4. Beyond Bermuda

First published in N.M. Matte (ed.), International Air Transport: Law, Organisation and Policies for the Future (1970) 81–99. Reproduced by kind permission of the publishers, Institute of Air and Space Law, McGill, Montreal, Canada.

Thirty years after the coming into force on 11 February 1946 of the Air Ser- vices Agreement concluded by the United Kingdom and the United States at Bermuda1 the United Kingdom on 22 June 1976 gave notice to terminate it. Under its Article 13, the Agreement would terminate twelve calendar months thereafter, unless the notice were meanwhile “withdrawn by agreement”.

1 What constitutes the Bermuda Agreement may not be a simple question. At the end of the Conference held at Bermuda, 15 January – 11 February 1946, between the United Kingdom and the United States, there emerged a Final Act, signed by 8 out of the original 10 us delegates who attended the conference, and by 5 of the 6 uk delegates. An Agreement, signed by 6 us and 5 uk delegates, was appended to the Final Act. The Agreement has an Annex which was initialed by the same delegates that had signed the Agreement. Under Article 14 of the Agreement, the Agreement, including the Annex, came into force on the day it was signed. No reference, however, is made in the Final Act to its coming into force. Yet almost all the principal features of what is sometimes called the Bermuda Plan are to be found in the Final Act. These include the provisions on “fair and equal opportunity” (para. 4), primary and supplementary capacity criteria (para. 6), and ex post facto review (para. 9). Until recently, it was assumed without much question that the Final Act, together with its Agreement and An- nex, formed the Bermuda Agreement sensu lato, especially as the entire document appeared in the official publications of treaties on both sides of the Atlantic (in the uk as Treaty Series No. 3 (1946), Cmd. 6747; in the us in 60 Stat. 1499; tias 1507; also in 3 unts 253, text commu- nicated to un by us State Department). But in volume 12 of the authoritative State Depart- ment publication Treaties and other International Agreements of the usa 1776–1949 edited by C.I. Bevans, an Assistant Legal Adviser of the Department, only the Agreement and its Annex are found; the Final Act as such has been omitted (Dept. of State publication 8761, released in 1974; pp. 726–788). Formally speaking, it might well be argued that in law what constitutes the binding international engagement is limited solely to the Agreement proper and its An- nex, and that, while inclusion of the Final Act in the us Statutes at Large and the uk Treaty Series cannot be regarded as decisive in attributing to it binding force, its exclusion in Becans shows conclusively that it is not regarded or no longer regarded, at least by the State De- partment, as binding. However, this view is contradicted by the practice of both contracting States in at least two different ways. First, with the exception of Becans both Governments have, in all utterances and actions relating to the Bermuda Agreement, consistently treated

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In looking into the shape of things to come beyond the Bermuda era, one would do well first to have regard to the origin of the Bermuda Agreement which has over the years become not merely a pattern for most bilateral air services agreements throughout the world, but also a veritable article of faith in the theology of international air transport.2 It all began with the 1944 Chicago Conference on International Civil Avia- tion which strove in vain to bring about, within the Chicago Convention, a multilateral and general exchange, among the contracting States, of the right to fly into and across the territory of one another for aircraft of their registry, and the right for them, where appropriate, to carry passengers, baggage and cargo to or from one another’s territory. In the end, limited agreement was reached on non-scheduled flights,3 primarily because non-scheduled flights were com- mercially of relatively little importance at the time. There was, however, no agreement on scheduled services, the difference of opinion being principally over the amount of fifth freedom to be allowed. This resulted in Article 6 of the Convention which left the exchange of rights for scheduled services to the contracting States themselves, in the drawing up of the separate multilateral International Air Services Transit Agreement and the International Air Trans- port Agreement, and in the formulation of the Chicago Standard Form of bilateral agreements for the provisional exchange of air routes in the Final Act of the Conference.4 There were, at the time, two contending schools of thought: those in favour of Freedom in the Air and those in favour of Order in the Air. The respective

the Final Act as part of the binding agreement. Secondly, in subsequent bilateral agreements concluded by both parties with third States, most of the provisions of the Bermuda Final Act are incorporated in the agreements themselves, which would medicate that both partics intended the principles of the Bermuda Final Act to be binding. Everything considered, the Bermuda Final Act is in reality a legally binding. Memorandum of Understanding. This is not without its irony: for after Bermuda there are many Bermuda-type bilateral air services agreements which, while paying lip service to the Bermuda principles, are accompanied with secret mennoranda of understanding that contradict these principles. Following accepted usage, references in the present paper to the Bermuda Agreement refer, according to the context, either to the whole Final Act, including the Agreement and its Annex, or to the Agreement only. In practice, the provisions of the Final Act, the Agreement and the Annex are easily distinguishable by their being called paragraphs in the Final Act, articles in the Agreement and sections in the Annex. 2 See further B. Cheng, The Late of International Air Transport (1962), p. 229 et seq. 3 Convention on International Civil Aviation, Chicago, 1944, Art. 5. 4 Final Act of the International Civil Aviation Conference, Chicago, 1944, Appendices iii and iv, and Resolution viii.