Supreme Court Rules Liability Limitations Inapplicable

In 2007 the Supreme Court issued an important ruling in an appeal against a decision on the limitation period in the air transport sector. Traditionally, many players in the sector have understood that a legal action for damages caused by an aircraft, whether in the air or on the ground, must be brought within six months of the date on which the underlying facts occurred. However, the Supreme Court held that the statutory term within which to bring an action is extended for a period of one year from the acknowledgement of damages by the aggrieved party. 

Facts 

A helicopter crashed into the pontoons of Majorca harbour (not the customary heliport) when trying to land, causing serious damage to a nearby vessel. 

The insurance company, which subrogated to the shipowner, exercised its action for damages pursuant to Article 121 of Law 48/1960 on Air Navigation. The action was accepted by the court of first instance but rejected by the provincial court, which considered that the six-month term (from the date on which the damages were caused) established by law in which to exercise the action had expired (as per Article 124). 

Decision

The Supreme Court annulled the ruling and awarded damages to the insurance company, determining that the legal action was not time barred. The Supreme Court's position takes account of common law principles (in the absence of relevant rules on the matter) highlighted in Article 5 of the Air Navigation Law. Consequently, Article 1,968.2 of the Spanish Civil Code, which specifies a one-year limitation period following the acknowledgment of damages by the aggrieved party, is applicable, instead of the six-month term from the date on which the damages occurred, as established in Article 124 of the air navigation law. 

The decision is also based on:

• the restrictive interpretation under Spanish case law of the rules and regulations on limitation periods; 

• the inadmissibility of such a short period (six months after the damages occurred) in which to bring a legal action for damages in air traffic disasters; and

• the longer period (two years after the damages occurred) set out in the Rome Convention (which Spain has ratified) in which to bring action for damages caused by aircraft to third parties on the ground.