IATA Aviation Liability Reporter 2018
Analysis of legal developments in the international airline industry during 2017
On 21 August 2017 the Montreal Convention for the Unification of Certain Rules for International Carriage by Air dated 28 May 1999 (the "Montreal Convention") came into legal force for the Russian Federation. The Montreal Convention, however, does not apply to (a) internal air carriage performed by Russia for non-commercial purposes in connection with the exercise of its functions and duties as a sovereign state, and (b) carriage of persons, cargo and baggage carried out for the military authorities on aircraft registered in or leased by Russia that are fully reserved by, or on behalf of, these authorities.

The Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air dated 12 October 1929 as amended by Hague Protocol 1955 (the "Warsaw Convention") still applies to relations in the sphere of international air carriages performed from or to the Russian Federation to or from a country which is not a member of Montreal Convention.

In March 2017, [1] the Russian Parliament (State Duma) introduced criminal penalties for in-flight brawlers disrespecting passengers on board an aircraft. Under the Article 213(1)(b) of the Russian Criminal Code, "hooliganism" on board an aircraft may result in a fine, compulsory community service of up to 480 hours, compulsory labor for up to five years, or even imprisonment for the same period. The same crime performed by a group of persons with previous convictions may result in imprisonment for up to seven years, and if the aforementioned disorderly conduct was accompanied by the use of explosive substances or explosive devices, the sentence may result in up to eight years' imprisonment.

In May 2017, the first criminal investigation under Article 213(l)(b) was launched against a passenger travelling from Tel Aviv to Moscow. The passenger got drunk and insulted other passengers and crew members and attempted to open the plug door. The passenger was detained by the police in the destination airport and was later arrested. The passenger was sentenced to six months of imprisonment.

On 5 December 2017, the Federal law N 376-03 "On Amendments to the Russian Air Code" was signed. The law, which takes effect on 4 June 2018, permits air carriers to blacklist passengers who have been held liable for an administrative or criminal offense on board an aircraft by the competent authorities. Thus, an air carrier will be entitled to refuse, with limited exceptions, to enter into an air carriage agreement with a passenger blacklisted in the register of persons whose air carriage is limited. However, passengers must be removed from airline blacklists one year after their corresponding offense.

In the case of G. v. Alitalia - Societa Aerea Italiana S.p.A, [2] the passenger was travelling from Kiev to Malaga, via Rome when an Italian air carrier lost the passenger's baggage. Some of the items of the baggage were eventually found and sent to the passenger. However, the passenger claims they were de facto destroyed and the passenger disposed of them. The passenger claimed compensation for the material and moral damages from the air carrier. In November 2012, the carrier offered the passenger compensation in an amount he considered unsatisfactory.

The passenger filed a claim against the air carrier in Zamoskvoretskiy District Court of the City of Moscow. The court found that the claim should be dismissed since the passenger had filed it in August 2015. Therefore, the two-year period of limitation stipulated for international aviation claims was not complied with by the passenger.

The Court of Appeals overruled the lower court's decision, finding that the Head of the Moscow Office of the air carrier sent a letter to the passenger in which he admitted carrier liability and offered compensation, which was rejected by the passenger. The Court of Appeals concluded that the two-year period of limitation started on the date of the second offer for compensation, because Article 203 of the Russian Civil Code provides that when liability is admitted, the limitation period runs from the date of such admittance. Effectively, the Court of Appeals construed the letter sent by the air carrier as admittance of debt.

The Moscow City Court eventually considered the case on appeal and concluded that the issue of limitation period is worth consideration by the Presidium of the Moscow City Court (cassation instance) and forwarded the case thereto, construing Article 35(1) of the Montreal Convention and Article 29(1) of Warsaw Convention (establishing two-year period of limitation) and outlining the following positions: [3]

• The two-year limitation period under the Montreal and Warsaw Conventions is mandatory and preclusive. Effectively, it is a maximum period of time during which the interested person shall file the claim with the court. Otherwise, he loses the right to seek recourse through the courts;
• Neither of the Conventions envisage circumstances that would interrupt the period of limitation or contain any reservations that would allow the judge to re-launch the expired period of limitation. If the drafters of the Conventions had intended to stipulate such circumstances or reservations they would have done so explicitly in the texts of the Conventions;
• The limitation period cannot be prolonged by the court with reference to the national law, since it is "not desirable" to apply national regulation in the interests of unification, especially in those situations where the language of the Conventions is clear.

In the Russian case K. V. A. v. Bulgaria Air AD [4] the passenger was denied boarding by Bulgaria Air on a flight from Sofia, Bulgaria, to Moscow, Russia, due to alleged aggressive behavior of a passenger who raised his voice and insulted employees of the carrier. The passenger claimed that during the security control he was asked to hand in his baggage as there were alcoholic drinks inside and the passenger immediately agreed to do so. However, when he reached the check-in desk, the representative of the carrier had cancelled the passenger's registration and denied him boarding. The Moscow City Court concluded that the air carriage agreement between K.V.A. and Bulgaria Air should be governed by Bulgarian law and, therefore, the Montreal Convention and EC 261 should be applied to the case.

The Moscow City Court awarded the passenger with compensation in the amount of €600 under Article 7 of EC 261 and an additional payment for his flight in the amount of €52 based on the following:

• Article 19 of the Montreal Convention establishes carrier liability for damage occasioned by delay during the carriage, unless it took all measures that could reasonably be required to avoid the damage or that it was impossible to take such measures;
• Article 2(j) of EC 261 establishes that "denied boarding" means a refusal to carry passengers on a flight, although they have presented themselves for boarding under the conditions laid down in Article 3(2) of EC 261, except where there are reasonable grounds to deny boarding, such as health, safety or security concerns, or inadequate travel documentation;
• Article 4(3) of EC 261 establishes that if passengers are denied boarding against their will, the operating air carrier shall immediately compensate them in accordance with Article 7 and assist them in accordance with Articles 8 and 9; and
• The carrier was not able to confirm the alleged aggressive behavior of the passenger with any written evidence.

In December 2017, the Court of the First Instance awarded [5] a Russian air carrier, Pobeda Airlines, with material damages of US $3,250 incurred as a result of an emergency landing.

To support a claim for damages under Russian law, the injured party must prove: (1) that the violation of its rights was caused by the wrongdoer's unlawful actions; (2) damages were incurred as a result of the violation; and (3) the amount of damages. The wrongdoer is presumed to be guilty and must prove the absence of guilt.

The air carrier managed to prove that the passenger had smoked on board in violation of the smoking prohibition. The cigarette smoke activated the smoke detectors, and the captain had to conduct an emergency landing. The damages claimed included the carrier's out of pocket expenses related to the emergency landing like the cost of fuel, ground services, aero-navigation services, and labor remuneration for crew members, among others.

The passenger was not able to prove the absence of guilt and was ordered by the court to pay damages. The passenger appealed, and his appeal is still being considered by the Court of Appeals.

At the end of 2017, the same air company filed a number of other analogous claims for damages caused by emergency landings against smokers. If the higher courts uphold the carrier's claims, air companies in Russia would have a useful civil law remedy against passengers whose destructive behavior leads to emergency landings.

In several recent rulings, [6] the Moscow City Court has held that carriers may unilaterally cancel tickets for international carriage following the application of an incorrect tariff (sometimes known as a "mistake fare"), if the fare is subsequently refunded. The court's analysis of the circumstances was as follows:
(1) The Warsaw Convention and the Montreal Convention allow a carrier to apply its conditions of carriage if the conditions are in compliance with the applicable international treaty and national law of the carrier determined on the basis of the Russian conflict of laws provision. Here, the court found that the Civil Codes of the party air carriers, as well as the carriers' conditions of carriage, allowed the carrier to cancel the tickets due to the technical malfunction of the booking systems. At the same time Russian laws, including the Consumer Protection Law, were not applied by the court.
(2) The fact that the claimants had been informed about the technical malfunction through the media and social networks before deciding to purchase extra-cheap tickets was a consideration of the court.
(3) Passengers were notified prior to their flights about the problems with their tickets.
(4) The carriers were able to provide reports on the internal investigation, which stated that the mistake was caused by the technical failures.
(5) The carriers were able to provide documentation showing that their normal average fares were substantially higher. Air companies also submitted statistical information showing the steep increase in the number of passengers when the air fares remained erroneous.
[1] https://www.rbc.ru/rbcfreenews/59b932829a794730a71....

[2] Appellate Ruling of the Moscow City Court dd. 26.07.2016, No. 33-21626.

[3] Decision of the Moscow City Court dd. 15 May 2017 N 4r/l 0-1239/2017.

[4] Appellate Ruling of the Moscow City Court dd. 4 Oct. 2017, No. 33-40167/2017.

[5] Ruling of Tosnenskiy City Court of Leningrad region dd. 07.12.2017, No. 2-3223/2017.

[6] Appellate Ruling of the Moscow City Court dd. 22.03.2017, No. 33-10364/2017; Appellate Ruling of the Moscow City Court dd. 04.10.2016, No. 33-20501/2016; Appellate Ruling of the Moscow City Court dd. 10.05.2016, No. 33-17870/2016.
International Air Transport Association (IATA), 2018.