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Overview: International Civil Aviation Dispute Settlement

Published on : 07 Nov 2019
Author(s):Several

International Civil Aviation Dispute Settlement

Introduction

According to Grotius, “Every nation is free to travel to every other nation and to trade with it”. Nevertheless, the advent of aeronautics has brought with it the accumulation of unresolved disagreements in the global arena and the increase of international tensions. These disagreements have contributed to a sense of instability in the world arena. There is no doubt that the availability of machinery to achieve a non-violent solution to differences is crucial.

Background

Aviation is all activities relating to the mechanical flight and the aircraft industry. Civil aviation refers to non-military flying, general aviation and scheduled air transport. The significance of aviation cannot be understated because all nations connect through aviation. Aviation facilitates trade, travel and the maintenance of links between countries. Aviation has increased the quality of life for many around the world. Aviation triggers a lot of disputes and discontent because it is an integration of economic interests and international prestige.

In the Mavrommatis case, the Permanent Court of International Justice defined dispute as a disagreement on the point of law or fact. A dispute is also characterised by a conflict of legal views or interests between two persons. A dispute is one that is specific and understandable and its subject, concerning a matter of fact, law or policy. When one party to make a claim or an assertion while the other party denies or refuses that claim, a situation of dispute is said to have arisen. The parties to an international dispute can either be governments, institution, jurists or private individuals from different states. The elements of a dispute outlined in the Mavrommatis case must be illustrated through governmental statements, diplomatic notes and other specific actions. In addition, a dispute has to be more than mere disagreement. The disagreement must reach the level of active assertion where the established methods of dispute settlement can be used.
Legal Framework for the Settlement of Disputes

Methods of peaceful settlement can be distinguished between methods used before the Conference on International Civil Aviation 1944 and methods used after that convention.

Prior to the Convention of 1944, three multilateral agreements were signed. These were the Paris Convention of 1909. One principle of this Convention was the recognition that every state has complete sovereignty over the airspace above its territory, as stated by Article 1. Another principle is the freedom of innocent passage of aircraft of contracting States in terms of Article 2. The flying of aircraft may be prohibited over certain areas due to military reasons in Article 3. 

Another multilateral convention is the Madrid Convention of Air Navigation of 1926. In this convention, the Ibero-American Commission was accorded the power to pass upon disputes pertaining to the technical regulations annexed to the agreement between Spain and twenty South American States.

The Havana (Pan American) Convention on Commercial Aviation 1928 made provisions for arbitration. The Bilateral agreements included Greece Poland Agreement of 1931the Hungary- Netherlands Agreement of 1936 and France Hungary Agreement of 1935.

The Chicago Conference of 1944 led to the birth of the Convention on International Civil aviation. Dispute Settlement provisions are set out in Articles 84 to 88 of the Chicago Convention. Article 84 of the Chicago Convention states that the interpretation or application of the Convention and the provisions of the Convention shall on the application of any State concerned in the disagreement, be decided by the Council. According to this provision, no member of the Council shall vote in the consideration if they are a party to the dispute. A party to a dispute can appeal to the International Court of Justice, the decision taken by the ICAO Council. Article 88 states that the ICAO Assembly shall suspend the voting rights in the Assembly and in the Council of any Contracting State that is found to be in default of the provision. This convention is the constitution of international civil aviation. The convention permits parties first to settle their dispute by direct negotiations before the matter is brought to the Council. This allowance is advantageous because the conflict may be resolved before it is even brought to the Council.

The Chicago Convention is supplemented by the Rules of Procedure for the Settlement of Differences. A document named Rules of Procedure for the Settlement of Differences places a priority on mediation and conciliation. Article 14 of the Rules states that any contracting State submitting a dispute to the Council for settlement shall demonstrate that negotiations to settle the dispute have taken place but were not successful. To facilitate negotiations, the Council has the power to designate an individual or group of individuals to act as conciliators between the parties. This shows that Article 84 mandates the Council to assist in settling rather than adjudicating disputes.

The next agreements to be signed were the International Air Services Transit Agreements and the International Air Transport Agreement which were approved by thirty-two states. The freedoms under these agreements are passage without landing and landing for non-traffic purposes. Article 66 of the Chicago Convention has also jurisdiction over the settlement disputes under these two agreements.  The Convention on Damage by Foreign Aircraft to Third Parties on the Surface (ICAO) of 1952 was the inaugural conference on international private air law. The European Civil Aviation Conference of 1954 convened at Strasbourg in 1954 to review the development of intra-European air transport with the object of promoting coordination for better utilisation and orderly development of such air transport.

 The International Civil Aviation Organisation (ICAO) has seven organs they are the Assembly, the Council, the Air Navigation Commission, the Air Transport Committee, the Legal Committee, the Committee on Joint Support of the Air Navigation Services and the Secretariat.

Council adjudicates legal disputes concerning the interpretation and the application of the Chicago Convention. Article 66 of the Chicago Convention has also jurisdiction over the settlement of disputes under the International Air Services Transit Agreement and the International Air Transport Agreement.

Causes of Disputes in International Aviation

There are several causes for conflicts in aeronautics. The causes can be divided into non-commercial and commercial disputes. Non-commercial are those regulated by Bilateral agreements. The Chicago Convention controls commercial disputes. The six common reasons are firstly restrictions in airline marketing, ticket selling and currency remittance. The second common cause is the dumping of air transport services. The third cause is restricted access to travel agents and computer reservation systems. Fourthly, discrimination concerning frequency and capacity and other operating restrictions. Fifthly, discriminatory charges for Air Traffic Control (ATC) and Air Traffic Navigation (ATN). Lastly, ground handling restrictions and unfair taxes.

The first cause occurs where, to protect the local flag carrier, restrictions are placed on airline marketing and selling. Any international air transport provider can increase effective market access, based on transparency and non-discrimination and fair competition. This global air transport provider can also create a safeguard against problems of market distortion and predatory or excessive competition. Market flows determine traffic flows and the government should not be allowed to govern traffic flows.

Recommendation 17 of the First Special Air Transport Conference of ICAO in 1977 provided a solution to the problem of a local flag carrier restricting airline marketing, ticket selling and currency remittance. This recommendation suggested that in "adopting tariff agreements, each airline operating on a route or parts thereof should be given equal opportunity to participate in the carriage of the traffic". At the 1985 ICAO Third Air Transport Conference the delegations violations of “fair and equal opportunity". There were also many Bilateral Air Transport Agreements (BATAs). BATA  sets out six restrictions that countries are to refrain from transgressing. The restrictions noted are, first, that certain users such as governmental authorities and travel agents are not to favour national flag carriers. Secondly, parties are prohibited from introducing limited carrier point to point fares, designed to restrict fifth freedom access. Thirdly that foreign airlines are not to issue their travel documentation, thus delaying and reducing airline revenues. The fourth restriction is that ticket sales to non-residents shall not be made in foreign currencies as this usually increases the cost of travel. Fifthly there must be no condition placed on the issuing of visas that obliges persons to use a national airline. Sixth, restricting the establishment of staffing of offices by foreign airlines is prohibited. The United States “Open Skies” initiative led to the conclusion of a few bilateral agreements.  The Open Skies initiative is an international policy concept that demands the liberalisation of the rules and regulations of the global aviation industry. It is focussed on the commercial aviation industry and creates a free-market environment for the airline industry. An open skies agreement usually provides for free-market competition, pricing determined by market forces, fair and equal opportunity to compete, cooperative marketing arrangements, provisions for dispute settlement and consultation, liberal charter arrangements, safety and security, and lastly freedom of all cargo rights.

Country remittance problems affect a few countries. Some of these countries are Zaire, Brazil, Ghana, India, Nigeria, the Philippines and other countries in Latin America. In 1981, at an annual general meeting of the IATA, there was a resolution requiring member carriers or airlines to persuade their governments to permit foreign airlines to send their net surplus revenue to their home states. This transfer was to be done within thirty days of the application into a freely convertible currency, at the official rate of exchange for the conversion of local currency as the date of submission.

The second cause is the Dumping of Air Transport Services. Dumping refers to selling a product at an export price that is below the normal value of the product in the exporting country. Dumping a method to protect the economic identity of a state. An example of this in the air transport sector is the communist regimes of Eastern Europe. Before the collapse of communism in the region, the communist countries were fruitful ground for such practices. The governments of the communist countries would subsidise their international air industry by supplying the difference between the average value and the export price.  Singapore Airlines was also supported by some firms so that it could provide air transport services in the United States of America at reduced fare prices. The purpose of the subsidies was so that Singapore Airlines could spread out their services at the expense of US airlines. Consequently, US airlines were squeezed out from their routes. Unfortunately, the United States was unable to prevent such predatory pricing. 

The third cause is restricted access to travel agents and computer reservation systems. Computer Reservation Systems are a vital element of marketing in the aviation industry. These systems are useful because they determine air carrier schedules, space availability, tariffs and make reservations for many city-pair combinations. Effective marketing is determined by the listing of their flights on the bias of computer reservation systems. Computer Reservation Systems display bias, unfair or unreasonable restrictions on carrier access, incorrect information or abuse of data is the misuse of the Computer Reservation Systems which occur at international level.

The fourth cause is discrimination concerning frequency and capacity and other operating restrictions.  It would be ideal if the frequency, capacity, route and other traffic rights are made mandatorily available to all states and entities. The universal principles of reciprocity and equal opportunity guide the principles for the freedom of the air. The International Air Transport Agreement and the International Air Transit Agreement introduced the concept of freedom of the sky. States have, however, not adhered to these agreements which creates friction between several countries.

The fifth cause is discriminatory charges for air traffic control (ATC) and Air Traffic Navigation (ATN). According to the ICAO’s Future Air Navigations Systems (FANS) Committee established in 1983 defined Air Traffic Management as a universal concept to be achieved through regional implementation. Several mechanisms provide the incentive for all States to fight discrimination. These are the Advanced Automation System (AM) which encompasses the Automated en-route Air Traffic Control (AERA) as well as the Terminal ATC Automation (TATCA) in concert with the Programme for Harmonised Air Traffic Management (ATM) Research in EUROCONTROL (PHARE). There are no Air Traffic Control charges for foreign air carriers flying through the airspace of the US. 

The sixth cause for international aviation systems is the group handling restrictions and discriminatory taxes. In the aviation industry, there are diverse supplies and services. There are also different authorities and jurisdictions in the industry. Urgent solutions for problems arising from excessive charges and taxes imposed on the aviation industry are needed. ICAO and IATA are the main international civil aviation bodies that are involved in the resolution of problems concerning excessive charges and taxes.

Non-Legal Methods for the Peaceful Settlement of Disputes

There are political methods to settle a dispute peacefully. The three ways to resolve are direct negotiations, good offices and mediation, as well as inquiry and conciliation.

Direct Negotiations refers to a commonly used method of settling an aviation dispute. According to the Chicago Convention, negotiation is the first step in the procedure of dispute resolution. This method has a few notable shortcomings. Parties to negotiation usually demand more than they need, leading to a protracted negotiation process. Despite this, negotiation remains a popular method of dispute settlement. The UN Charter in article 33 (1) states that parties must negotiate prior to invoking the jurisdiction of the UN security council.

Good offices and mediation is a method of settlement that includes a neutral third party. The task of the third party is to support the parties in reaching a successful resolution of the dispute. The impartial third party performs mediation, conciliation and inquiry. The independent third party conducts negotiations with the parties. In terms of Article 14 of the Rules of Procedure for the Settlement of Differences,  ICAO's Council is mandated to allocate good offices for its parties in dispute. 

Inquiry refers to a procedure of investigation. It involves fact-finding, and it was validated by UN Charter Article 33. Article 26 of the Chicago Convention contains the institution of inquiry in the case of an accident. An inquiry is carried out in the state in which an accident happens. The ICAO may recommend an inquiry but does not have the power to perform the investigation itself. Article 55 e grants ICAO investigating power.  The procedure of inquiry is often combined with conciliation. Conciliation is defined as a method for the settlement of international disputes of any nature in terms of which a commission is set up by parties, either permanently or on an ad hoc basis to deal. The dispute proceeds to impartial examination and the Conciliator determines the terms of a settlement susceptible of being accepted by the parties.  The Conciliation Commission was established to assist in settling disputes by the Hague Conventions 1899 and 1907. The Pact of Bogota explains that Commissions of Investigation and Conciliation must be convened by the Council of Organisation of American States. Any party involved in a dispute may request the Council of Organisation of American states to convene the Commission of Investigation and Conciliation.

The political methods to resolve a dispute in an International Aviation are used in conflicts in noncommercial aviation. The political methods are also backed up by diplomacy tactics. However, in the case of commercial disputes, legal methods to dispute resolution are to be applied. The legal methods are arbitration, judicial settlement and advisory opinions of the ICJ.

Legal Methods For Peaceful Dispute Settlement

Arbitration refers to resolving a dispute between states through a legal decision made by an independent, impartial tribunal or certain persons called arbitrators. The parties freely choose the tribunal or arbitrators. Articles 16 and 38 of the Hague Convention of 1809 and 1907 state that that arbitration is one of the most efficient and peaceful means to settle international disputes. The Hague Convention of 1899 outlined the law relating to arbitration and laid the foundations of the Permanent Court of Arbitration.

The case of  United States v, France 1963 was the first aviation case to be resolved by arbitration. The dispute concerned the interpretation of the traffic rights established in 1946 by the United States France Air Transport Services Agreement. In terms of the Agreement, the US flag carrier (TWA – Trans World Airline and Pan Am) were authorised to operate between the US and Near East via Paris granted to the US by France. Pan Am began to fly from the US to Turkey, and then later to Iran via Paris. Because of the agreement France objected to this. Pan Am, however, continued to fly that route and eventually began to fly beyond Beirut to Tehran. France then withdrew its permission. The traffic was directed to France's own flag carrier Air France.  In 1958 France announced an intention to terminate the United States France Air Transport Services Agreement. In 1960 the agreement was approved again. In 1962 France withdrew from the contract again. This led to the Pan Am incurring a significant economic loss. The United States invoked the compulsory arbitration clause under Article X of the Bilateral Agreement. Article X did, however, state that the Tribunal's decision is only advisory. The United States and France then agree that the Tribunal decision is only advisory.

A judicial settlement is a procedure that is closely related to arbitration. The general organ of judicial settlement is the International Court of Justice. While arbitration tribunals are not constituted permanently, the ICJ is a permanent body established by Article 92 of the UN Charter. As a permanent body, the ICJ can develop a continuity of legal outlook. The jurisdiction of the Court is triggered in all legal disputes where parties disagree on the interpretation of a treaty. This jurisdiction is also triggered if there is a question of international law. Furthermore, the presence of any fact which if proven, would constitute an infringement of an obligation in international law also calls for adjudication by the ICJ.

According to Article 65 of the Statute, a court may give an opinion, which is advisory in nature, concerning any kind of legal question. This opinion is given at the request of a body which is authorised to pose the legal question by the UN Charter. According to Article 96,  the Charter names these bodies as the General Assembly, the Security of Council and other organs of the UN and specialised agencies of the UN by the General Assembly to ask for advisory opinions.

There is also treaty agreement of settlement of disputes.  The Charter of the United Nations enumerates in Article 14 of the Charter that the General Assembly is given authority. This authority is subject to the peace enforcement powers of the Security Council. This authorises the General Assembly to recommend measures for the peaceful resolution of any dispute which has the potential to undermine the general welfare or diplomatic relations among them. The Charter of the Organisation of African Unity was signed by 30 states. The Charter has provisions relating to the peaceful solution of international disputes. The European Convention for the Peaceful Settlement of Disputes is modelled on the General Act for the Settlements of Disputes. There is a provision for the judicial settlement of all international legal disputes and conciliation and arbitration of others. The Bilateral Treaties of Commerce and Navigation usually contained clauses on a peaceful settlement. One example of this is the Treaty of Friendship and Commerce and Navigation between the USA and Japan of 1953. Another example is the Treaty of Friendship and Commerce and Navigation between the USA and Ireland of 21 January 1950.

Cases: Peaceful Dispute Settlement

In the Pakistan v India 1971 case, India suspended all Pakistani aircraft overflight over Indian territory. India denied the Jurisdiction of the Council. India then applied to the International Court of Justice which later confirmed the Council's decision. Both parties subsequently entered into negotiations which led to an agreement to discontinue proceedings. In the 1988 case of United States v Cuba, the United States refused for Cuban aircraft to fly over US territory towards Canada. The President of the council then acted as a Conciliator, and conciliation was the method used to settle the dispute. The most recent dispute involves the United States and European Union member states. The issue between the two parties was how an EU directive on the noise of aircraft engines also known was the hush kit Regulations were to be applied. This meant that the United States would be unable to fly older aircraft to Europe. The President of the Council was then appointed as a Conciliator, and the case was settled when the Hush kit regulations were repealed. The parties adopted a Directive that was satisfactory to all.  

International Civil Aviation Dispute Settlement and the UAE

In 2002, the United States and the United Arab Emirates concluded an agreement whereby their carriers would have unrestricted flight rights into either country. However, United States carriers have since alleged that airlines from the Gulf were able to grow at a rapid pace because of government subsidies. This violated the terms of the agreement as it constituted dumping. The UAE’s biggest carriers denied these allegations. The US then decided to institute a series of travel-related restrictions against Gulf airlines.  This sped up the need for Gulf airlines to resolve the dispute.

In March 2018 the US and UAE  completed negotiations about whether Emirates and Etihad could continue to fly to the United States according to the Open Skies accord.  After negotiations, the United States and the United Arab Emirates would be able to operate their airlines as per the original agreements. This is a demonstration of dispute settlement in international civil aviation between two of the largest state with the most international carriers.

Conclusion

International Civil Aviation is a source of disputes in the international arena. Peaceful dispute settlement methods are essential for the resolution of international civil aviation disputes. Negotiation and conciliation are the most popular methods. These methods have provided the necessary machinery for the continuation and growth of the global aviation industry.

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