At first sight, the question at stake in the ECJ’s decision of 22 November 2012 is beguilingly straightforward: if several passengers bundle their belongings into a single suitcase that is subsequently lost by the airline, can they each claim for their loss up to the relevant cap of 1131 Special Drawing Rights? The Court’s unsurprising answer in the affirmative is, however, important beyond that immediate issue. Its assertion of jurisdiction to interpret the substantive rules of the Montreal Convention of 1999 presents a departure from the existing hybrid approach to the regulation of airline liability resulting from contracts of carriage by air, where a single regime is independently interpreted and applied by national courts.
An air carrier’s liability for the loss of or damage to passenger’s baggage is regulated by Articles 17 and 22 of the Convention for the Unification of Certain Rules for International Carriage by Air (the Montreal Convention of 1999), which provide for carrier liability to be capped at 1131 Special Drawing Rights. All EU Member States are signatories to this convention, and the Union itself acceded to the Convention by Council Decision 2001/539, with the substantive provisions of the Montreal Convention adopted in Regulation 2027/97 as amended by Regulation 889/2002. The Convention’s goal is to balance the protection of consumers and the economic interests of air carriers, by imposing a system of liability caps in return for generous forum provisions and relatively strict liability standards.
In the summer of 2008, the Sanchez family (Mr Sanchez, Ms Gonzales and their two children) travelled from Barcelona to Paris on the Spanish airline Iberia. Their belongings were packed into two suitcases irretrievably lost by the airline. In their claim for €4,400 (the then Euro-equivalent of the Montreal cap), the Sanchez family asserted that they were each entitled to compensation up to the relevant limit, even though their possessions had not been packed or checked in as separate suitcases. In its preliminary reference, the Provincial Court of Barcelona enquired, in essence, whether this claim could be sustained, or whether compensation had to be limited to one passenger per piece of checked baggage.
Having decided to proceed without an Opinion by the Advocate General, the Court ruled in favour of the interpretation of Article 22(2) proffered by the claimants. In combination with the provisions of Article 17(2), it was evident from the text of the Convention that whilst it was the loss or destruction of a checked piece of baggage that triggered the carrier’s liability, the entitlement to compensation fell on each individual passenger. The stipulation in Article 3(3) of the Montreal Convention that carriers are to deliver a baggage identification tag for each piece of checked baggage to the passenger could not be relied upon to support a contrary interpretation.
This textual approach to the question was supplemented by a purposive interpretation in line with the passenger-protective objectives of the Montreal Convention. Given the relatively low limits in question, the result would furthermore not be a significant or uncertain liability threat to air carriers. Finally, it was up to the national courts in each Member State to establish on the facts of each case whether a passenger had actually sustained the loss in question. Relevant factors included, but were not limited to, family membership, joint ticket purchase and simultaneous check-in.
The Court’s interpretation of the Montreal Provision is undoubtedly correct, and sits in line with its general approach in questions of consumer protection. The potential impact on airlines is limited: pursuant to Article 50 of the Montreal Convention carriers need to be insured against claims under its regime, and in practice the per-passenger limitation will cut both ways: an individual passenger cannot increase the carrier’s potential liability simply by dividing valuable possessions across several pieces of checked-in luggage.
The importance of its decision, however, extends beyond the rather straightforward question posed by the Spanish court. In international aviation circles, the Union’s legislative and judicial activity has come to be viewed with significant (though arguably unfounded) suspicion, particularly following the enactment of Regulation 261/2004, which grants passengers extensive rights in the case of adverse events such as flight delay or cancellation, and the Court’s aggressive extension of these provisions in Case C-402/07 Sturgeon. Whilst there have been several recent high-profile cases in which the Court pronounced on the relationship between EU legislation and the Montreal Convention, it had not previously been asked to interpret substantive provisions of the latter.
This is a significant departure from earlier decisions. In Case C-301/08 Bogiatzi v Luxair, the ECJ found that it was not competent to interpret the rules laid down by the Montreal regime’s predecessor, the Warsaw Convention of 1929, even though all Member States had been party to it. As a result of the Union’s accession to the Montreal Convention, its text has become an ‘integral part of the EU legal order’ , and the Court saw itself bound to issue a preliminary ruling on the interpretation of the relevant Articles.
The assertion of ECJ jurisdiction has potentially wide-reaching implications for the hybrid nature of the Montreal regime. Designed as a unifying text with equal application across all signatory states, the interpretation of key terms has nonetheless been left up to the courts seised of a relevant dispute, subject only to the principle of international comity. Given the universally binding effect of the ECJ’s preliminary rulings on Member State courts, a hitherto unknown degree of consistency and predictability in the application of the Montreal Convention is a possibility on the horizon. As the European Union sees just over a third of worldwide air passenger traffic pass through its airports on an annual basis, this precedential effect may even radiate beyond Union borders and establish the Luxembourg court as a major force in providing authoritative interpretations of the Montreal Convention.
Fellow, St John’s College, University of Oxford
I am grateful to Ben Gardner of Quadrant Chambers for helpful discussion.