Liability of the carrier under Montreal Convention in the case law of Ukraine. Prepared for IATA Liability Report 2013

Liability Reporter 2013

Contribution from the Ukraine

Arseniy Herasymiv, Ilyashev & Partners Law Firm, Ukraine

Moral damages awarded against carrier under Montreal Convention

Individual v Aeroflot [2012] – Panel of Judges in Civil Cases of the High Specialised Court of Ukraine

In the landmark case of Individual v Aeroflot the High Specialised Court of Ukraine overturned the previous decision of the Appeal Court of Kyiv to award the claimant moral damages in a case brought against Aeroflot under the Montreal Convention. Previously, the Ukraine Courts had refused moral damages in disputes under the Montreal Convention.

The claimant purchased a return ticket on board an Aeroflot flight from Kyiv to Berlin. The defendant cancelled the return flight and did not offer an alternative flight to the claimant. As a result the claimant was forced to purchase a ticket on board an International Ukrainian Airlines flight the next day.

The claimant brought an action seeking actual damages in the amount of US$1,200 and moral damages in the amount of US$1,100.

The Court of First Instance awarded the claimant actual damages of US$340, moral damages of US$125 and compensation for the cancellation of the flight in the amount of US$540.

The Appeal Court of Kyiv party overturned the decision of the Court of First Instance in respect of the award of moral damages. Subsequently this decision was overruled by the High Specialised Court of Ukraine.

The Court held that under Article 19 of the Warsaw Convention and Article 19 of the Montreal Convention the carrier is liable for damage occasioned by causing delay to passengers, baggage or cargo. Such liability can be avoided if the carrier can prove that it and its servants and/or agents took all measures that could reasonably be required to avoid the damage, or that it was impossible for the carrier to take such measures. Therefore a passenger has a right to compensation where a delay has occurred. The International Conventions do not specify the type of damage (moral or material) which should be compensated but merely stipulate the limitation sum of any indemnity.

 

No recovery of moral damages for delay

Individuals v Aerosvit [2012] – Appeal Court of the Kyiv region

In Individuals v Aerosvit the Appeal Court of the Kyiv Region overturned the decision at First Instance and denied the claimant compensation other than reimbursement of the ticket.

The claimants had bought tickets on a return flight from Kyiv to New York. On the day of the outbound flight the claimants were informed that the flight had been delayed. The flight was again delayed the following day and beyond due to a failure of the aircraft. As a result the claimants were forced to take a flight with another airline.

The claimants argued that in addition to the extra cost of the alternative flight they had incurred costs for medicine and medical aid due to chronic illness. The claimants sought actual damages of US$951 and moral damages of US$18,750 per passenger.

The defendant airline argued that the delays were caused by technical problems with the aircraft and that under Article 76 of the Rules of Air Carriage the carrier may delay a flight for security reasons. The defendant had already compensated the claimants for the cost of the purchased ticket.

The Court of First Instance awarded the claimants US$830 being the difference between the cost of the original tickets and the replacement tickets.

The Appeal Court held, making reference to the Warsaw Convention and the Rules of Air Carriage, that a carrier may delay a flight for security reasons. Paragraphs 16.3 and 16.4 state that in the event of a delay a passenger has a few options, one being compensation for the purchased ticket. Since the claimants had already obtained such compensation the carrier was not liable for any further damages.

 

No recovery of moral damages for delay

Individual v Aerosvit [2012] – Appeal Court of Kyiv region

The claimant had purchased a ticket for a return flight from Kyiv to Gyandzha. When the claimant arrived at Gyandzha airport she was informed that check-in had closed. The claimant subsequently discovered that the departure time had been changed without her being notified by the defendant. As a result the claimant was forced to get a flight to Moscow and then travel to Kyiv by train.

The claimant sought general damages of US$600, moral damages of US$340 and compensation of US$313.

The defendant argued that the cost of the ticket for the flight from Gyandzha to Kyiv had already been reimbursed to the claimant. This was not denied by the claimant.

The Court of First Instance rejected the claim. The claimant appealed to the Appeal Court of the Kyiv Region where the claim was again rejected.

 

Loss of cargo

Greencarrier Ukraine Ltd v Insurance Company "Brokbusiness" – Commercial Court of Kyiv City

In Greencarrier Ukraine Ltd v Insurance Company "Brokbusiness" the claimant had arranged for a cargo of artificial corundum crystals to be taken to Osaka. The claimant had taken out insurance for the cargo with the defendant company. When the cargo arrived in Osaka it transpired that one out of five pieces of cargo had been lost. On 5 May 2011 the claimant informed the defendant of the incident. Subsequently on 23 May 2011 the Aviation company informed the claimant that they had abandoned the search for the cargo as the 21 day period had expired.

The claimant sought damages in the amount of US$23,000.

The defendant argued that the claimant did not inform the insurer of the incident within the period provided in the contract of insurance.

The claimant argued that the IATA Rules and the Montreal Convention applied which provided a period of 21 days for the search of the cargo.

The Court accepted the defendant's argument and held that the relations between the two parties were grounded in a contract of insurance which determined the period for the notification of the incident and therefore the IATA Rules and the Montreal Convention should not apply.

 

Damage to Baggage

Individual v Aerosvit – Boryspil City-District Court

In Individual v Aerosvit  the claimant had travelled from Orlando to Kyiv but on arrival at Boryspil Airport her baggage could not be located and a complaint was filed to the carrier.

Three days later at Dnipropetrovs'k Airport the claimant retrieved her lost baggage only to find that the bag had been damaged, however no items within the bag had been lost or stolen. The claimant brought an action against the defendant carrier seeking US$182 for the replacement of the bag, US$313 in moral damages and US$377 to cover the court fees.

The defendant argued that at the time the claimant retrieved her baggage at Dnipropetrovs'k Airport no complaint was made in respect of the damage as required by paragraph 4 Chapter XXX, Rules of Air Carriage.

The Court agreed with the defendant and rejected the claim on these grounds. The court went further to state that there was no evidence that the damage to the bag was the fault of the carrier.

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In Open Joint Stock Company “Siberia Airlines” v. Ministry of Defense of Ukraine, State Treasury of Ukraine,413 Siberia Airlines filed claims in the Kiev Commercial Court and with the Ministry of Defense and the State Treasury of Ukraine, seeking to collect from the State (in the person of the Ministry of Defense of Ukraine) damages of USD 6,370,777.39, being the market value of a destroyed Tu-154M aircraft and lost profits arising in connection with the loss of the aircraft.

On October 4, 2001, a warhead was fired from a S-200V ground-to-air missile by the Ministry of Defense of Ukraine during military exercises of air defense troops in 31 Testing Facility of the Black Sea Fleet  of the Russion Federation in the Crimean Peninsula. The missile hit and brought down a Siberia Airlines Tu-154M that was operating a passenger charter flight from Tel Aviv, Israel, to Novosibirsk, Russia. 66 passengers and 12 crew members died.414

Payment of compensation by the state of Ukraine to relatives of the victims was settled by the conclusion of agreements with the states of Israel and Russia. The payment of monies by Ukraine to relatives of those killed in the crash was made voluntarily, without any determination of responsibility at law. The Ministry of Defense of Ukraine argued that the findings of the Aircraft Accidents Investigation Commission did not prove the circumstances of the loss of the aircraft and should not be held determinative of the same by the court. The defendant, the State Treasury of Ukraine, also rejected the claims in full.

The Court found unproven the alleged circumstances of the crash. The court disagreed with plaintiff's arguments that recognition by Ukraine of its involvement in the air crash was confirmed by the intergovernmental agreements entered into with Israel and Russia. By those agreements ex gratia payments were made to family members of deceased nationals. The same did not constitute an admission of liability at law. The payments did not comprise compensation within the meaning of payment of damage to the victims by the entity that committed the offense. The “ex gratia” settlement was not followed by recognition of legal offense and is not to be characterized as compensation, as interpreted by international law. The claim brought by the airline was rejected.

On May, 28, 2012 the Kyiv appeal commercial court upheld the decision of the court of the first instance.

On December, 11, 2012 the Supreme commercial court of Ukraine upheld the decisions of the courts of the first and appeal instances. The court stated that there were no clear evidences that the aircraft was damaged by Ukrainian missile precisely. The expertises provided in the case are based on the assumptions.