Recent Judicial Restatement On Jurisdiction And The Utility Of Exclusionary Clauses In Contracts Of Carriage Of Passengers By Air

by Olaoye Olalere

Introduction

Jurisdiction is said to be the life wire of any judicial adjudication. Without requisite jurisdiction, the court would have gone on a voyage of nullity no matter how well conducted its proceedings might have been.¹ It is thus a relevant question to ask: which court, between the Federal High Court and the State High Court in Nigeria, has jurisdiction to entertain disputes on breach of a contract of carriage of goods and passengers by air?

In a related vein, some contractual terms are basic and fundamental to the fulfilment of contractual obligations, yet their breach keeps reoccurring in dispute resolution proceedings. In drafting contractual agreements, the business community generally keeps devising different methods to limit or avoid contractual liability. Consequently, attaining balance in the allocation of risks, responsibilities and rights in business contracts becomes difficult as the offeror and offeree are never on the same level. An exclusionary clause is a devise usually employed in this process, and when a dispute arises, the court as an arbiter is often called upon to adjudicate on the utility of such exclusionary clauses. The Aviation industry is well-known for the use of exclusionary contractual clause provisions which are always included by the carriers in the contract of carriage by air issued to passengers at the time of booking their flight tickets.

The issue of jurisdiction along with the question of whether the exclusionary clause avails a carrier, which has breached the fundamental terms of a contract of carriage by air, came to the fore again and were decided upon in a recent case conducted by this writer.² Drawing from the experience in the said case, this article answers the twin questions of: (i) which court, between the Federal High Court and the State High Court in Nigeria, has jurisdiction to entertain disputes on breach of a contract of carriage of passengers? and (ii) what is the utility of an exclusionary clause in a contract of carriage of passengers by air?

Facts of the Recent Case

The Plaintiffs entered into a contract of carriage of passengers by air with the Defendants, in which they agreed to convey the Plaintiffs on Flight No. KP 25 by air from Lagos to Newark, New Jersey, United States of America via Lome Togo on 24^th July 2016. The flight time was moved on the departure date from 12:10pm to 11:00am without prior notice to the Plaintiffs, and the Plaintiffs were not allowed to board when they arrived the airport. The Plaintiffs’ case is that the Defendants breached the contract of carriage by air between them when:

1. they overbooked and rescheduled the departure time for Flight No. KP 25 on 24^th July 2016 from 12.10pm to 11.00am without prior notification to the Plaintiffs;
2. they refused to allow the Plaintiffs check-in and board the flight;
3. their staff member acted maliciously, discriminatorily and recklessly against the Plaintiffs, despite the breaches of the contracts of carriage between them and the Plaintiffs, and insisted that the Plaintiffs must pay an additional sum of money (and indeed collected additional money from the Plaintiffs) before booking the Plaintiffs on the next available flight to Newark, New Jersey, United States of America due to depart on Tuesday 26^th July 2016.

On the other hand, the Defendants’ narrative was that an announcement was made and displayed on the screen at the airport to all the passengers on the ground about the change of departure time of the flight upon receiving information of imminent bad weather from Lome. They contended that due to the imminent bad weather and other operational/technical reasons and to avoid cancellation of the flight, they adjusted the time, boarded and airlifted all the passengers on the ground at the airport. They claimed that the Plaintiffs got to the airport late and did not check in earlier before the close of the counter. The Defendants claimed that the Plaintiffs were informed that they could not board, and they voluntarily paid additional money to be booked for the next available flight, which amount has been refunded without prejudice.

Jurisdictional Arguments and the Decision of the Court thereon

The Defendants raised a jurisdictional issue in their final written address. They anchored the challenge of the Court’s jurisdiction on the fact that the claim of the Plaintiffs was based on denial of boarding and argued that as there was no embarkation or disembarkation from the aircraft, the Plaintiffs’ suit falls outside the aviation disputes that the Federal High Court could adjudicate upon. They described the suit as a simple contract claim, and contended it was not a contract of carriage of passengers by air, and submitted that the case falls within the jurisdiction of the State High Court. They relied heavily on the provisions of the Civil Aviation Act 2006, the Montreal Convention 1999 and the 2014 Court of Appeal decision in the case of KLM Royal Dutch Airlines v. Taher³inter alia.

In response and to prove that the denial of boarding is an aviation dispute that the Federal High Court has jurisdiction to decide, the Plaintiffs relied on the Supreme Court case of Harka Air Services (Nig.) Ltd. v. Keazor⁴which outlined Delayed or denied boarding as parts of the claims which may arise from an aviation dispute, and a more recent (2017) decision of the Court of Appeal in Air France v. Majasan⁵in which the claim for refund of air ticket was held to be an aviation dispute falling within the jurisdiction of the Federal High Court. In that case the Court of Appeal relied on the combination of the provisions of Section 7(1)(k) of the Federal High Court Act, and of Section 251(1)(k) of the 1999 Constitution of the Federal Republic of Nigeria, as amended, and held that the Court with jurisdiction to entertain complaints over a contract falling under aviation matters is the Federal High Court.

In its decision in the present case also, the trial court rightly held that the suit falls within the aviation dispute that the Federal High Court alone can entertain. The court relied on section 251 (1) (a-s) of the 1999 Constitution, section 7 (1), (3) and (5) of the Federal High Court Act and the case of Awawu Otulu Otoahia v. Aero Contractors Nig. Ltd⁶in holding conclusively that once a matter relates to aviation, safety of aircraft and carriage of passengers and/or goods, the Federal High Court is clothed with jurisdiction to entertain such matter.

Defendants’ Reliance on Exclusionary Clause and the Court’s Decision

The Defendants relied upon the exclusionary clause in the contract of carriage which provides that they can change the time of departure of the flight at any time. In response, the Plaintiffs contended that having breached the fundamental terms of the contract of carriage of passengers by air by denying the Plaintiffs boarding on that day, the Defendants cannot rely on the exclusionary clause in the contract.

The trial Court agreed with the Plaintiffs that denial of boarding was a fundamental breach of a fundamental terms of the contract of carriage of passengers by air and the court would not allow the Defendants to hide under such clause to avoid performing its fundamental obligation under the contract. Relying on the case of Mekwunye v. Emirates Airlines,⁷ the court found and held that the Defendants unilaterally changed the scheduled time of departure of the flight without prior notice to the Plaintiffs and breached the fundament terms of the contract by denying the Plaintiffs boarding of the flight, a failure to meet the consideration of the contract. Thus, it was further held that even the Montreal Convention would not provide cover for a carrier in cases where they deny boarding to a passenger. The court also found and held that the Defendants misconducted themselves when they requested and collected additional payment from the Plaintiffs before booking them for the next flight. Having found as above in favour of the Plaintiffs, the court neither sanctioned the Defendants’ refusal to carry out the fundamental term of their contractual obligation nor allowed the attempt to rely on exclusionary clause to escape liability, as the court granted most of the Plaintiffs’ reliefs in the suit.

Commentary and Conclusion

It is this author’s view that by this decision, the perceived dichotomy that the 2014 decision of the Court of Appeal in KLM Royal Dutch Airlines v. Taher⁸ had sought to create as to which court between the Federal High Court and the State High Court, has jurisdiction to entertain aviation disputes has been laid to rest and the law restated. By the combined effect of the provisions of Section 7(1)(k) of the Federal High Court Act, and of Section 251(1)(k) of the 1999 Constitution of the Federal Republic of Nigeria, as amended and the decisions of the Apex Court, the Court with exclusive jurisdiction to entertain complaints over a contract falling under aviation disputes is the Federal High Court. The attempt to categorize some aviation disputes as simple contracts in respect of which any dispute arising therefrom can be entertained by the State High Court has not received judicial imprimatur. Any dispute arising from a contract of aviation or connected with or in addition to an aviation contract, is an aviation dispute and such dispute should go to the Federal High Court for adjudication. Dispute resolution lawyers should not continue to seek to create non-existent dichotomy between the jurisdiction of the Federal High Court and the State High Court on questions arising under Section 251(1) of the 1999 Constitution of the Federal Republic of Nigeria. Our judges too, should avoid opening the window for such window-shopping expeditions by the litigants and their lawyers alike.

This suit also reiterates and restated the well-known position of the law that a party who has breached the fundamental term of a contract cannot hide under an exclusionary clause to avoid the implications of its breach. The court will not lend its support to such a party. We note that contracts for carriage of passengers and goods by air usually contain wide exclusionary clauses to avoid the implications of the strict liability nature of the claims in the industry. Notwithstanding this, it is very important that the carriers must carry out their fundamental responsibilities under a contract of aviation, and not wait to rely on exclusionary clauses alone.

Footnotes

1. See the case of The Chief of Air Staff & Ors v. Wing Commander P. E. Iyen (2005) LPELR-3167(SC).

2. Suit No. FHC/L/CS/240/2017 – Mrs. Andrea Ajibade & Ors v. Ethiopian Airlines & Anor decided on 16^th May 2023.

3. (2014) 3 NWLR (Part. 1393) at 137.

4. (2011) LPELR-1353(SC), at pp. 27 – 29; paras F – F.

5. (2017) LPELR-43500(CA).

6. (2014) LPELR 23319.

7. (2019) LPELR- 46553(SC).

8. (2014) 3 NWLR (Part. 1393) at 137.

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