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International Civil Aviation Dispute Settlement

"Every nation is free to travel to every other nation and to trade with it." - Grotius ( Mare Liberum, Chp. 1, p. 7)

"Our task over the next few generations is to transform the world of independent states in which we live into some sort of genuine international community. If we succeed in creating that community, however quarrelsome, discontented, and full of injustice it probably will be, then we shall effectively have abolished the ancient institution of warfare. Good riddance." Many areas of relations like political, social, economy etc. are to be dealt with utmost care as they are the goals of modern global society. In the early 1990s we saw the political and economic turbulence, the vector of which is International Civil Aviation. The pile of unsolved controversies and cases in this area has led to the need of creating a proper and efficient dispute settlement mechanism.For example, the Gulf War, political battles in the former USSR and Yugoslavia, along with other changes in the global political and economic environment, is of a great concern to aviation. For these reasons it is obvious that today, more than ever more, maximum efforts should be devoted to induce States to use the available machinery to achieve a non-violent solution to their differences.

As a necessary basis the disputes in civil aviation, their common causes, settlement methods, treaties, ICAO and other organizations have to be studied to count something on the emerging notion of a peaceful international community.

II. Meaning And Major Causes
A. Meaning-

Aviation, or air transport, refers to the activities surrounding mechanical flight and the aircraft industry.Civil aviation includes all non-military flying, both general aviation and scheduled air transport. In common terminology of international aspect, it is one of the medium of transportation without which relations are imaginary. All the states on a global advance are able to connect with each other through aviation. They can trade, travel, and maintain link with each other. But as an integration of economic interests and international prestige aviation triggers a large number of disputes and discontent.

The Permanent Court of International Justice (PCIJ) in theMavrommatisCase has defined dispute as "[a] disagreement on a point of law or a fact. a conflict of legal views or interests between two persons."' Thus, to become a dispute a disagreement has to be specific and understandable and its subject, concerning a matter of fact, law or policy, has to be well-defined. Another element is the claim or assertion of a claim by one party and the refusal or denial by the other party. One can distinguish between various international disputes on the basis of parties involved, government, institutions, jurists or private individuals from different states.

B. Causes-
The advent of aeronautics has broadened the area of conflict between the states and private entities. With respect to sources of such conflicts one can divide them into non- commercial (regulated by bilateral agreements) and commercial (regulated by the Chicago Convention) disputes. The efforts at Chicago Conference to create one international airline and one international authority, failed. It is not surprising given a vast number of unequal participants of international air transport promoting their national interests that the chances of dispute and conflicts will arise.

The causes of these disputes are many and varied and most importantly include:
(a) Restrictions in Airline Marketing, Ticket Selling and Currency Remittance;
(b) Dumping of Air Transport Services (ATS);
(c) Restricted Access to Travel Agents and Computer Reservation Systems (CRS);
(d) Discrimination with Respect to Frequency and Capacity, and other Operating Restrictions;
(e) Discriminatory Charges for Air Traffic Control (ATC) and Air Traffic Navigation (ATN); and
(f) Ground Handling Restrictions and Discriminatory Taxes

(a) Restrictions in Airline Marketing, Ticket Selling and Currency Remittance
International air transport providers can increase effective market access, on the basis of transparency and non-discrimination, under conditions of fair competition with the necessary safeguards against problems of market distortion and predatory or excessive competition. Traffic flows should be driven by market forces and should not be governed principally by government power. Unfortunately, restrictions in airline marketing and selling are often justified as necessary to protect the local flag carrier. In 1977, a solution to this problem was proposed at the First Special Air Transport Conference of ICAO, Recommendation 17. It suggested that "in adopting tariff agreements each airline operating on a route or parts thereof should be given equal opportunity to participate in the carriage of the traffic." A few years later in 1985, at ICAO's Third Air Transport Conference, the violations of ‘fair and equal opportunity' at Chicago Conference were considered and a few restrictions were made.

With the introduction of United States ‘Open skies' initiative (exporting deregulation abroad), a number of bilateral agreements concluded in 1990s for a ‘country of origin' approach or a ‘dual disapproval' method. Many advocates understood ‘open skies' as a prohibition on code sharing and state aid. Due to severe financial loss incurred by aviation industry in the 1990-93 this initiative has been criticized. The same issues were raised by the European Community's (EC) "Comité des Sages.

Currency remittance problems continue to affect a number of countries, including Zaire, Brazil, Ghana, India, Nigeria, the Philippines and the nations of Latin America. Therefore in 1981, at its Annual General Meeting, IATA adopted a resolution, calling upon its member carriers to urge their governments to allow foreign airlines to transfer their "net surplus revenue" to their home States within thirty days of application into a freely convertible currency, at the official rate of exchange for the conversion of local currency as of the date of submission.

(b) Dumping of Air Transport Services (ATS)
To protect the economic identity a state may apply various means and methods. Out of which dumping is common. A product is considered to have been dumped "if its export price is below the normal value of the like product." Before the collapse of the Communist regimes in Eastern Europe, Socialist countries provided a fruitful ground for such practices. Their governments subsidized the dumping margin in air transportation, leveling the difference between the export price and the variable cost of the product of course, the airlines of the former Socialist countries were not the only ones engaged in such practices. Singapore Airlines (SM), for example was supported by a number of firms to operate services to the US with reduced-fare prices. The aim was to spread out their services at the expense of US airlines, who would be squeezed out from their own routes as an outcome of SLA's dumping. The US failed to block such predatory pricing. The Airbus Controversy was also famous in this regard wherein it was seen that the member countries were heavily subsidized by the governments.

(c) Restricted Access to Travel Agents and Computer Reservation Systems (CRS)
CRS are a key element of marketing in the aviation industry. It would be practically impossible without CRS to determine air carrier schedules, space availability, tariffs and make reservations for many city-pair combinations. Successful marketing is directly determined by the listing of their flights on the bias of CRS. The flow of passengers changes through the selection of flights presented by the travel agents. Comparative research shows a pattern of discrimination in choosing flights etc. They display bias, unfair or unreasonable restrictions on carrier access, incorrect information or abuse of information are additional abuses of CRS at the international level.

(d) Discrimination with Respect to Frequency and Capacity, and other Operating Restrictions
In an ideal world the frequency, capacity, route and other traffic rights must be made available to the states and entities on the basis of reciprocity or equal opportunity. To ensure these rights the concept of the "freedom of the air" has been introduced by the "International Air Service Transit Agreement" and the "International Air Transport Agreement". But contrary to the agreement the states acted upon the maximum "to each his own" thus creating friction between several states.

(e) Discriminatory Charges for Air Traffic Control (ATC) and Air Traffic Navigation (ATN)
The Advanced Automation System (AM) including the Automated en route Air Traffic Control (AERA) and the Terminal ATC Automation (TATCA), together with the Programme for Harmonized Air Traffic Management (ATM) Research in EURUCONTROL (PHARE), should provide the impetus for all States to fight discrimination in the sphere of ATC and Am. According to some writers there are no ATC charges for foreign air carriers flying through the airspace of the US. ICAO's Future Air Navigation Systems (FANS) Committee, established in 1983, and defined ATM as a worldwide concept to be achieved through regional implementation. But the aviation sector needed global change, necessary technology was there hence the FANS was established to apply that in right direction which it failed to do.

(f) Ground Handling Restrictions and Discriminatory Taxes
The diversity of supplies and services as well as the different authorities and jurisdictions involved in the airline industry, certainly requires urgent solutions to the problems arising from excessive charges and taxes imposed on the aviation industry. For this reason the major international civil aviation bodies (ICAO and IATA) are involved in the resolution of these problems.

III. Settlement Of Disputes
(1)Methods Of Peaceful Settlement Of Civil Aviation Dispute In International Law:

Various methods of peaceful settlement –
1. Political Methods: The political methods are basically categorized into three ways of settlement namely, direct negotiations, good offices & mediation, and inquiry & conciliation.
Let us analyze these!

Direct Negotiations -
The most frequently employed political method for settlement of aviation disputes is negotiation. As was proposed by the Chicago Convention, negotiation is the first step in the procedure of dispute resolution. Unfortunately, this method has its downside. Participants in negotiations always demand far more than their real needs which inevitably delays the solution. Nevertheless, many disagreements are dealt with through negotiations. Some agreements contain a dispute clause requiring the Parties to engage in direct negotiation. Negotiation is among the means of settlement enumerated in the UN Charter as incumbent upon the Parties prior to invoking the jurisdiction of the Security Council of Article 33(1).

Good offices and mediation
The next available method of settlement of dispute is through good offices provided by a neutral third Party. In that case the third Party supports the parties in a resolution of the dispute, and/or performs inquiry, mediation and conciliation. There are certain advantages of the informal third party dispute resolution like the parties in dispute are not jeopardized by the imposition of decisions upon them. Article 14 of the Rules of Procedure for the Settlement of Differences appoints ICAO's Council to provide good offices for its parties in dispute.

The difference between good offices and mediation is that, whereas the process of good offices consists of calling negotiations between the conflicting States into existence, mediation involves direct conduct of negotiations between the Parties at issue on the basis of proposals made by a mediator. In general mediation is very successful means of dispute resolution; in fact it has been used in non- commercial aviation disputes around the world.

Inquiry and Conciliation-
The procedure of investigation, named inquiry, is often combined with conciliation. The inquiry, or fact-finding as an institution, was recognized by the UN Charter, in its Article 33. The Chicago Convention, in its Article 26, contained the institution of inquiry in the case of accident. The State in which an accident occurs will institute an inquiry, based on ICAO's recommendation. Therefore, ICAO has no power to perform the investigation itself. The Council of ICAO is granted the investigating power under Article 55(e). The case of shooting down of Korean Air Lines flight KE007 is famous in this regard. Furthermore, assistance through Conciliation Commissions for the settlement of international disputes was provided by the Hague Conventions of 1899 and 1907. In addition, the Pact of Bogota provides Commissions of Investigation and Conciliation which must be convened by the Council of Organization of American States at the request of either Party involved in the dispute. Thus conciliation may be defined asa ‘method for the settlement of international disputes of any nature according to which a commission set up by the parties, either on a permanent basis or on an ad hoc basis to deal with a dispute, proceeds to the impartial examination of the dispute and attempts to define the terms of a settlement susceptible of being accepted by them, or of affording the parties, with a view to its settlement, such aid as they may have requested'.

2. Legal Methods: Political means are mostly famous to resolve disputes relating to non – commercial aviation , they are backed up by diplomacy tactics too. But in case of commercial disputes arising out of BATAs the legal means are to be applied. The legal methods can also be divided into three kinds like arbitration, judicial settlement, and advisory opinions of ICJ.

Arbitration – The term ‘arbitration' commonly refers to the determination of difference between states through a legal decision of one or more umpires or a tribunal ( other than a court ) or certain persons designated arbitrators, freely chosen by the parties. It is basically a departure from the prevailing practice of the state that the state shall be the final judge in its own suit. Article 16 of the Hague Convention 1899 and Article 38 of the Hague Convention 1907 reveals that arbitration is one of the most efficacious and peaceful means to settle international disputes. It was in the Hague Convention of 1899 that not only the law relating to arbitration was codified but it also laid the foundations of the Permanent Court of Arbitration.

The United States v France(1963)is the first aeronautical case in history to be resolved by arbitration. The controversy was based on the interpretation of the traffic rights established in 1946, by the United States-France Air Transport Services Agreement. Under the Agreement, the US flag carrier (TWA-Trans World Airline and Pan Am) were authorized to operate between the US and Near East via Paris granted to the US by France. When Pan Am began flying from the US via Paris to Turkey and then to Iran. France objected that under the terms of the Agreement that practice was prohibited. In spite of this objection France permitted Pan Am to continue to fly that route. However, when Pan Am began to fly beyond Beirut to Teheran. France withdrew its permission, instead the traffic was directed to its own flag carrier Air France, in 1958. France announced the termination of the Agreement. In 1960, the Agreement was approved again by an Exchange of Notes to be denounced for the second time. Two years later, in 1962 France withdrew its approval and Pan Am lost a great amount of money. To protect its flag carrier, the US invoked the compulsory arbitration clause under Article X of the Bilateral Agreement. Although according to Article X the Tribunal's decision is only advisory. The Parties agreed through an Exchange of Notes for the decision to be a binding and final arbitration award. Later a series of cases was seen likeUnited States v Italy(1965),United States v France(1978) andBelgium v Ireland(1981).

Judicial settlement- The procedures of judicial settlement and arbitration are closely related; indeed, the former is only a species of the latter. The only general organ of judicial settlement at present available to the international community is International Court of Justice (ICJ). Unlike arbitral tribunals which as a rule are not constituted on a permanent basis, the ICJ is a permanent body. For this reason, it is able to develop a continuity of legal outlook not possible with arbitral tribunals. It was established according to Article 92 of the UN Charter. Article 36, paragraph 2 of the Statute is the so called optional clause whereby a party to the statute may at any time declare that it recognizes as compulsory ipso facto and without special agreement "in relation to any other States accepting the same obligation" the jurisdiction of the Court in all legal disputes concerning:
1.the interpretation of a treaty;
2.any question of International Law;
3.the existence of any fact which, if established, would constitute a breach of an international obligation ; and
4.the nature or extent of the reparation to be made for the breach of an international obligation.

Advisory Opinions of the International Court of Justice –
The jurisdiction of the Court may be advisory. Article 65 of the statute provides that the Court may give an advisory opinion on any legal question at the request of whatever body may be authorized to do so by the UN Charter or in accordance with it. These bodies are, according to Article 96 of the Charter, the General Assembly, the Security Council and other organs of the UN and specialized agencies of the UN authorized by the General Assembly to ask for advisory opinions. ICJ has given decisions and opinions on various controversies e.g., the Permanent Court's advisory opinion on Frontier between Turkey and Iraq; on the Customs Regime between Germany and Austria; on the Nationality Decrees in Tunis and Morocco etc.

Treaty agreement of settlement of disputes-
There are many treaties and agreements for pacific settlement of disputes; to quote a few we can have a look upon the following -
1. The Charter of the United Nations: Under Article 14 of the Charter the General Assembly is given authority, subject to the peace enforcement powers of the Security Council, to recommend measures for peaceful adjustment of any situation which is likely to impair general welfare or friendly relations among them.

2. The Charter of the Organization of African Unity: The OAU Charter, signed at Addis Ababa on 25 May 1963 by the representatives of 30 States is another recent multilateral treaty containing provisions relating to the peaceful solution of international disputes.

3. The European Convention for the Peaceful Settlement of Disputes: It was adopted under the auspices of the Council of Europe and signed on 29 April 1957, is modeled on the General Act for the Settlement of Disputes. It provides for the judicial settlement of "all international legal disputes" and conciliation and arbitration of others.

4. Bilateral Treaties of Commerce and Navigation: General clauses on the peaceful settlement are frequently included in bilateral treaties of friendship, commerce, and navigation. Some are very simple and brief and vary from vague to specific. Relevant examples include The Treaty of Friendship and Commerce and Navigation between USA and Japan of 2 April 1953, Art. XXVI, and the Treaty of Friendship and Commerce and Navigation between USA and Ireland of 21 January 1950.

(2) Methods Of Peaceful Settlement Of Disputes In Civil Aviation Agreements:
The methods of peaceful settlement under civil aviation agreements can be studied in two time aspects like prior to the Conference on Int'l Civil Aviation 1944 and after or post that convention.

Prior to the Convention of 1944-
Various multilateral agreements were signed namely,
(a) Paris Convention of 1909 – Following the World War I, on the initiative of the Govt. of France a conference of thirty eight States was convened in Paris. Some important principles of this convention are –
1. The recognition that every State has complete sovereignty over the airspace above its territory (Art. 1).
2. Freedom of innocent passage of aircraft of contracting States (Art.2).
3. Flying of aircraft may be prohibited over certain areas due to military reasons (Art.3).

(b) The Madrid Convention of Air Navigation 1926- This was signed on 1 November 1926 by Spain and twenty South American States. Major aspect of this was that the Ibero-American Commission was given power to pass upon disputes pertaining to the technical regulations annexed to the convention.

(c) The Havana (Pan American) Convention on Commercial Aviation 1928- The draft was submitted to the sixth Pan American Conference which met in Havana on 1 January 1928. It made provisions for arbitration.
Bilateral agreements included Greece Poland Agreement of 1931, Hungary- Netherlands Agreement of 1936, and France- Hungary Agreement of 1935 etc.

Procedures in force following the Chicago Conference of 1944-
The proceedings of Chicago Conference gave birth to the Convention on International Civil Aviation of 7 December 1944.The dispute settlement provisions are set out in Chapter XVIII (Articles 84 to 88) of the Chicago Convention. The Convention is undoubtedly the most important document produced by the Conference and can be considered as the constitution of international civil aviation. An element of prime importance in the formula adopted by the Chicago Conference is that while it permits the parties first to settle their dispute by direct negotiations before the matter is brought to the Council, the disagreement is no longer allowed to drift along aimlessly while the parties avoid or prolong negotiations.

After this the "two freedoms agreement" was signed by thirty two states on 7 December 1944 called the International Air Services Transit Agreement and the International Air Transport Agreement (ICAO).The two freedoms are passage without landing and landing for non- traffic purposes. Many Joint Financing Agreements in the North Atlantic region were made. The Convention on Damage by Foreign Aircraft to Third Parties on the Surface (ICAO) was the first conference on international private air law held after World War II at Rome fro, 9 September to 7 October 1952. The European Civil Aviation Conference (ECAC) convened at Strasbourg in 1954 to review the development of intra- European air transport with object of promoting coordination, the better utilization, and orderly development of such air transport.

(3)ICAO Machinery For The Settlement Of Disputes
ICAO has 7 organs they are the Assembly, the Council, the Air Navigation Commission, the Air Transport Committee, the Legal Committee, the Committee on Joint Support of the Air Navigation Services and the Secretariat.

The Council can adjudicate legal disputes concerning the interpretation and the application of the Chicago Convention. Since the entry into force of the Chicago Convention, they have been five disputes under Article 84. Apart from its mandate for the settlement of disputes, the Council, by virtue of Article 66 of the Chicago Convention, has also jurisdiction over the settlement of disputes under the International Air Services Transit Agreement18 and the International Air Transport Agreement.

The first dispute occurred in 1952 and was between Indian and Pakistan with respect to the interpretation and application of the Chicago Convention. India made an application before the Council but the dispute was eventually settled by negotiation between the parties. Some disputes referred to ICAO include The Balloon Incident, Jordan and Syria, Israel Complaint under Article 54(j) of the Convention etc.

Critical observation- In theory, when the Council is performing the duties set out under Chapter XVIII of the Chicago Convention, it "must consider itself an international judicial organ and act in accordance with rules of international law governing judicial proceedings". However, it seems that in practice, the Council does not act as impartially and judicially as the statement above suggests. Since the signature of the Chicago Convention in 1944, a number of authors have raised concerns with respect to the judicial functions of the ICAO Council. For example, during the hearing of the second casePakistan v India(1971) a number of Representatives requested the postponement of a vote, in order to seek instructions from their respective administrations. Council Members are appointed by their governments based on their expertise in the field of civil aviation. The Chicago Convention itself only stipulates that no Representative shall be actively associated with the operation of an international air service or have any financial interest in such service. Consequently, the academic and professional background of the representatives is diverse and most of them are not necessarily lawyers by trade nor have exercised any judicial functions prior to their appointment. The ability of the Members of the Council to fully assume their judicial functions and render proper decisions based on the applicable law is therefore questionable.


IV. Conclusion And Recommendations
In a world full of conflicts remember that ‘there is no way to peace, peace is the way'. The world sees a lot of ups and downs from wars to weapons every single state is trying hard to establish their identity and power at the sake of others. In this way several innocent are left barren to even claim their civil and legal rights. Although there had been developments in international law but some of the controversies still remain decided on papers but lingering in heart; same is the case of settlement of civil aviation disputes.

Some of the suggestions or recommendations can be with respect to the attitude of states towards a third party adjudication of aviation disputes. The aeronautical technology has developed but the legal arrangements must also comply with it. When certain members of dispute resolution are directly or indirectly involved in the dispute, the best alternative is to resolve the dispute by simple majority and not to disqualify the concerned members. There should be appropriate application of the appellate mechanism in the ICJ also.

Thus we may conclude that the settlement of international civil aviation disputes is a tributary of the neonate air and space laws making it a less explored nook . The technology is speeding up but the hike in materialistic culture like aircraft, airbus, cargoes etc. are taking time to resonate with the non- materialistic culture viz. relations, rights, legality and above all global peace.

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