Abdul Waheed V. China Eastern Airlines Corporation Limited, a Dispute Over a Contract for the Carriage of Passengers by Air

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Abdul Waheed v. China Eastern Airlines Corporation Limited, A Dispute over a Contract for the Carriage of Passengers by Air

Guiding Case No. 51 (Discussed and Passed by the Adjudication Committee of the Supreme People’s Court Released on April 15, 2015)

CHINA GUIDING CASES PROJECT English Guiding Case (EGC51) November 15, 2015 Edition *

* The citation of this translation of the Guiding Case is: 《阿卜杜勒•瓦希德诉中国东方航空股份有限公司航空旅客运输合同纠纷案》 (Abdul Waheed v. China Eastern Airlines Corporation Limited, A Dispute over a Contract for the Carriage of Passengers by Air ), CHINA GUIDING CASES PROJECT , English Guiding Case (EGC51), Nov. 15, 2015 Edition , available at http://cgc.law.stanford.edu/guiding -cases/guiding -case -51. This document was primarily prepared by Vanessa Cao, Oma Lee, Siqing Li, Thomas Rimmer, Luping Zhang, and Minmin Zhang. The document was finalized by Sean Webb, Jordan Corrente Beck, and Dr. Mei Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings to correspond with those boldfaced in the original Chinese version, was done to make the piece more comprehensible to readers. The following text, otherwise, is a direct translation of the original text and reflects the formatting of the Chinese document released by the Supreme People’s Court. The following Guiding Case was discussed and passed by the Adjudication Committee of the Supreme People’s Court of the People’s Republic of China and was released on April 15, 2015, available at http://www.chinacourt.org/article/detail/2015/04/id/1602394.shtml. See also 《最高人民法院关于发布第十批指导性案例的通知》 (The Supreme People’s Court’s Notice Concerning the Release of the Tenth Batch of Guiding Cases ), Apr. 15, 2015, available at http://www.chinacourt.org/law/detail/2015/04/id/148149.shtml.

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Keywords

Civil Contract for the Carriage of Passengers by Air Flight Delay

Obligation to Inform Liability for the Payment of Compensation

Main Points of the Adjudication

1. With respect to litigation brought against the actual carrier for the carriage of passengers by air, [one] may choose to sue either the actual carrier or the contracting carrier, [or] may sue the actual carrier and the contracting carrier at the same time. Where the carrier who is sued applies to add the other carrier to participate in the litigation, the court may, based on the actual circumstances of the case, decide whether [the application] is approved.

2. When a flight delay is caused by force majeure, resulting in an airline’s inability to carry a passenger transferring to another flight to [his1 final] destination on time, the airline has the obligation to timely and clearly inform the transfer passenger whether [the airline] will provide endorsement 2 service upon [the passenger’s] arrival at the [connecting] destination and, if [the airline] cannot provide endorsement service, [give instructions on] how to handle procedures for [alternate] travel. Where the airline does not perform this obligation and causes losses to the transfer passenger, [the airline] should be liable for compensation.

3. A clause reading “The Ticket Cannot Be Returned or Endorsed” printed on discounted plane tickets by an airline only restricts passengers who purchase discounted plane tickets from returning [their] tickets or [seeking] endorsements [on the tickets] for their own reasons. [The airline] cannot, on the basis of [this clause], deprive passengers of their right to arrive by flight at [their final] destinations on time, which [the passengers] enjoy after they pay the fare.

Related Legal Rule(s)

Article 142 of the General Principles of the Civil Law of the People’s Republic of China

1 Translators’ note: “his” as used herein is gender -neutral terms that may also refer to “her”. 2 Translators’ note: the original text reads “转签 ” (“endorsement”). When a flight is delayed, the carrier may be willing to “endorse” a passenger’s ticket to another carrier whose flights have seats available. See, e.g., U.S. Department of Transportation, Coping With Flight Delays , available at http://airconsumer.ost.dot.gov/publications/delays.htm.

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Article 19, Article 20, and Article 24, Paragraph 1 of the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw in 1929, amended at The Hague in 1955 3

Article VII of the Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other Than the Contracting Carrier 4

Basic Facts of the Case

On December 29, 2004, Abdul Waheed (hereinafter referred to as “Abdul”) purchased a plane ticket, the ticket issuer of which was Cathay Pacific Airways Limited 5 (hereinafter referred to as “Cathay Pacific Airways”) in Hong Kong. The flight arrangements listed on the plane ticket were: Depart for Hong Kong from Shanghai on December 31, 2004 at 11 a.m., [and] depart for Karachi from Hong Kong on the same day at 16:00;6 depart for Hong Kong from Karachi on January 31, 2005, [and] depart for Shanghai from Hong Kong on February 1 of the same year. China Eastern Airlines Corporation Limited 7 (中国东方航空股份有限公司 ) (hereinafter referred to as “China Eastern Airlines”) was the actual carrier of the flights between Shanghai and Hong Kong, [whereas] Cathay Pacific Airways was the actual carrier of the flights between Hong Kong and Karachi. The clauses [printed] on the back of the ticket indicated that

3 Translators’ note: the original text reads “《经 1955 年海牙议定书修订的 1929 年华沙统一国际航空运输一些规则的公约》” (“Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw in 1929, amended at The Hague in 1955 ”). The Convention was prepared in French and does not have an authentic English version. The American Society of International Law refers to the English text available at http://www.jus.uio.no/lm/air.carriage.warsaw.convention.1929/doc.html. See Benchbook on International Law § III.D (Diane Marie Amann ed., 2014), available at www.asil.org/benchbook/airtransport.pdf. In this translation of the Guiding Case, the English text of any provision of this Convention is based on this English version. The Protocol to amend the Convention was signed at The Hague. It has an official English, French, and Spanish text. The version submitted to the Senate of the United States is available at http://www.gpo.gov/fdsys/pkg/CDOC -107tdoc14/html/CDOC -107tdoc14.htm. 4 Translators’ note: the original text reads “《统一非立约承运人所作国际航空运输的某些规则以补充华沙公约的公约》” (“Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other Than the Contracting Carrier ”). For the authentic English text of the Convention , see, e.g., http://www.jus.uio.no/lm/air.carriage.warsaw.convention.guadalajara.supplementary.convention.1961/doc.html#22. 5 Translators’ note: the name “ 国泰航空公司 ” is translated here as “Cathay Pacific Airways Limited” in accordance with the name used on the company’s website, at http://www.cathaypacific.com/cx/en_US.html. 6 Translators’ note: the original text contains inconsistent time formatting, i.e., while a format equivalent to “11 a.m.” is used at the start of this sentence, a format equivalent to “16:00”, instead of “4 p.m.”, is used at the end and throughout. This inconsistency has been retained for completeness. 7 Translators’ note: the name “ 中国东方航空股份有限公司 ” is translated here as “China Eastern Airlines Corporation Limited” in accordance with the name used on the company’s website, at http://us.ceair.com/muovc/newsite/main/en_US/Static_pages/AboutChinaeastern.html.

2015.11.15 Edition the [parties to the carriage] contract should observe the rules and restrictions concerning responsibilities as specified in the Warsaw Convention . The plane ticket was a discounted ticket, on which the clause “The Ticket Cannot Be Returned or Endorsed” was printed.

Beginning from 15:00 on December 30, 2004, there was moderate snowfall at Shanghai Pudong Airport,8 forcing the airport to close for an hour between 22:00 and 23:00 and delaying 104 flights [scheduled for] that day. On the 31 st , for various reasons, including the de -icing of airplanes and the addition and re -scheduling of flights, 43 flights were cancelled, 142 flights were delayed, and the rate of normal [on -time] departure was only 24.1%. China Eastern Airlines Flight MU703 was delayed for 3 hours and 22 minutes because of weather, causing Abdul and his family to miss their Cathay Pacific Airways Karachi -bound connecting flight upon their arrival at the Hong Kong Airport. The staff of China Eastern Airlines informed Abdul that there were only two ways to handle [the situation]: one, Abdul and [his family] could wait for three days at the airport and then take Cathay Pacific Airways’ next flight [to Karachi], paying expenses [incurred] during those three days themselves; two, Abdul and [his family] could use [their] money to purchase tickets from another airline to go to Karachi for HKD 25,000. Abdul immediately made clear that [he] would not accept [either of] these two solutions. His wife Dulin 9 phoned China Eastern Airlines, which told her that relevant staff members were already off work. Dulin could not accept China Eastern Airlines’ handling [of the situation], and this, together with the fact that she was carrying an infant, [made] her anxious and agitated. Finally, after negotiating with the staff of the Hong Kong Airport, Abdul and his family paid HKD 17,000 in total to purchase plane tickets and luggage allowances from Emirates,10 detouring [the weather] by taking the company’s flight to Dubai with [final] arrival in Karachi. For this, Abdul paid HKD 4,721 for [his] airfare and HKD 759 for [his] luggage fare, amounting to HKD 5,480 in total.

Abdul claimed that the delay of the China Eastern Airline flight and [the airline’s] refusal to make new flight arrangements caused him economic losses. Therefore, [he] initiated litigation, demanding that China Eastern Airlines be ordered to pay compensation [in the amount of the cost of his] airfare and luggage fare and to announce regularly to the public the normal [on -time] departure rate of flights and the complaint rate of passengers.

China Eastern Airlines defended its position, claiming that the cause of the flight delay was bad weather, a force majeure. [China Eastern Airlines] had already notified Abdul of this matter and Abdul knew that [he] would miss the connecting flight [departing from] Hong Kong. [Therefore,] [Abdul] had no right to demand that China Eastern Airlines change [his] flight. [In response,] Abdul claimed that he still chose to board the Hong Kong-bound flight knowing that

8 Translators’ note: the name “ 上海浦东机场 ” is translated here as “Shanghai Pudong Airport” in accordance with the name used on the airport’s website, at http://www.shanghaiairport.com/index_pdjc.html. 9 Translators’ note: the original text reads “ 杜琳 ”, which is translated here as “Dulin” in accordance with the pinyin system. 10 Translators’ note: the name “ 阿联酋航空公司 ” is translated here as “Emirates” in accordance with the name used on the company’s website, at http://www.emirates.com/cn/chinese/about/press -room.aspx.

2015.11.15 Edition he would miss the connecting flight because China Eastern Airlines promised that [it] would properly resolve [the problem].

Results of the Adjudication

On December 21, 2005, the Pudong New District People’s Court of Shanghai Municipality rendered the (2005) Pu Min Yi (Min) Chu Zi No. 12164 Civil Judgment:

1. China Eastern Airlines Corporation Limited should, within ten days of the judgment’s coming into effect,11 pay Abdul RMB 5863.60 in total as compensation for [his] losses.

2. [The court] rejects Abdul’s other litigation requests.

After the judgment was pronounced, China Eastern Airlines Corporation Limited appealed. On February 24, 2006, the No. 1 Intermediate People’s Court of Shanghai Municipality rendered the (2006) Hu Yi Zhong Min Yi (Min) Zhong Zi No. 609 Civil Judgment: [the court] rejects the appeal and upholds the original judgment.

Reasons for the Adjudication

In the effective judgment, the court opined: 12 Abdul, the plaintiff, was a citizen of Pakistan. The plane ticket that he purchased [showed] Shanghai as the place of departure and Karachi, Pakistan, as the destination. Article 142, Paragraph 1 of the General Principles of the Civil Law of the People’s Republic of China 13 provides:

The application of law in foreign-related civil relations shall be determined in accordance with the provisions of this chapter.

11 Translators’ note: the original text reads “判决生效 ” (“the judgment comes into effect”). According to Article 155 of the Civil Procedure Law of the People’s Republic of China , judgments and rulings that have come into effect are judgments and rulings of the Supreme People’s Court as well as judgments and rulings which, according to law, may not be appealed or which have not been appealed within the prescribed time limit. See 《中华人民共和国民事诉讼法》 (Civil Procedure Law of the People’s Republic of China ), passed, issued on, and effective as of Apr. 9, 1991, amended two times, most recently on Aug. 31, 2012, effective as of Jan. 1, 2013, available at http://www.gov.cn/flfg/2012 -09/01/content_2214662.htm . 12 Translators’ note: the Chinese text does not specify which court opined. Given the context, this should be the No. 1 Intermediate People’s Court of Shanghai Municipality. 13 《中华人民共和国民法通则》 (General Principles of the Civil Law of the People’s Republic of China ), passed and issued on Apr. 12, 1986, effective as of Jan. 1, 1987, amended on and effective as of Aug. 27, 2009, available at http://www.npc.gov.cn/npc/lfzt/rlys/2014 -10/28/content_1883354.htm .

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[Article 142,] Paragraph 2 states:

If an international treaty concluded or acceded to by the People’s Republic of China has provisions that are different from those in the civil laws of the People’s Republic of China, the provisions of the international treaty shall apply, unless the provisions are those on which the People’s Republic of China has announced reservations.

China 14 and Pakistan are contracting parties to the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw in 1929, amended at The Hague in 1955 (hereinafter referred to as the “ Warsaw Convention as amended at The Hague in 1955 ”) and the 1961 Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other Than the Contracting Carrier (hereinafter referred to as the “ Guadalajara Convention ”). Thus, the two international conventions were applicable in this case. Article 28, Paragraph 1 15 of the Warsaw Convention as amended at The Hague in 1955 states:

An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the Court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the Court having jurisdiction at the place of destination.

Article 32 states:

Any clause contained in the contract and all special agreements entered into before the damage occurred by which the parties purport to infringe the rules laid down by this Convention, whether by deciding the law to be applied, or by altering the rules as to jurisdiction, shall be null and void.

Based on [these provisions], since Abdul sued [while] holding the plane ticket, the Pudong New District People’s Court of Shanghai Municipality, the People’s Republic of China, ha d jurisdiction [to handle] this dispute over a contract of international carriage of passengers by air.

14 Translators’ note: the original text reads “ 我国 ” (“my country”) and is translated throughout this Guiding Case as “China”. 15 Translators’ note: the original format uses the format “ 第二十八条（ 1）款 ” (“Article 28, Paragraph (1)”) as the cited provision, however “Article 28, Paragraph 1” is likely what is meant, as this aligns with the formatting of the convention.

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Article I, Paragraph (b) 16 of the Guadalajara Convention provides:

“[C]ontracting carrier” means a person who as a principal makes an agreement for carriage governed by the Warsaw Convention with a passenger or consignor or with a person acting on behalf of the passenger or consignor.

[Article I,] Paragraph (c) provides:

“[A]ctual carrier” means a person other than the contracting carrier, who, by virtue of authority from the contracting carrier, performs the whole or part of the carriage contemplated in paragraph (b) but who is not with respect to such part a successive carrier within the meaning of the Warsaw Convention . Such authority is presumed in the absence of proof to the contrary.

Article VII states:

In relation to the carriage performed by the actual carrier, an action for damages may be brought, at the option of the plaintiff, against that carrier or the contracting carrier, or against both together or separately. If the action is brought against only one of those carriers, that carrier shall have the right to require the other carrier to be joined in the proceedings, the procedure and effects being governed by the law of the court seised of the case.

The plane ticket held by Abdul was issued by Cathay Pacific Airways. Therefore , a contractual relationship for the international carriage of passengers by air was established between Abdul and Cathay Pacific Airways with Cathay Pacific Airways as the contracting carrier. There was no direct contractual relationship for the international carriage of passengers by air between China Eastern Airlines and Abdul, nor was China Eastern Airlines a successive carrier. [China Eastern Airlines] was only the actual carrier, whose [responsibility] was derived from Cathay Pacific Airways’ authorization to complete carriage from Shanghai to Hong Kong, as confirmed by the ticket [held by Abdul].

Abdul had the right to initiate litigation against Cathay Pacific Airways, China Eastern Airlines, or both at the same time as defendant(s). Abdul chose to initiate litigation listing only China Eastern Airlines as defendant, and although China Eastern Airlines had the right to demand that Cathay Pacific Airways participate in the litigation, it was not necessary to add Cathay Pacific Airways as a party to participate in the litigation , given the circumstances of the case and considering the litigation costs. This was because the liability for the flight delay that Abdul pursued occurred during the flight from Shanghai to Hong Kong, with carriage provided by China Eastern Airlines, unrelated to [the operation of] Cathay Pacific Airways . Therefore, although China Eastern Airlines had the right to apply to include Cathay Pacific Airways in the

16 Translators’ note: the original text lists “ 第一条第二款 ” (“Article 1, Paragraph 2”) as the cited provision, however “Article I, Paragraph (b)” is likely the section meant, as this aligns with the quoted language.

2015.11.15 Edition litigation, whether or not this type of application was approved should be decided by the court that accepted this case. The court of first instance opined that Cathay Pacific Airways had no part in the flight delay for which Abdul pursued liability and, based on various circumstances, including the convenience [enjoyed by] the passenger in this case to protect [his] rights, the [low] possibility of [Cathay Pacific Airways] being found liable, and litigation costs, decided to not add Hong Kong’s Cathay Pacific Airways as a party to this case. [The court of first instance’s decision] was not improper.

Article 19 of the Warsaw Convention as amended at The Hague in 1955 provides:

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, luggage or goods.

Article 20, Paragraph 1 provides:

The carrier is not liable if he proves that he and his agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures.

Flight MU703 on December 31, 2004 was delayed because of weather. It was not possible for China Eastern Airlines to take measures to avoid the occurrence of this kind of force majeure delay and thus [China Eastern Airlines] was not liable for the delay itself. However, [China Eastern Airlines] still had to prove that it had taken all necessary measures to avoid the occurrence of losses to the passenger caused by the delay, otherwise it would be liable for the losses suffered by the passenger due to the delay.

Since Abdul had foreseen that Flight MU703’s delay would cause him to miss Cathay Pacific Airways’ connecting flight while [still] at Pudong Airport, he asked China Eastern Airlines’ staff multiple times what he should do. China Eastern Airlines should have known that Cathay Pacific Airways had only one connecting flight from Hong Kong to Karachi every three days. China Eastern Airlines also clearly knew that Abdul and his family were carrying an infant and [thus] it was not convenient for [them] to wait at the connecting airport for a long time. [Therefore, China Eastern Airlines] had an obligation to remind Abdul and his family of the adverse circumstances that might occur during the transfer and advise [them] to fly at a later date.

However, China Eastern Airlines did not do this. Instead, [the airline] let Abdul fill out the Flight Continuance Situation Registration Form and told [him] that it would help solve [the problem], causing Abdul to reasonably rely on the company[’s assurances]. [Abdul], therefore, boarded the Hong Kong-bound plane, feeling at ease [that everything would be fine]. Abdul and his family came to Hong Kong after obtaining China Eastern Airlines’ promise to help. China Eastern Airlines, however, did not consider the reasonable need of Abdul and his family, carrying an infant, to fly to Karachi as soon as possible. [China Eastern Airlines merely] notified Abdul [that he had] to either wait three days to take the next flight [to Karachi] and be

2015.11.15 Edition responsible for all related expenses [incurred] during these three days or [resort to] the “help- solve” method 17 of purchasing a ticket from another airline at his own expense.

According to the facts ascertained [by the court], China Eastern Airlines was not able to provide [as evidence] the Flight Continuance Situation Registration Form completed by Dulin, Abdul’s wife, before she boarded [the Hong Kong -bound plane]. [The airline] could not prove that Abdul still chose to board the plane even though he was aware of the adverse circumstances that [would] occur after he flew to Hong Kong. Therefore, the court’s determination that “China Eastern Airlines did not take the necessary measures to avoid losses” was correct. China Eastern Airlines had not taken all the necessary measures to avoid the occurrence of losses to the passenger due to the flight delay, and thus should not be exempt from liability. Compelled by a sense of helplessness, Abdul purchased a ticket from another airline. China Eastern Airlines should be liable for Abdul’s loss [in the amount] of the HKD 5480 that [he] paid to purchase the ticket.

After the delayed flight arrived at the Hong Kong Airport, China Eastern Airlines refused to endorse the plane ticket for Abdul. [The airline] alleged that Abdul’s plane ticket was a discounted ticket with [the clause] “The Ticket Cannot Be Returned or Endorsed” printed on it, and thus [the airline] did not need to further remind or inform [Abdul].

The court opined: even if an airline includes the clause “The Ticket Cannot Be Returned or Endorsed” on discounted plane tickets, this only restricts passengers who purchase discounted plane tickets from returning [their] tickets or [seeking] endorsements [on the tickets] for their own reasons. For passengers who purchase discounted plane tickets, airlines may cancel some services accordingly. But for passengers who pay full fare, an airline must provide complete carriage services, and cannot, on the basis of [this clause], deprive passengers of their right to arrive by flight at [their final] destinations on time, which [the passengers] enjoy after they pay the fare.

The flight delay in this case was not caused by Abdul’s personal reasons. Upon his arrival at the Hong Kong Airport on the delayed flight, Abdul definitely needed an endorsement on [his] ticket. [Despite this knowledge,] China Eastern Airlines not only failed to notify Abdul of the reason for not endorsing [his] ticket at the airport of original departure when the flight was delayed, but also refused to handle the endorsement procedures for him at the connecting airport. Consequently, China Eastern Airlines was unable to provide evidence to prove that the occurrence of the losses was caused by Abdul’s personal reasons, nor was it able to prove that it took the necessary steps and proper remedial measures to avoid increasing the losses. [The court], therefore, ordered China Eastern Airlines to bear the liability for compensation.

17 Translators’ note: the original text reads “‘ 帮助解决 ’ 方案 ”, translated here as the “‘help -solve’ method”. This refers generally to assisting in finding a solution to a problem.