The CJEU recently issued a decision in the case of YL v Altenrhein Luftfahrt GmbH (12 May, Case C‑70/20, ECLI:EU:C:2021:379) interpreting the term “accident” in Article 17 of the Montreal Convention 1999. The said Article provides that an airline is liable for a passenger’s bodily injury on condition that the injury is caused by an accident that takes place on board the aircraft or during the operations of embarking or disembarking. The case was referred to the CJEU by the Supreme Court of Austria.

The facts of the case are not overly complicated. The passenger claimed to have suffered spinal disc injury (the bodily injury) as a result of the heavy landing of the aircraft (the alleged accident) that was transporting her from Vienna to St. Gallen/Altenrhein. The flight data recorder demonstrated that the vertical load borne by the landing gear and the structural parts of the aircraft during landing reached 1.8g, below the manufacturer’s limitation that was set at 2g. The Court noted that the passenger experienced a heavy landing, yet it was “within the normal operating range of the aircraft in question” (para 14). The Court further noted that heavy landings are to preferred for safety reasons at the St Gallen/Altenrhein airport and accepted that the pilots committed no errors (para 14). 

Historically, the rule of thumb is that cases of heavy landing are not considered accidents for the purposes of Article 17, unless the roughness of the landing is “either unusual or beyond the expectations of an air traveller” (Salazar v Mexicana Airlines 20 Avi 17,114 (WD Tex, 1986), affd 800 F 2d 1143 (5th Cir, 1986) as found in Shawcross and Beaumont on Air Law, Chapter 37, para 691). The CJEU concluded that the heavy landing in question was not an accident, yet in reaching this (correct) conclusion followed a way of thinking that has the potential to change decidedly the interpretation of the term “accident” in Article 17.

The term “accident” is not defined anywhere in Montreal Convention 1999 (or in its predecessor, the Warsaw Convention). Its prevailing interpretation comes from the US Supreme Court case of Air France v Saks 470 US 392 (1985) which, in a nutshell, defined accident as an unusual or unexpected event that is external to the passenger and not the passenger’s own internal reaction to the usual, normal and expected operation of the aircraft.  As Professor David Mcclean recently wrote (in file with the author) regarding the Saks definition “…the unexpectedness of what has happened is central to the idea of an accident. It seems important that unexpectedness be viewed from the standpoint of the passenger; to see it from that of the airline would attract ideas of foreseeability that belong to a negligence analysis”. The benefits of the no-negligence interpretation of Saks (and the reasons for becoming the prevailing definition since then) is that it relieves the passengers of the requirement to prove fault and creates a standard that is detached from domestic interpretations of value-laden terms such as duty of care and foreseeability.   

The reasoning of the CJEU has the potential to wave goodbye to this era of interpretation as it applies the definition of the term “accident” that was recently created in the case of Niki Lufthahrt (19 December 2019, Niki Luftfahrt, C‑532/18, EU:C:2019:1127), namely that accident is an “unforeseen, harmful and involuntary” event. As such, the focus of the Court’s inquiry in our case was whether the heavy landing was “unforeseen”. For the CJEU, foreseeability is not to be determined by reference to the passenger’s expectations as that would create unfair results for airlines that run against the balance of interests achieved in the Montreal Convention 1999. Instead, it is to be judged from the airline’s perspective, namely by reference to industrial standards, operating manuals and safety regulations:

“Compliance… is aimed at ensuring a landing accomplished in accordance with the applicable procedures and limitations, set out in the flight manual of the aircraft in question, or any equivalent airworthiness documentation relating to it, and taking into account the rules of the trade and best practice in aircraft operation, even if that landing is perceived by certain passengers as being harder than they were expecting” (para 39).

As the landing in question complied with the technical procedures and margins and the pilots committed no error, the CJEU concluded that the bodily injury did not result from an accident. By doing so, the Court ushers us in an era that negligence takes centre stage in the legal inquiry of Article 17: the further the acts of aviation professionals fall short of industrial norms, the easier will be to establish that the injury was caused by an unforeseeable event that constitutes an accident. As such, the door is open for courts to make policy judgments based on negligence considerations that have strong and diverse domestic flavours.  

Admittedly, the tendency to link the term “accident” in Article 17 with industrial standards is not new. It has been brewing for a while as several courts have interpreted (or considered interpreting) the “unexpected” element of the Saks’ definition by reference to industrial practices (for example, see my comments on Labbadia v Alitalia (Societa Aerea Italiana SpA) [2019] EWHC 2103 and Salih v Emirates (No. 2) [2019] NSWDC 715 in this blog). Even Lord Mance in In re DVT [2006] 1 AC 495, paras 78-79 linked, albeit obiter, the “usual, normal and expected operation of the aircraft” to industrial behavioural standards, when he argued that “[t]he present case involved carriage by air in an aircraft and, in a manner, which were, in terms of industry standards and practice, at the relevant times normal, usual and expected….But it is accepted that it was neither industry nor the respondent air carrier’s practice at the relevant time to give such warnings or advice”.  Lord Scott, in the same case (para 24), went a step further and posed a question that, following the CJEU decision, becomes relevant again: “how the case would look if there were such an established practice and if by an oversight the usual warnings were not given does not arise for consideration in the present case”.  

The reasoning of the CJEU in YL gives the green light for such considerations to dominate the inquiry of what constitutes accident;  even the use of the term “foreseeability”, instead of “usual and expected”,  has so strong negligence connotations that courts are likely to explore them by reference to their own cognitive biases and their domestic tort law cases. While the YL case suggests that the universal industrial standards of aviation will provide this common ground of uniform interpretation of an international treaty, I am not optimistic. And I will use the following factual scenario as a taste of what we might experience in the future with respect to common industrial standards:

In the unreported English case of Singhal v British Airways plc (2 November 2006, Uxbridge County Court) the passenger injured her left ankle while disembarking from a B777 on a jetty at LHR that was fitted at a level six inches below the door. The District Judge held that the injury was not caused by an accident as he accepted evidence of industrial standards, namely that “on a 777 aircraft…. a step of six inches or so is necessary because otherwise the top of the jetty will foul the door, which on an aircraft of that type opens outwards…”(para 10). As the jetty was operated in accordance with the airport manual, the drop could not be described as unusual and unexpected, and thus could not qualify as accidental.

On appeal (20 October 2007, Wandsworth County Court), Mr Recorder Bueno QC reversed the decision, as he held that the airport manual was not enough to make the six-inch fall so common and generic to qualify as usual and expected. For him the manual was “confined to the apparent practice at Heathrow Airport” and required evidence that the six-inch drop is universal practice:

“There is, for example, no evidence whatever of the practice at other airports, whether in the UK or elsewhere, with regard to Boeing 777 aircraft or other aircraft with different exit characteristics, whether this form of alignment is universal, whether different types of jetway are used which eliminate the necessity for a step, whether ramps are employed, whether practices elsewhere are to give warnings – and so on and so forth. It would thus be unsafe to make a finding which is based only on the manual in use at Heathrow Airport…” (para 49).

I wrote in 2009 (Risk and Liability in Air law, paras 5.242-5.245) that this conclusion runs contrary to the spirit of the Convention and the reasons behind an interpretation that favours unexpectedness over foreseeability. I also hoped that it will not be used extensively, a statement that was accurate until the 12th of May 2021. It remains to be seen whether courts around the world will be persuaded by the new approach of the CJEU. If they do, there is a real risk that the interpretation of the term “accident” will be disunified by reference to domestic negligence concepts.

The preservation of commercially sensitive information during litigation

(Image by 726056 by pixabay)

Issues of confidentiality often arise in litigation under procurement challenges, as illustrated in the recent case of Bechtel v High Speed Two (HS2) [2021] EWHC 458.

In this case Mr Justice Fraser noted, “[I]n my judgment, the level of profit in percentage terms that a tenderer included in its bid in this procurement competition is properly described as commercially confidential, and is also something that any tenderer, whether a claimant in proceedings or otherwise, would wish to keep confidential for justifiable reasons.”[35]

In terms of how to retain the confidentiality of such information during litigation, it is contrary to open justice and transparency to have trials conducted (even partially) in secret for all but those legal representatives who sit within a court’s prescribed ‘confidentiality ring’.

At the same time judgements need to be readily comprehensible and include reference to all relevant material and reasoning of the the judge, so having a separate confidential appendix or schedule in a judgement should only occur when there is no viable alternative.

In the circumstances of the present case Mr Justice Fraser concluded there was no viable alternative available to him, for without such a confidential appendix to his judgement (available only to those within the ‘confidentiality ring’), he “would run the real risk of destroying justified confidentiality in commercial issues.”[34]

The affair of the century? France’s Urgenda Moment.

In March 2019, various NGOs lodged four charges before the administrative court of Paris against the French State in respect of its deficiencies in the fight against climate change, and sought reparation for their moral damage, for ecological damage. Last Wednesday the court ruled that the action for compensation for ecological damage, provided for by the civil code, was admissible and open against the State. The court held that the State should be held responsible for part of this damage if it had not respected its commitments in terms of reducing greenhouse gas emissions. It rejected the claim for compensation for ecological damage and stressed that such compensation is primarily in kind, the damages being pronounced only in the event of impossibility or insufficient repair measures. 

However, the applicants were justified in requesting compensation in kind for the ecological damage caused by non-compliance with the objectives set by France in terms of reducing greenhouse gas emissions. A two month period for additional investigation was ordered to determine the measures to be ordered to the State to repair the damage caused or prevent its aggravation.

Finally, the court considered that the shortcomings of the State in respecting its commitments in the fight against global warming undermined the collective interests defended by each of the applicant associations, and awarded each of the NGOs the sum of one euro which each had requested by way of compensation. 

The judgment, in French, is to be found here: 1904967-1904968-1904972-1904976

Last year’s New Year’s Day it was Sulphur – this year it’s Cyber

As from today, the IMO’s Resolution MSC.428(98) – Maritime Cyber Risk Management in Safety Management Systems – kicks in. The resolution encourages administrations to ensure that cyber risks are appropriately addressed in existing safety management systems (as defined in the ISM Code) no later than the first annual verification of the company’s Document of Compliance after 1 January 2021. The IMO’s Guidelines Present five functional elements that support effective cyber risk management, which are not sequential – all should be concurrent and continuous in practice and should be incorporated appropriately in a risk management framework:

1 Identify: Define personnel roles and responsibilities for cyber risk management and identify the systems, assets, data and capabilities that, when disrupted, pose risks to ship operations.

2 Protect: Implement risk control processes and measures, and contingency planning to protect against a cyber-event and ensure continuity of shipping operations.

3 Detect: Develop and implement activities necessary to detect a cyber-event in a timely manner.

4 Respond: Develop and implement activities and plans to provide resilience and to restore systems necessary for shipping operations or services impaired due to a cyber-event.

5 Recover: Identify measures to back-up and restore cyber systems necessary for shipping operations impacted by a cyber-event.

Happy New Year!

It has been a challenging and in many ways difficult year for us all! But, the Institute of International Shipping and Trade Law has continued its activities doing what it does best: publishing academic work, organising events and contributing to the development of law and policy.

We would like to wish all of our friends, colleagues and followers a happy new year and we hope everyone safely enjoy the festive season! It is our expectation that 2021 will be a better year for us all!

The Third Group of Amendments to the Maritime Labour Convention 2006 Enters into force Later this Month

Later this month, the third group of amendments to the Maritime Labour Convention 2006 will be entering into force (26 December 2020). While these amendments have been discussed in a previous post on this blog , it may be worth reminding that they relate to Standard A 2.1, Standard A 2.2 and Regulation 2.5 of the Convention. The amendments ensure that a seafarer’s employment agreement (SEA) shall continue to have effect, wages and other contractual benefits under the SEA, relevant collective bargaining agreements or applicable national laws shall continue to be paid and the seafarers’ right to be repatriated shall not lapse for as long as a seafarer is held hostage on board a ship or ashore by pirates and armed robbers.

IISTL Celebrating Its 20th Anniversary with Sir Peter Gross!

This year we are celebrating our 20th anniversary! Yes it has been 2 decades since the foundation of the IISTL in 2000 by Professor DR Thomas! The current Director Professor Soyer on behalf of every IISTL member and the School of Law wishes to invite you to join us to celebrate this great occasion that also coincides with our University’s Centenary!

7 December 2020 at 6.00 pm (online)

Book your place online:

The Deepwater Horizon liability insurance case. The arbitrator’s duty of disclosure and removal under s.24 of the Arbitration Act 1996.

Halliburton Company (Appellant) v Chubb Bermuda Insurance Ltd (formerly known as Ace Bermuda Insurance Ltd) (Respondent)  [2020] UKSC 48 was a dispute relating to the appointment of Mr Ken Rokison QC as sole arbitrator under a liability insurance policy which arose out of damage caused by an explosion and fire on the Deepwater Horizon drilling rig in the Gulf of Mexico. The relevant parties were BP Exploration and Production Inc. (“BP”) the the lessee of the Deepwater Horizon rig, Transocean Holdings LLC (“Transocean”) the owner of the rig and provider of crew and drilling teams to BP, and, Halliburton Company (“Halliburton”)who provided cementing and well-monitoring services to BP.

Halliburton and Transocean both entered into a Bermuda Form liability policy with the respondent, Chubb Bermuda Insurance Ltd (“Chubb”). A  US judgment was given apportioning blame between the parties, and Halliburton settled the claims against it. Chubb refused to pay out  under the liability policy, contending that Halliburton’s settlement was not a reasonable settlement. The same happened to Transocean. The Bermuda Form provided for arbitration.

Mr Rokison was appointed as sole arbitrator in Halliburton’s arbitration against Chubb, after the parties were unable to agree a third arbitrator. Subsequently Mr Rokson was appointed as an arbitrator in two further Deepwater Horizon references. The first appointment was made by Chubb and related to Transocean’s claim against Chubb. The second was a joint nomination by the parties involved in a claim by Transocean against another insurer.

When Halliburton discovered this they applied to the court under section 24 of the Arbitration Act 1996 to remove Mr Rokison as an arbitrator. That application was refused. The Court of Appeal then found that, while Mr Rokison’s proposed appointment in the subsequent references should have been disclosed to Halliburton, an objective observer would not in the circumstances conclude there was a real possibility of bias.

On Friday the Supreme Court unanimously agreed, Lord Hodge giving the principal judgment, and dismissed the appeal. In considering an allegation of apparent bias against an arbitrator, the test is whether the fair-minded and informed observer would conclude there is a real possibility of bias. The duty of disclosure is a legal duty and not simply good arbitral practice, and is a component of the arbitrator’s statutory obligations of fairness and impartiality. It does not, however, override the arbitrator’s duty of privacy and confidentiality. The duty of disclosure requires the arbitrator to disclose matters which might reasonably give rise to justifiable doubts as to his or her impartiality, and a failure to do so is a factor for the fair-minded and informed observer to take into account in assessing whether there is a real possibility of bias, having regard to the facts and circumstances known at the time of the hearing to remove the arbitrator.

Five factors pointed against any finding of bias. First, at the time, it had not been clear that there was a legal duty of disclosure. Secondly, the Transocean arbitrations had commenced several months after the Halliburton arbitration. Thirdly,  in his measured response to Halliburton’s challenge Mr Rokison hadexplained that it was likely the subsequent references would be resolved by a preliminary issue (as they in fact were) and that, if they were not, he would consider resigning from the Transocean arbitrations. Fourthly, there was no question of his having received any secret financial benefit. Fifth, there was no basis for inferring any unconscious ill will on his part.

Ship Operations- New IISTL Book Out

Delighted that our new book “Ship Operations- New Risks, Liabilities and Technologies in the Maritime Sector” has just been released by Informa Law.

This book covers all the major topics associated with ship operations. Part I offers a detailed and critical analysis of issues of contemporary importance concerning new liability regimes and developments. Part 2 discusses how parties, in particular ship operators, attempt in contemporary practice to allocate their risks concerning ship operations by utilizing contractual mechanisms.

Apart from members of the IISTL namely Dr Leloudas, Professors Baughen, Rainey QC, Sozer, Soyer, Tettenborn and Williams, the following excellent authors contributed to this book: Professor Ringbom, Professor Cachard, Mr Macfarlane, Mr Hunter, Associate Professor Stevens, Sir Bernard Eder, Mr Martin and Mr Weale.

The book provides an invaluable guide to recent legal and practical developments and offers a comprehensive, well-informed and thoroughly practical guide on what is a very complex and developing area of law. It will therefore be of great use to legal practitioners and administrators of ship operations worldwide, as well as students in this area and academics associated with maritime law generally.

Understanding TSR and its “curious provision”

Lord Justice Arnold

Giving judgement in the Court of Appeal case Shenzhen Senior Technology Material Co Ltd v Celgard, LLC [2020] EWCA Civ 1293 Lord Justice Arnold has shone a further light on the UK Trade Secrets (Enforcement, etc.) Regulations 2018 (SI 2018/597) [TSR].

Dividing his analysis into pre/post the EU Trade Secrets Directive (EU Dir. 2016/943) Arnold LJ noted, “under English law prior to the implementation of the Trade Secrets Directive, trade secrets constituted a particular category of confidential information. The principal distinguishing characteristic of trade secrets, as opposed to other forms of confidential information, was that a former employee could be restrained from using or disclosing their former employer’s trade secrets after the termination of the employment”. [24]

“The Trade Secrets Directive harmonises the protection against the unlawful acquisition, use and disclosure of trade secrets in the European Union. It is not an exhaustive harmonisation: Article 1(1) provides that Member States may provide for more far-reaching protection than that required by the Directive provided that compliance with a number of provisions of the Directive is ensured. Thus the Directive provides both a floor and a ceiling.”[25]

Moreover, it was noted that whilst TSR might implement the Trade Secrets Directive, it does not transpose Articles 3, 4 or 5 of the Directive.

Turning to the “curious provision” of Regulation 3 Wider Protection, Arnold LJ surmised “… it appears to be primarily intended to ensure that, if and in so far as English law prior to the implementation of the Trade Secrets Directive was more favourable to the trade secret holder…then that greater level of protection shall continue to be available…”.[29]

Conversely it was noted that Regulation 3 does not appear to address the position if the Directive confers greater protection than English law did previously. In such a situation the solution advocated by Arnold LJ would be to interpret and apply TSR consistently with the Directive and again offer the trade secret holder the higher protection.

Despite its somewhat inauspicious start at IPEC it seems clear that our Judges are starting to get to grips with TSR.