The Hearing took place between 10:30am on Tuesday 13th May and 4pm on Wednesday 14th May 2014, with Robert Lawson QC representing Thomson Airways Ltd (“Thomson”) and Akhil Shah QC on behalf of the passenger, James Dawson (“Dawson”).
Thomson will say that according to English law the time-limit is 2 years, however Dawson argues that it is 6 years.
In support of Thomson’s argument they rely on the House of Lords (now known as the Supreme Court) case of Sidhu v British Airways Plc , which held that:-
“[the Montreal Convention] is designed to set out all the rules relating to the liability of the carrier which are to be applicable to all international carriage of persons, baggage or cargo by air” (Emphasis added)
In other words, the Court said that all claims arising out of carriage of persons by air should be subject to the Montreal Convention.
The Montreal Convention provides that “the right to damages shall be extinguished if an action is not brought within a period of two years.”
It follows that as a claim for a delay under Regulation 261 relates to carriage by air, then according to Sidhu it must be subject to the 2 year time-limit imposed by the Montreal Convention.
Thomson stress that the wording in Sidhu is quite clear in that it encompasses ‘all’ liability of the carrier for delay, i.e. regardless of whether the claim is for damages or otherwise. The Court of Appeal appeared to agree with this argument and therefore did not see the need to hear lengthy submissions on the categorisation of a claim brought under article 7 of Regulation 261.
The difficulty however faced by the Court is that the decision in Sidhu is irreconcilably different from the numerous rulings of the Court of Justice of the European Union (“CJEU”) – the highest Court in Europe, which has said on numerous occasions that the provisions of Regulation 261 ‘fall outside the scope’ of the Montreal Convention (See IATA and ELFAA, Sturgeon and Others, Nelson and Others and Moré v KLM).
Dawson will say that the Court of Appeal is bound by those decisions of CJEU, as they overrule the earlier decision of the Supreme Court in Sidhu.
In short, regardless of whether the decisions of the CJEU are correct or not, the Court of Appeal is nevertheless bound by those decisions.
In turn, as the CJEU has already said that Regulation 261 falls outside the scope of the Montreal Convention, then the 2 year time-limit imposed by that Convention cannot apply Therefore, the default position is that the time-limit is 6 years as per Section 9 of the Limitation Act 1980.
Thomson argue that whilst the Court of Appeal is bound to follow a ruling (or decision) of the CJEU, it is not bound to follow its reasoning. The argument is developed further by stating that there is in fact no CJEU ‘ruling’ concerning the issue of time-limits, i.e. the issue has only been addressed by ‘reasoning.’ As such, the Court of Appeal has the power to disregard the reasoning and simply apply the ruling in Sidhu.
The Court of Appeal is therefore left with having to decide:-
1. Has the CJEU made a ruling on the scope of the Montreal Convention; and
2. Was the CJEU entitled to make such a ruling.
If the CJEU did make a ruling to that affect (as contended by Dawson) and if the CJEU were entitled to make that ruling (Which Thomson accept that they were) then the appeal will fail and Dawson will succeed.