No immunity to foreign state-owned airlines, says SC

New Delhi: The Supreme Court has ruled that foreign airlines, even if state-owned, enjoy no immunity from proceedings before consumer fora in India for redressal of grievances relating to deficiency in service.
A bench of Justices Dalveer Bhandari, M K Sharma and A R Dave gave this judgment while deciding that Ethiopian Airlines would be facing proceedings relating to late delivery of a consignment of reactive dyes from Mumbai to Dar-es-Salaam, Tanzania, nearly 20 years ago in September 1992.
In rejecting Ethiopian Airlines' sovereign immunity claim, the bench referred to the Warsaw Pact of 1929 followed by the 1955 Hague Convention relating to international carriage by air as well as the Carriage by Air Act, 1972, passed by both India and Ethiopia.
Writing the judgment for the bench, Justice Bhandari said: “Ethiopian Airlines must be held accountable for the contractual and commercial activities and obligation that it undertakes in India.” “In the modern era, where there is close interconnection between different countries as far as trade, commerce and business are concerned, the principle of sovereign immunity can no longer be absolute in the way that it much earlier was,” the court said.
It said countries which participate in trade, commerce and business with different countries ought to be subjected to normal rules of the market. “If state-owned entities were able to operate with impunity, rule of law would be degraded and international trade and business will come to a grinding halt,” it said.
“Therefore, we have no hesitation in coming to the conclusion that Ethiopian Airlines cannot claim sovereign immunity. The preliminary objection raised by it before the court is devoid of any merit and must be rejected,” the court said asking the state consumer forum to adjudicate the dispute as expeditiously as possible.