Brazilian Supreme Federal Tribunal - In Favour Of Application Of Warsaw/Montreal Convention Regime

The Brazilian Supreme Federal Tribunal (SFT) decided yesterday, by a majority of 9 votes for and 2 against, in favour of application of Warsaw Convention 1929-Montreal Convention 1999 regime for international carriage by air. The decision was presented orally in the Supreme Federal Tribunal (SFT) in Brasilia yesterday. The published written version will hopefully be available within the next fortnight.

As airlines and insurers are painfully aware, although a party to both these Conventions, Brazil having most recently ratified the Montreal Convention in 2006, the Brazilian courts have regularly handed down decisions which "override" provisions of the International Conventions when and where such provisions are considered to conflict with local laws (in particular the 1990 Consumer Defence Code). Yesterday's STF decision brings more clarity to the conflicted issue of whether the Consumer Defence Code or the international aviation Conventions should apply: The STF decided that in cases involving international air carriage, the Conventions will prevail where there is conflict with the local law. This means, for example, that claims in Brazil arising from international carriage by air must now be brought within 2 years of an event (rather than the 5 years allowed by the Consumer Code).

Yesterday's SFT decision relates specifically to 2 suits (brought against Air France and Air Canada respectively) described in more detail below, but should have more widespread implications. The decision is positive news for airlines which fly international routes to/from Brazil, and of course for their insurers. With the advent of the "new" Brazilian procedural code, which came into force in March 2016, lower Brazilian courts should follow this new precedent set by the Supreme Federal Tribunal. That said, the STF decision unfortunately will not resolve the bugbear of high "moral damages" awards, which are regularly made in addition to the limits established by the international Conventions.

The Air France and Air Canada appeals (described in more detail below) were designated "Leading Cases" which would have a widespread repercussion. Accordingly, all the cases before the Supreme Courts in Brasília involving time-bar and the limitation of air carriers' liability pursuant to Warsaw/Hague or the Montreal Convention were suspended pending decisions by the STF made today. There are currently 417 such cases suspended: As a result of yesterday's decision, these cases should now move forward, although we anticipate many cases might be resolved by way of settlement now the subject matter at hand has been clarified by Brazil's highest legal authority.

Sylvia Regina de Moraes Rosolem versus Société Air France

The passenger travelled from Brazil to Spain in October 2005, but her checked bag was lost in transit. Since the Montreal Convention 1999 came into force in Brazil only in 2006, carriage was in theory governed by Warsaw Convention 1929 as amended by the Hague...