New IATA Standard Ground Handling Agreement 2003

IATA have produced their 2003 Standard Ground Handling Agreement ("SGHA") to replace the 1998 version. The revisions produce a more practical standard format agreement, with a focus on incorporating individually negotiated specifications into Annex B. The main changes are to Articles 5, 9 and 11.

The important indemnity provision in Article 8 has not been amended. Curiously, a new definition of "Direct Loss" has been added to the 2003 SGHA which is then not referred to anywhere in the Agreement, including Article 8. It is defined as: "a loss arising naturally or directly from an occurrence and which excludes remote, indirect, consequential, or special losses or damages, such as loss of revenue or loss of profit."

Article 5 Standard of Work: The thrust of the changes to Articles 5.1 and 5.2 is essentially that all services shall now be carried out in accordance with the Carrier's instructions, and only in the absence of instructions shall the Handling Company follow its own standard practises and procedures, provided they comply with the applicable IATA and/or ICAO and/or other governing rules, regulations and procedures when carrying out technical, flight operations and safety aspect services.

Article 5.9 is a new addition which in effect empowers the Carrier to audit the designated services in the applicable Annex B.

Article 9 Arbitration/Jurisdiction: Article 9 has been completely changed and is a shortened, more simplified version than before. Article 9 now puts an emphasis on the parties making all reasonable efforts to reach a "mutual resolution" to any dispute or claim before deciding whether to enter into arbitration. Furthermore, parties are now to specify in Annex B the exact jurisdiction and law that will settle the dispute if an arbitration is not agreed.

Article 11 Duration, Modification and Termination: Article 11.1 now requires that the date from which the SGHA will be effective is to be specified in Annex B. Article 11.3 on notice requirements has been modified to...