Choice of law causes turbulence
A High Court has recently ruled that English law did not apply to a contract between Ryanair and a passenger (the “Claimant”) where that contract stated that Irish law applied to “any disputes”, and that such clause was not in conflict with provisions of the Montreal Convention.
In Silverman v Ryanair DAC  EWHC 2955 (QB), the Claimant brought a claim for damages when he suffered an injury after falling from a set of aeroplane stairs at an airport in England. The Claimant brought the claim against Ryanair, as the aircraft operator. Ryanair sought to argue, despite wording in its terms and conditions (which formed part of the contract between Ryanair and the Claimant), that English law applied to the contract as opposed to Irish law.
The terms and conditions contained a choice of law clause which read as follows:
“Except as otherwise provided by the [Montreal] Convention or applicable law, your contract of carriage with us, these Terms and Conditions of Carriage and our Regulations shall be governed by and interpreted in accordance with the laws of Ireland and any dispute arising out of or in connection with this contract shall be subject to the jurisdiction of the Irish Courts.”
The Montreal Convention (“the Convention”) is a set of uniform rules which govern air carrier liability in the event of damage, and was commonly agreed to apply to this case.
Ryanair’s case was that the contract did not specify that Irish law applied to the interpretation of the Convention, but only to the interpretation of the terms and conditions, and that English law was the applicable choice of law. Ryanair also contended that its choice of law provision in the terms and conditions was not an ‘exclusive jurisdiction’ clause, and that if a more appropriate choice of law applied to the dispute, then that law should be applied. The Claimant argued that the Convention operates as a ‘pass-through’ to the laws which apply where the event took place (here, England, being the location of the incident). Under English and Welsh law, the contract would have been interpreted so as to apply Irish law to the dispute.
The High Court ruled in the Claimant’s favour. The Judge decided that mere silence in the Convention on the choice of law issue did not override the contractual agreement. Moreover, as the choice of law provisions in the contract did not conflict with any provision of the Convention the parties were free to choose which law applied to the contract in respect of damages. As the terms and conditions stated that Irish law applied, the Claimant was correct to assert that this took effect. The Judge also noted that the airline was closely connected with the Ireland in any event, and that the contractual choice of Irish law was therefore unambiguous.
This case provides useful guidance on the relationship between the Convention and contractual terms and conditions. The case is also a reminder that where the jurisdiction or choice of law provision in a contract is clear, the courts of England and Wales are likely to interpret the clause strictly unless there is good reason not to do so.
If you would like to discuss any issues concerning contract disputes, please contact a member of our Commercial Disputes Team.