British Airways Plc and Another v Sindicato Espanol de Pilotos de Lineas Aereas and Another [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Field J. |
| Judgment Date | 20 June 2013 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 20 June 2013 |
Queen's Bench Division (Commercial Court).
Field J.
James Flynn QC, Nicholas Yell and Richard Blakeley (instructed by Bufete Alexander Pitts) for the first defendant.
Hugh Mercer QC and Iain Quirk (instructed by Baker & McKenzie LLP) for the claimants.
The second defendant did not appear and was not represented.
The following cases were referred to in the judgment:
Apostolides v OramsECAS (Case C-420/07) [2009] ECR I-3571.
Danmarks Rederiforening v LO Landsorganisationen i Sverige (The Tor Caledonia)ECAS (Case C-18/02) [2004] ECR I-1417; [2004] All ER (EC) 845.
Fra.bo SpA v Deutsche Vereinigung des Gas-und Wasserfaches eV (DVGW) -
Technisch-Wissenschaftlicher VereinECAS (Case C-171/11) [2012] 3 CMLR 38.
Frahuil SA v Assitalia SpAECAS (Case C-265/02) [2004] ECR I-1543.
Freistaat Bayern v BlijdensteinECAS (Case C-433/01) [2004] ECR I-981.
Gemeente Steenbergen v BatenECAS (Case C-271/00) [2002] ECR I-10489.
ITF and Finnish Seamen's Union v Viking Line ABP and OÜ Viking Line Eesti [2007] ECR I-10779.
Owusu v Jackson [2005] 1 CLC 246; [2005] ECR I-1383.
Préservatrice Fonciere TIARD SA v Staat der NederlandenECAS (Case C-266/01) [2003] ECR I-4867.
Sonntag v WaidmannECAS (Case C-172/91) [1993] ECR I-1963.
Viking Line ABP v International Transport Workers FederationUNK [2005] EWHC 1222 (Comm); [2005] 1 CLC 951; [2005] 3 CMLR 29.
Jurisdiction — Conflict of laws — Collective action — Strikes — Defendant Spanish trade union of airline pilots — Claimant airlines” intention to launch new low-cost airline in Spain — Claim for damages and declaratory and injunctive relief alleging that pilots” strikes organised by defendant unlawful under Spanish law as in breach of claimants” right to freedom of establishment and to provide cross-border services — Claimants” claims not “civil and commercial” matters — Enforcement of relevant treaty obligations matter of public law — English court had no jurisdiction — Regulation 44/2001, art. 5(3), 6 — Treaty on Functioning of European Union (TFEU), art. 49, 56.
This was an application by the defendant Spanish trade union (SEPLA) challenging the jurisdiction of the English court under Regulation 44/2001.
The claimants proposed launching a new lost-cost airline in Spain. SEPLA, which represented Spanish airline pilots, was hostile to the proposal and took strike action. The second defendant (IFALPA), a federation of airline pilots of which SEPLA was a member, asked its members to take supporting action. Proceedings were brought in Spain which the Spanish Cabinet referred to compulsory arbitration. The claimants brought English proceedings for damages and declaratory and injunctive relief alleging that the strikes of Spanish airline pilots organised by SEPLA were unlawful under Spanish law in that they were in breach of the claimants' right to freedom of establishment and to provide cross-border services under art. 49 and 56 of the Treaty on the Functioning of the European Union (TFEU).
The claimants contended that the court had jurisdiction over its claims against SEPLA under art. 6 of Regulation 44/2001 on the basis that IFALPA was domiciled in England at the time the claim form was issued and the claims against SEPLA and IFALPA were so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. The claimants also contended that the court had jurisdiction under art. 5.3 on the ground that harm caused by the strikes was suffered by both claimants within the jurisdiction.
SEPLA submitted that the claims against it based on art. 49 and 56 were public law claims and not “civil and commercial matters” within art. 1 of the Regulation.
Held, ruling accordingly:
SEPLA's contention that the claimants' claims were not “civil and commercial” matters within the Regulation was well founded. The prohibitions on restrictions on the freedoms of establishment and the provision of services within the EU expressed in art. 49 and 56 TFEU imported treaty obligations laid upon the member states, with the result that the enforcement of those obligations was not a civil or commercial matter but one involving the application of public law. Trade unions had been held to be subject to the obligation to maintain the fundamental freedoms enshrined in the EC predecessors to art. 49 and 56, but that was because for that purpose they were deemed to be emanations of the state. It was extremely difficult to conceive of circumstances where a private individual's acts could constitute a breach of the rights of establishment and free movement of services and SEPLA's obligations to respect the art. 49 and 56 freedoms were exorbitant to the obligations to which it was subject as a matter of ordinary private law. A court having to decide whether SEPLA was in breach of art. 49 and/or 56 would have to weigh SEPLA's constitutional right to strike and the right to strike which formed part of the general principles of Community law against the fundamental freedoms enshrined in art. 49 and 56. Such an exercise would involve a resort to notions of public law rather than to private law. It followed that the English court did not have jurisdiction under the Regulation to determine the claimants” claims. If some other basis of jurisdiction had been relied on, the court would have declined jurisdiction as a matter of discretion, since it was wholly inappropriate for an English court to pronounce on the lawfulness under Spanish law of calls for strike action in Spain by a Spanish trade union and where compulsory arbitration had been lawfully ordered by the Spanish government. (Fra.bo SpA v Deutsche Vereinigung des Gas-und Wasserfaches eV (DVGW) — Technisch-Wissenschaftlicher VereinECAS(Case C-171/11) [2012] 3 CMLR 38andITF and Finnish Seamen's Union v Viking Line ABP and OÜ Viking Line Eesti[2007] ECR I-10779considered.)
Field J:
1. The question to be decided on this application is whether the court has jurisdiction under EC Regulation 44/2001 (“the Regulation”) to determine the claim brought by the claimants against the first defendant (“SEPLA”), a Spanish trade union, for damages and declaratory and injunctive relief alleging that strikes of Spanish airline pilots organised by the first defendant were unlawful under Spanish law in that they were in breach of the claimants” right to freedom of establishment and to provide cross border services under articles 49 and 56 of the Treaty on the Functioning of the European Union (“TFEU”).
2. The second claimant (“IAG”) is the parent company of the first claimant (“BA”) and Iberia Airlines (“Iberia”). It was formed in January 2011 upon the merger of BA and Iberia. IAG is a Spanish registered company, but its shares are traded on the London Stock Exchange as well as on the Spanish Stock Exchange. Its corporate head office and principal place of business are in London. It is responsible for the management of the combined group including the delivery of a joint business and merger synergy plan. The rest of the operational activities of the group are carried out by the operating companies, Iberia in Spain and BA in London.
3. SEPLA is an independent Spanish trade union of Spanish airline pilots which was founded in 1978. It is registered as such with the Spanish Ministry of Employment and has its seat at Madrid, Spain. It has no establishment, office or other presence in the UK. Under article 28.2 of the Spanish Constitution, the right to strike is an employee's fundamental right. As such it prevails over the right to work provided for in article 35.1 of the Constitution.
4. As its name suggests, the second defendant (“IFALPA”) is a federation of airline pilots associations of which SEPLA is a member. It appears that IFALPA has been domiciled in Montreal, PQ, Canada since January 2013 but there is a good arguable case that it was domiciled within the jurisdiction at the time when the claim form was issued on 16 November 2012.
5. In October 2011, IAG announced the intention of launching a new low-cost airline, Iberia Express. Whilst Iberia's long haul business had been profitable, its domestic (short haul) and European (medium haul) businesses had been historically unprofitable. The claimants contend that this had been due to two main factors: (i) competition from low-cost airlines such as Ryanair and Easyjet and from high-speed rail services; and (ii) the high cost of pilots and cabin crew. The plan was that Iberia Express would hire new pilots and crew at competitive market rates significantly lower than those paid to pilots and crew under current Iberia collective agreements. In IAG's estimation, without new competitive rates of pay for short and medium haul flights, Iberia would continue to make substantial losses on these sectors of its business.
6. IAG offered guarantees to SEPLA and its pilot members that there would be no job losses at Iberia but this did not neutralise SEPLA's hostility to Iberia Express employing pilots and cabin crew on less favourable terms than those enjoyed by its members employed by Iberia. In December 2011 and January and February 2012, pilots employed by Iberia went on strike at the urging of SEPLA and SEPLA called for further strikes in March, April and May 2012. In the event, the strikes planned for March and early April 2012 did not go ahead and the remaining strikes were called off on 27 April 2012. Overall, the pilots were on strike for 18 days in the period December 2011 to 27 April 2012. The principal objective of the strikes as stated in SEPLA's strike notices was to halt the transfer by Iberia of short and medium business to Iberia Express or any other company other than as regulated under the pre-existing collective agreement.
7. On 7 December 2011, IFALPA sent a letter to all of its...
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