Damages for delay under the Montreal Convention and EC Regulation 261/2004

Dunbar v easyJet [2015] ScotSC 70

Sheriffdom of North Strathclyde at Paisley
Sheriff Livingston
4 November 2015

This was a claim brought by Ms Dunbar against easyJet in respect of a flight from Glasgow to Malaga on 28th July 2014. Ms Dunbar’s flight was delayed by over 6 hours invoking EC Regulation 261/2004 entitling passengers to compensation for any delay exceeding three hours unless there are both extraordinary circumstances and the delay could not have been avoided even if all reasonable measures had been taken. On the basis of the flight distance, the compensation payable was €400.

The onus was on the easyJet to show that the delay was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

The Sheriff held that the underlying delay was caused by extraordinary circumstances in that the aircraft in question could not leave Gatwick. This was because of an air traffic control decision which itself seems to have been predicated upon a number of factors. It is clear from Recital 15 of the Regulation referring as it does to “the impact of an air traffic management decision” that it is not for the court to look behind whether that decision was correct or not. The fact the decision is made leading to a delay or cancellation is self-evidently “extraordinary circumstances”.

However, the sheriff concluded, “while the original delay between Gatwick and Bologna was caused by extraordinary circumstances and that by the time of the Pursuer’s flight was due to depart the extraordinary circumstances continued to exist I am not satisfied that the Defender took all reasonable measures to avoid the delay meaning the limit or exclusion of liability set out in Recitals 14 and 15 is not invoked due to deemed extraordinary circumstances not existing”.

For further UK case law, see our United Kingdom – Cases page.

Comment by Joseph Wheeler, IALPG: MH17 Annex 13 Report released by Dutch Safety Board

Joseph Wheeler is Principal of the International Aerospace Law & Policy Group (IALPG)

The original article can be found here: http://www.ialpg.com/about-1/news/

13 October 2015: MH17 Annex 13 Report released by Dutch Safety Board

If anyone had any doubt that this much anticipated report would serve as a quasi-criminal dossier then the Dutch Safety Board (DSB) made it abundantly clear that it would not be, starting with the title it gave the MH17 report: “MH17 Crash”. There could be no doubt that this was an air safety investigation report with this controversial and somewhat offensive, in my view, characterisation of the events which unfolded over Ukraine on 17 July 2014.

In short, the report of 13 October 2015 is concerned with why the plane left controlled flight and struck the ground resulting in the death of all occupants – not exactly with who caused a weapon to be fired to accomplish that – just how, and considered reasons as to why that chain of events was permitted to happen.

Analysis in reports such as this, aligned with and facilitated by Annex 13 to the Chicago Convention is limited to examining contributing causes of the accident from an air safety perspective. Thus, those causes typically line up with suitable recommendations to prevent such incidents happening again in future rather than ascribing legal blame

Therefore, it is no surprise that the DSB report focuses on why MH17 should not have been allowed to fly through airspace which could have been closed to civil air traffic altogether, and arguably should have been so prohibited, rather than the much anticipated question of who or which entity caused the weapon to be fired on the aircraft at all. The report considers three simulations done (by Ukraine, Russia and the Dutch) to determine the likely area within which the BUK missile was fired at the aircraft, but falls short of ascribing responsibility to any particular country, group or individual for “pulling the trigger”.

The weapon of destruction

The DSB report confirms the West’s curiosity about the kind of projectile used to down the aircraft – a BUK missile is convincingly demonstrated to have been the fatal medium of destruction (with a warhead described as 9M314M). It is considered to have detonated to the front left (high) side of the cockpit sending hundreds of projectile bow tie and other oddly shaped shrapnel fragments into the skin of the aircraft primarily into the cockpit, killing the flight crew and causing the cockpit to break apart from the aircraft, leading to sudden depressurisation and the mercifully reasonably quick deaths of the occupants. The “crash” was characterised as unsurvivable.

The vexing question of conflict zones

A major theme of the report which is gratifying to have been examined in such detail is the question of civil aviation flight over armed conflict zones. In short, the DSB concluded that almost all operators flew over the dangerous part of Eastern Ukraine without sufficient consideration of the risks involved, and notwithstanding the NOTAMs issued by Ukraine restricting all traffic to increasingly higher altitudes.

Almost all operators flew over the combat zone with no thought that civil aviation was at risk. From 14-17 July 61 operators from 32 states flew above the area and on the day of the “crash” 160 flights operated above until airspace was closed following the tragedy. All operators undeniably considered civil aviation at cruise altitudes in this area were safe from risk.

Sixteen aircraft were shot down in the month before MH17, and Ukraine did not close their airspace when it was responsible for doing so given that there was evidently, in the eyes of the DSB, sufficient risk to justify such an exercise of the state’s sovereign (and thus unshared) power to do so.

The DSB continued that the risk to civil aviation was not adequately identified by ICAO or Ukraine or anyone else.

The clear recommendations about this by the DSB is that states involved in conflict need to put more effort into notifying airspace others about the risk of danger in certain locations; also, operators should be more transparent about the routes they take and the DSB would seek to see changes to regulations internationally to recognise how matters may be improved.

The launch location of the missile

This was considered by the Board and narrowed down to a small area in the east of Ukraine. Shared data with the international team and its own simulations ran by the Dutch and Russians indicate a converging and comparable area thought to have been where the missile was fired from – however, additional forensic work is required to determine launch area and that is for the criminal investigation, being outside the scope of the Annex 13 safety investigation.

Recommendations to ICAO

Overall the report is consistent with a safety investigation in that the DSB really had no choice but to focus on those contributing causes to the “accident” which lend themselves to recommendations to ICAO – ie Ukraine should have done more to control the risks of flying by in its airspace by way of NOTAM which identified the risks and/or closing the airspace altogether, and operators need to be more rigorous with their own risk assessments of where to fly. The airspace remained open for unclear reasons, potentially financial. It was not possible to make recommendations in relation to armed conflicts per se and hence there are no recommendations with respect to the pursuit of or use of weapons within armed conflicts.

The criminal report will take up the matter of the entity which pulled the trigger – that was outside the scope of this investigation.

The three recommendations thus are:

Level 1 – Airspace management in conflict zones

Given that the principle of sovereignty determines that each state is responsible for its own airspace, the DSB recommends thought be given to how better enticements can be given to states to manage their airspace more carefully, coincidental with greater international regulation of airspace by amending the Chicago Convention and its underlying standards and recommended practices to clarify when airspace should be closed.

The flipside to this recommendation betrays a reason why the characterisation of the non closure of Ukrainian airspace on or before 17 July 2014 is not convincing – Art 9 of the Convention permits states to prohibit access to their airspace for reasons of military necessity or public safety (uniformly to aircraft of all states), but, importantly, “[s]uch prohibited areas shall be of reasonable extent and location so as not to interfere unnecessarily with air navigation”. That is an important qualifier and arguably one which makes the actions of Ukraine (legally) reasonable in the circumstances (ie, closing certain altitudes off from civil air traffic, rather than its entire airspace).

In addition, the DSB presents an analysis of the airspace closures or restrictions in other conflict zones around the world demonstrating that airspace restrictions are the usual international practice. This is a finding which suggests against any conclusive indication of airspace closure by Ukraine being the “silver bullet” indirectly suggested by the DSB to have been something which would have prevented the attack, or at least something which was solely to blame.

In a somewhat simplistic characterisation of what may be achievable on this front through and within ICAO internationally the DSB calls for amendments to the Chicago Convention. While it is the case that amendments have been made to the Convention previously (including in relation to the shooting down of civil aircraft with the addition of Article 3 bis, more on which is below) such amendments take a significant amount of time (up to a decade or more). Also, any system which devolves control of sovereign airspace to an external body (even the international civil aviation regulator, ICAO) would necessitate some sharing or informed sharing of sovereignty by states with another actor(s) by virtue of legislating a responsibility to give out sensitive information to other states which the relevant state may or may not even have.

Background on legal concept of sovereignty in international air law

The concept of sovereignty underpins international civil aviation and has since the inception of the Chicago Convention in 1944 and the creation of ICAO at the same time. Article 1 of the Convention states:

The contracting states recognise that every State has complete and exclusive sovereignty over the airspace above its territory.

It is such an important concept that even in areas such as the economic and practical exchange of “rights to fly” by and for airlines between countries, there has been no concluded multilateral solution for these non-controversial, though valuable, rights to be exchanged. It is at best wishful thinking to think that a multilateral solution could be found under the auspices of ICAO for multilateral ceding of sovereignty by all states to ICAO to in some way proactively manage airspace for the purpose of preventing civil flights traversing conflict zones. Even the concept of using ICAO as a clearing house for information from states about conflicts (already being trialled in its Conflict Zone Information Repository website since April 2015) is of limited practical usage.

By way of background Art 3 bis came to pass on 10 May 1984, when ICAO adopted a legal instrument which purported to regulate the law in this area (the Protocol relating to an Amendment to the Convention on International Civil Aviation [Article 3bis]). It entered force on 1 October 1998. This action followed the events of the early 1980s in which unintentional straying into national airspace by certain civilian airliners resulted in military force being used against them (eg, the downing of Korean Air Lines Flight 007 “KE007”). ICAO nations took action to codify the customary international law which already prohibited such uses of force except in exceptional circumstances.

The new protocol was based on a provision in the United Nations Charter and customary principles which prohibit “recourse to the use of force in international relations between States”. In summary, Article 3bis is declaratory in nature and codifies the:

  • obligation of States to refrain from resorting to the use of weapons against civil aircraft in flight;
  • obligation, in the case of interception, not to endanger the lives of persons on board and the safety of aircraft; and
  • right of States to require landing of aircraft in their airspace (without authority) at a designated airport, if there are reasonable grounds to conclude that it is being used for any purpose inconsistent with the aims of the Convention.

The shooting down of flight MH17, whether by surface to air missile, and no matter by whom, constitutes a breach of Article 3bis if it was performed by a State actor.

Level 2: Risk assessment

The second recommendation concerns the view of air operators (airlines) and recognises, quite fairly that these should not take it for granted that “open” airspace is “safe”. Improving airlines’ access to information is needed, and yet is also fraught with difficulty given the sensitivity of military information in many cases. As well as availability of threat information the DSB also recommends ICAO and IATA take steps to facilitate better airline risk assessments of where they should fly – by encouraging states to make information they have available in a timely way, and for IATA, to make their own audits include an assessment of an airline’s risk assessment protocols.

The recommendations about sharing information on a platform which promotes exchange of good practice about such risk assessments is in principal positive, as is the Conflict Zone Information Repository website already in place. The practical issue with such mechanisms is take up across the globe and reliability of the information. In my view there is no substitute for an airline’s own assessment informed by whatever it deems necessary to make its decision on where to fly, using especially public information which is clear and widely available and telling about the risks to aviation including to Malaysia Airlines which cannot argue it was unaware of the downing of aircraft in Ukraine in the week and months prior to MH17 traversing that airspace.

ICAO promulgated its first new Annex to the Chicago Convention in late 2013 (on safety risk management – putting together provisions from other annexes about safety risk assessment as a concept and practical tool). It is arguably already incumbent on airlines to be overseen by their states of registry in terms of risk assessments and to include whatever factors are relevant to determining where and when each flight should plan its route.

Level 3: Operator accountability

This particular recommendation perhaps holds the most promise because it focuses more on the practical rationales for commercial aviation rather than regulation which impact on how disparate and sensitive information is shared amongst perhaps conflicting governments and competing private entities (airlines).

The one thing which will prevent airlines flying through combat zones and taking unnecessary or marginal risks is commercial imperative.

If, as the DSB recommends, IATA encourages airlines to be publicly accountable for the routes it chooses then potential passengers will be able to safeguard their own decisions on where to fly by deciding with whom they will fly. This would inevitably mean that riskier carriers would be pushed out of the aviation market, leaving a positive and lasting impact on air safety than legal or regulatory change alone could never achieve.

Conclusions for liability?

The liability of the airline involved in this case is uncontroversial and has been the subject of previous comment. International law dictates the liability of the carrier as strict in relation to compensating families for the loss of their loved ones. The calculation of damages is a complex question and one which cannot be discussed in detail now as the process is ongoing for passengers’ families.

However, the liability of the entity (or entities, be they states or otherwise) which contributed to the destruction of the aircraft is certainly still an issue at large. The DSB report would tend to suggest some responsibility lies with Ukraine but my view would be that that assertion is overly simplistic and denies the reality of the practical context in which aviation decisions are made to control airspace.

It may seem like an example from left field but the world will recall the debacle which resulted from closures of airspace following the Icelandic volcano eruption in 2010. The solution of that dilemma for the future was the creation of operator guidelines for risk assessment leaving the ultimate decision on where and when operators would fly or risk flying near to volcanic ash to airlines themselves – it was a commercial reality that regulation at international level was resisted in favour of an industry solution that left something which could so affect the primary driver of airlines (profitability) in their own hands.

Thus, it is suggested that the third recommendation by the DSB will be the one which prompts airlines to make their risk assessments more carefully than any changes to international standards and recommended practices through ICAO rule changes. Passengers vote with their airfares – and those which take ostensibly dangerous risks with passenger lives will fail to flourish post MH17.

EU Commission calls for stricter enforcement of passenger rights legislation in Europe

European Commission – Press release

Commission calls for stricter enforcement of passenger rights legislation in Europe

Brussels, 03 July 2015

As millions of European citizens will be travelling during the summer period, today the Commission is calling for better application and enforcement of passenger rights legislation in the European Union. As a first remedy, the Commission today adopted interpretative guidelines clarifying the existing rules in the rail sector.

EU Commissioner for Transport Violeta Bulc said: “Transport is not about infrastructure, tracks, trains or trucks, it is about people. That is why the Commission has always put citizens at the heart of its transport policy. Under its leadership, the EU became the first area in the world where passengers have guaranteed rights across all forms of transport. Which is why I cannot accept that a lack of enforcement jeopardises this achievement. I therefore call on all Member States to ensure that EU legislation is correctly applied. The rail guidelines adopted today will provide some assistance. I also hope that the discussions in the Council on a new Regulation in the air sector can move forward, for the benefit of EU citizens.”

Addressed to the rail transport industry and to national authorities, the guidelines adopted today seek to clarify and strengthen the application and enforcement of rail passenger rights in the European Union. In particular, an assessment of the implementation of the Regulation and of the relevant case law of the European Court of Justice (ECJ) pointed at a need to clarify the following points:

  1. Information: All actors need to make information about travel, tariffs and tickets available to passengers, including in alternative formats for persons with disabilities.
  2. Delays, cancellations and missed connections: Passengers holding separate tickets under a single contract have equal rights as passengers with a single ticket.
  3. Rights of persons with disabilities or reduced mobility: Rail companies cannot ask for medical certificates as a precondition to sell a ticket, to allow these persons to use rail services or to justify their need for assistance.
  4. Complaint handling, enforcement and cooperation between national authorities: Railway companies and national authorities have to set up adequate complaint handling mechanisms. Railway companies have to reply to complainants within strict time frames.

Regarding the air sector, in 2013 the Commission proposed to amend the current Regulation on air passenger rights. The legislative procedure in the European Parliament and Council is ongoing. Existing rights have nevertheless already been further developed and strengthened by the case-law of the ECJ. The Commission has therefore decided to make available a summary of the most relevant judgements on air passenger rights and of their practical implications on its web page. They include compensation for delays, compensation for missed connecting flights or precisions to the notion of “extraordinary circumstances” under which airlines can be exempted from paying the compensation.


Protecting the rights of passengers across all transport modes is a long-standing commitment of the Commission. For this holiday season, EU Commissioner for transport Violeta Bulc recorded this video clip explaining why protecting passengers’ rights matters to the Commission.

Next steps. In addition to the Commission’s on-going information campaign to raise citizens’ awareness on passengers’ rights, the Commission services will also launch an impact assessment in order to examine options to further improve rail passenger rights in the EU. The Commission will also look into options for a legal framework for passenger rights when using different modes of transport for a single journey.

Passenger Name Records: MEPs back EU system with data protection safeguards

European Parliament: Press Release

Passenger Name Records: MEPs back EU system with data protection safeguards
LIBE Press release – Justice and home affairs − 15-07-2015 – 16:24

Draft EU rules on sharing and protecting the Passenger Name Record (PNR) data of people flying to or from the EU, and its use by member states and Europol to fight terrorism and serious transnational crime, were approved by the Civil Liberties Committee on Wednesday. This data must only be used to prevent, detect, investigate and prosecute these crimes, said MEPs, inserting safeguards to ensure “the lawfulness of any storage, analysis, transfer and use of PNR data”.

“Without this EU system in place a number of EU governments will go it alone and create their own systems. That would leave gaps in the net and create a patchwork approach to data protection. With one EU-wide system, we can close the net and ensure high standards of data protection and proportionality are applied right across Europe. The emerging threat posed by so-called ‘foreign fighters’ has made this system even more essential”, said Civil Liberties Committee rapporteur Timothy Kirkhope (ECR, UK).

“PNR is not a ‘silver bullet’ but it can be an invaluable weapon in the armoury. We will now open talks with national governments with a view to reaching a final agreement before the end of the year”, he added.

The amended rules were approved by 32 votes to 27. The mandate to open negotiations with the EU Council of Ministers was approved by 36 votes to 14, with 8 abstentions.

Only flights to and from the EU

The PNR rules would apply to air carriers and non-carriers such as travel agencies and tour operators operating “international flights”, i.e. those to or from the EU, according to the committee amendments. They would not apply to “intra-EU” flights between EU member states.

Offences covered

Under the amended rules, PNR data could be processed “only for the purposes of prevention, detection, investigation and prosecution of terrorist offences and certain types of serious transnational crime”. The list approved by MEPs includes, for example, trafficking in human beings, sexual exploitation of children, drug trafficking, trafficking in weapons, munitions and explosives, money laundering and cybercrime.

Data protection safeguards

The application of these rules “must be duly justified and the necessary safeguards must be in place in order to ensure the lawfulness of any storage, analysis, transfer and use of PNR data”, says the approved text.

Safeguards inserted by MEPs include the following requirements:

  • Member states’ “Passenger Information Units” (PIUs) would be entitled to process PNR data only for limited purposes, such as identifying a passenger who may be involved in a terrorist offence or serious transnational crime and who requires further examination,
  • PIUs would have to appoint a data protection officer to monitor data processing and safeguards and act as a single contact point for passengers with PNR data concerns,
  • all processing of PNR data would have to be logged or documented,
  • passengers would have to be clearly and precisely informed about the collection of PNR data and their rights, and
  • stricter conditions would govern any transfer of data to third countries.

Data protection provisions prohibiting the use of sensitive data or the transfer of PNR data to private parties were also backed by MEPs,

Data retention period

PNR data transferred by air carriers and non-carriers would be retained in the national PIU for an initial period of 30 days, after which all data elements which could serve to identify a passenger would have to be “masked out”, and then for up to five years.

The “masked out” data would be accessible only to a limited number of PIU staff, with security training and clearance, for up to four years in serious transnational crime cases and five years for terrorism ones.

After the five years, PNR data would have to be permanently deleted, unless the competent authorities are using it for specific criminal investigations or prosecutions (in which case the retention of data would be regulated by the national law of the member state concerned).

Step up information-sharing among member states

MEPs inserted new provisions requiring member states to share PNR data with each other and with Europol and stipulating conditions for doing so. EU countries should use Europol’s Secure Information Exchange Network Application (SIENA) system to share PNR data. A one-stop shop could be created to register and pass on requests for information exchanges, MEPs suggest.

Next steps

This vote gives the rapporteur a mandate to start negotiations with the EU Council of Ministers to agree on the draft directive. The three-way talks between Parliament, Council and Commission negotiators (“trilogues”) should start soon.

Note to editors

In a resolution voted on 11 February 2015, Parliament committed itself “to work towards the finalisation of an EU PNR directive by the end of the year” (reiterated in a resolution voted on 9 July 2015) and encouraged the Council to make progress on the data protection package so that trilogues on both “could take place in parallel”.

The first trialogue on the data protection regulation took place on 24 June, after the Council agreed its general approach on 15 June. The Council agreed its general approach on the EU PNR proposal in April 2012.

In the chair: Claude Moraes (S&D, UK)

Procedure: co-decision (first reading), mandate for negotiations
REF. : 20150714IPR81601
Updated: 15-07-2015 – 20:25

CJEU judgment on air carrier liability under the Montreal Convention

Eleonore Prüller-Frey v Norbert Brodnig and Axa Versicherung AG
C-240/14, CJEU, 9 September 2015

Reference for a preliminary ruling — Air carrier liability in the event of accidents — Action for damages — Montreal Convention — Regulation (EC) No 2027/97 — Flight operated free of charge by the owner of a property in order to show that property to a prospective purchaser — Regulation (EC) No 864/2007 — Direct action provided for by national law against the civil-liability insurer

Non-applicability of Article 17 of the Montreal Convention to a non-paying passenger on a flight with the purpose of surveying a property. Direct action against insurer permitted.

The Court held:

1. Article 2(1)(a) and (c) of Council Regulation (EC) No 2027/97 of 9 October 1997 on air carrier liability in respect of the carriage of passengers and their baggage by air, as amended by Regulation (EC) No 889/2002 of the European Parliament and of the Council of 13 May 2002, and Article 1(1) of the Convention for the Unification of Certain Rules for International Carriage by Air, concluded in Montreal on 28 May 1999 and approved on behalf of the European Union by Council Decision 2001/539/EC of 5 April 2001, must be interpreted as meaning that they preclude a determination on the basis of Article 17 of that Convention of a claim for damages brought by a person who — whilst she (i) was a passenger in an aircraft that had the same place of take-off and landing in a Member State and (ii) was being carried free of charge for the purpose of viewing from the air a property in connection with a property transaction planned with the pilot of that aircraft — was physically injured when the aircraft crashed.

2. Article 18 of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) must be interpreted as meaning that, in a situation such as that of the case before the referring court, a person who has suffered damage is entitled to bring a direct action against the insurer of the person liable to provide compensation, where such an action is provided for by the law applicable to the non-contractual obligation, regardless of the provision made by the law that the parties have chosen as the law applicable to the insurance contract.

For further CJEU case law, see our European Law – Cases page.


CJEU judgment on denied boarding and cancellation

Corina van der Lans v Koninklijke Luchtvaart Maatschappij NV
C-257/14, CJEU, 17 September 2015

Reference for a preliminary ruling — Air transport — Passengers’ rights in the event of delay or cancellation of a flight — Regulation (EC) No 261/2004 — Article 5(3) — Denied boarding and cancellation — Long flight delay — Compensation and assistance to passengers — Extraordinary circumstances

The Court held Article 5(3) of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 must be interpreted as meaning that a technical problem, such as that at issue in the main proceedings, which occurred unexpectedly, which is not attributable to poor maintenance and which was also not detected during routine maintenance checks, does not fall within the definition of ‘extraordinary circumstances’ within the meaning of that provision.

For further CJEU case law, see our European Law – Cases page.


EALA’s 10th Munich Liability Seminar – 14 September 2015


Liability, passenger rights, and insurance in the air transport and aerospace industries

14 September 2015
Hilton Hotel Munich Airport

Registration Form

The 10th Munich Liability Seminar will again cover a wide range of topical issues:
• New air traffic management technology will improve safety, but may change liability risks for manufacturers and operators. Will this re-quire new liability insurance solutions?
• Regulation 261/2004 – current issues and how air carriers can respond
• Liability issues resulting from overflight of conflict zones
• Update on toxic fumes in aircraft and air traffic disruptions resulting from volcanic ashes
• Update on liability of airports for birdstrikes
• Perhaps now more than ever, airframe manufacturers have available to them a range of strong defenses in aviation accident litigation filed in the United States, including
reinvigor-ated defenses based on personal jurisdiction and forum non conveniens.
• The Germanwings crash has stirred a debate about whether moral damages/pain and suffering awards for victims of aviation accidents and their families should be increased. It has been proposed that an international instrument should govern these damages.


Takeover bids and European competition law: Ryanair Holdings v The Competition & Markets Authority

Ryanair Holdings Plc v The Competition And Markets Authority & Anor [2015] EWCA Civ 83
Court of Appeal
Lord Justice Laws, Lord Justice Patten, Lord Justice Floyd
12 February 2015

Takeover bids and European competition law. Ryanair appealed to the Court of Appeal against a decision of the Competition Appeal Tribunal (view here), who rejected previous challenges to the findings of the Competition Commission (CC). Ryanair’s three grounds of appeal were:

(1) it was procedurally unfair for the CC to have refused to disclose to Ryanair (or its external lawyers) the material allegations and evidence relied upon by the CC in reaching the conclusion that Ryanair might affect Aer Lingus’s ability to participate in a combination with another airline. Particular weight was attached to the evidence of other airlines but their identities and the underlying evidence were withheld from Ryanair despite its requests for their disclosure. It was therefore denied a fair opportunity to respond;

(2) the decision to require divestiture of all but 5% of the minority stake involved a breach of the duty of sincere co-operation under Article 4(3) of the Treaty on European Union (“TEU”) because of a material risk of conflict between the order and a future decision of the European Commission (following the appeal to the General Court) that Ryanair should be permitted to bid for 100% of Aer Lingus; and

(3) The divestiture remedy was disproportionate and was imposed by the CC on the basis of a misdirection as to the degree of risk of an SLC occurring that has to be found before a remedy can be imposed and which dictates the type of remedy required.

Appeal dismissed.

For further UK case law, see our United Kingdom – Cases page.

Application for annulment of Decision 2013/199/EU concerning differentiated air travel tax rates implemented by Ireland

Aer Lingus Ltd v European Commission
T-473/12, CJEU, 5 February 2015

State aid — Irish tax on air passengers — Lower rate for destinations no more than 300 km from Dublin — Decision declaring the aid incompatible with the internal market and ordering its recovery — Advantage — Selective nature — Identification of the beneficiaries of the aid — Article 14 of Regulation (EC) No 659/1999 — Obligation to state reasons

Application for annulment of Commission Decision 2013/199/EU of 25 July 2012 on State aid Case SA.29064 (11/C, ex 11/NN) concerning differentiated air travel tax rates implemented by Ireland.

Application granted. Article 4 of Commission Decision 2013/199/EU of 25 July 2012 on State aid Case SA.29064 (11/C, ex 11/NN) — Differentiated air travel tax rates implemented by Ireland, in so far as it orders the recovery of the aid from the beneficiaries for an amount which is set at EUR 8 per passenger in recital 70 of that decision annuled.

For further CJEU case law, see our European Law – Cases page.