mohamed Barkan and Others v Air Nostrum, Líneas Aéreas del Mediterráneo SA, Joined Cases C-274/16, C-447/16 and C-448/16 (http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d2dc30ddaff4c23426f44a36811cfe51504a1cfc.e34KaxiLc3qMb40Rch0SaxyNbxb0?text=&docid=200011&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=402280)
3 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32001R0044&from=EN); now superseded by the Recast Brussels Regulation (EU) No 1215/2012 (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32012R1215&from=EN (under which similar considerations apply)
4 Judgment of the Court (Fourth Chamber) of 9 July 2009, Peter Rehder v Air Baltic Corporation, Case C-204/08 (http://curia.europa.eu/juris/document/document.jsf?text=&docid=76299&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=403153)
