regulation 261(2004) and its application in italy

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IATA Legal Symposium 2012
5 – 7 February 2012
Shanghai China
Standard Ground
Handling Agreement
LAURA PIERALLINI
STUDIO LEGALE
PIERALLINI E ASSOCIATI
WWW.STUDIOPIERALLINI.IT
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
 The IATA Standard Ground Handling
Agreement: an overview
 The IATA SGHA provides general terms and conditions for optional use of air carriers
and handlers.
 The Aviation Ground Services Agreements Working Group (AGSA WG) publishes new
versions of the SGHA every 5 years following detailed reviews.
 The 2008 version of the SGHA in force, as published in the IATA Airport Handling
Manual (AHM), is currently under review.
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
 The IATA SGHA current main issues

There is a debate whether and, possibly, to what extent some provisions contained in the SGHA
could be changed.

There is growing concerns among airlines and airlines associations of different jurisdictions
about the interpretation of art. 8 of the SGHA, which provides for aircraft damage from ground
handling.

In Italy, the situation is not clear due to the stance taken by some important insurance
companies, according to which art. 8 of the SGHA provides for a total exclusion of
responsibility for damages caused by handlers to air carriers. Moreover, to make things even
worse, two different courts gave two opposite interpretations on that provision, especially as
regards the exclusion of responsibility (as we will summarize better infra).

This is a clearly distort interpretation of art. 8, which may lead air carriers damaged to bear
unreasonable (economic) consequences.
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
 The provisions of Article 8 of the SGHA
Article 8.1 provides for the general principle on legal liability of
handlers;
Article 8.2 sets down the exclusion of responsibility in respect of
damage, death, delay, injury or loss to third parties caused by handlers
and air carriers;
Article 8.3 concerns the exclusion of responsibility with regard to
damages caused by handlers occurred in the phase of loading and
unloading;
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012

Article 8.4 refers to the specular exclusion of responsibility of air
carriers with respect to damages caused to employees or goods of
handlers;

Article 8.5 sets down the exception to that general principle as set
forth in article 8.1;

Article 8.6 concerns specifically cargo, and provides for the
principle according to which handlers shall indemnify the Carrier
against direct loss of or damage to the Carrier’s cargo (excluding
Mail) caused by the negligent act or omission by or on behalf of the
handlers in the provision of the services and/or the supply of goods
under this Agreement provided the limitation indicated therein.
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
Articles 8.1 and 8.5 of the SGHA
Article 8.1 states that
Carrier shall not make any claim against the Handling Company and shall
indemnify it (subject as hereinafter provided) against any legal liability for
claims or suits, including costs and expenses incidental thereto, in
respect of, inter alia:
[…] (d) damage to or loss of property owned or operated by, or on behalf of,
the Carrier and any consequential loss or damage; arising from an
act or omission of the Handling Company in the performance of this
Agreement unless done with intent to cause damage, death, delay, injury or
loss or recklessly and with the knowledge that damage, death, delay, injury
STUDIO LEGALE
or loss would probably result.
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
Article 8.5 states that
Notwithstanding Sub-Article 8.1(d), the Handling Company shall indemnify the
Carrier against any physical loss of or damage to the Carrier’s Aircraft
caused by the Handling Company’s negligent act or omission PROVIDED
ALWAYS THAT the Handling Company’s liability shall be limited to
any such loss of or damage to the Carrier’s Aircraft in an amount not
exceeding the level of deductible under the Carrier’s Hull All Risk
Policy which shall not, in any event, exceed USD 1,500,000 except
that loss or damage in respect of any incident below USD 3,000 shall
not be indemnified.
For the avoidance of doubt, save as expressly stated, this Sub-Article 8.5 does
not affect or prejudice the generality of the provisions of Sub-Article 8.1
including the principle that the Carrier shall not make any claim against
the Handling Company and shall indemnify it against any liability
in respect of any and all consequential loss or damage howsoever
STUDIO LEGALE
arising.
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
The interpretation of articles 8.1(d) and art. 8.5 of the
SGHA in the Italian Case- Law
Italian airport managers and the leading insurance company allege that - pursuant to
articles 8.1 and 8.5 of the SGHA - air carriers would have waived in advance to any and all
actions of civil liabilities, in contract or in tort, against handlers damaging aircraft during
the performance of ground operations.
Such interpretation, according to Italian airport managers and insurance companies,
should be grounded on the allegation that air carriers do generally cause damages to
airport facilities, such as apron or airport ramps as a consequence of “heavy” landings or
landings without landing gear(!) and fingers when approaching the airport station.
The damages allegedly suffered by airport managers would also include costs for handling
passengers’ claims related to damaged and/or lost baggage.
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
As far as the matter above, two judgments have been recently issued: one by the
Civil Court of Bari and the other by the Civil Court of Verona.
The Civil Court of Bari, accepting the interpretation of the airport manager
involved as defendant in such proceedings, deemed as applicable the invoked
limitation/exclusion of liability
The Civil Court of Verona, on the contrary, resolved not to apply any exclusion of
liability and stated the airport manager being liable as a consequence of its gross
negligence in performing handling services which caused damages to the
plaintiff’s aircraft.
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
 The interpretation of art. 8 in other
jurisdictions
In most jurisdictions, the SGHA ensures that any determination of damage to aircraft is
determined by “contract principles” and not by “tort principles.”
In civil law systems, it is not sufficient that contractual damages be the immediate and
direct consequence of the non-performance; they must have been foreseen or foreseeable at
the time that the obligation was contracted unless there is intentional or gross fault.
Such a provision is set forth in the French legal system (art. 1150 code civil), in the Québec
code civil (art. 1613 C.C.Q.), in the Louisiana civil code (art. 1996), in the Italian codice
civile (art. 1225).
An interesting case was tackled in the US jurisdiction. The case can be summarized
asfollow.
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
On January 10, 2005, North American Airlines, Inc. (NAA) filed a complaint against Virgin
Atlantic (Virgin) in the state of New York, claiming liability under common law and
statutory theories of negligence for damages to the NAA aircraft as well as for
consequential damages suffered by NAA.
Both Aircraft Service International, Inc. (ASI) and Virgin were signatories to a Standard
Ground Handling Agreement. NAA argued that Virgin was liable for all of NAA’s damages
resulting from a collision under principles of common law negligence.
NAA contended that ASI and Mach II Maintenance Corporation, (Mach II) were Virgin’s
agents, so Virgin is vicariously liable for the damages they caused.
Here, the Court found that ASI was in some measure responsible for the collision with the
NAA aircraft and is contractually obligated to indemnify Virgin against damage to Virgin
aircraft that resulted from ASI’s negligent operation of the ground support equipment and
thus liable for the actual costs incurred by the damage. However, the court found that ASI
is not liable for consequential damages suffered by Virgin, since the same contract
forecloses that result unless the damages were caused intentionally or recklessly. (N. Am.
Airlines, Inc. v. Virgin Atl. Airways,Ltd., 2006 U.S. Dist. LEXIS 92814.)
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
IATA Legal Symposium 2012 – Shanghai China - 5/7 Febraury 2012
 Final remarks and possible action to be
taken
To conclude, though internationally some associations, like the Airport
Services Association (ASA), argues that the 2008 IATA SGHA should remain
unchanged in the 2013 edition of the SGHA, because any changes to article 8 of
the SGHA would be counterproductive we can uphold that art. 8 should be
changed to make it clearer, especially as concerns a better coordination between
the general principle as set down under its paragraph 1(d) and the exception to it
as provided for under its paragraph 5.
STUDIO LEGALE
PIERALLINI E ASSOCIATI
www.studiopierallini.it
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