Al Wakeelo
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Petitioner: EFU General Insurance Ltd VS Respondent: M/s. Emirates Airline /Emirates Sky Cargo and 4 others
Court Name: Sindh High Court Judge(s): Muhammad Faisal Kamal Alam Title:EFU General Insurance Ltd vs M/s. Emirates Airline /Emirates Sky Cargo and
4 others Case No.: (1) Suit No.1847 of 2016 (2) Suit No.1836 of 2016 (3) Suit No.1837 of 2016 Date of Judgment:2020-05-06 Reported As: 2021 CLC 824, 2020 SHC 340 Result: N/A Judgment Muhammad Faisal Kamal Alam, J: Due to commonality , question of maintainability of all the titled suits are decided by this decision. 2. Plaintif fs have filed separate suits in respect of monetary claims against the Defendants. Merely as a reference, Prayer Clause in leading Suit No.1847 of 2016 is reproduced herein under_ "The Plaintif f, therefore, pray for Judgment and Decree for Rs.8,00,71,631.00 against the Defendants No.1 and 2 jointly and severally with cost and interest / mark-up / damages / compensation @19% per annum, with quarterly rest thereon pendentelite and future and for any other or better relief which the Hon'ble Court may deem fit and proper in the circumstances of the case." 3. Upon issuance of summons and notices, Defendants contested the claims of Plaintif f(s) in different suits by filing their individual Written Statements. Plaintif fs and Defendants also filed their proposed Draft Issues, which are available in the record. 4. In the intervening period, in Suits No.1837, 1840 and 1854 of 2016, under Order VII Rule 11 of CPC, for rejection of plaints. In these applications (under Order VII Rule 11 of CPC) and also in Written Statements, Defendants (Air Carriers) and their local handling Agent, viz. Defendant-Gerry Dnata (Private) Limite d {the contesting defendants } have questioned the maintainability of all these suits primarily on two legal grounds; (i) that these suits are barred by limitation prescribed in Rule-35 of the Carriage by Air Act, 2012 ( CAR ), and (ii) these lis are also barred under Rule-18, sub-rule-2(c) of the Fourth Schedule of CAR (the Carriage of Air Act, 2012) because the intense fighting betwe en attackers / militants and personnel of Law Enforcement Agencies of Pakistan at the Jinnah International Airpo rt (JIAP) falls within the term of Armed Conflict as envisaged in above provision; therefore, the exemption from any liability as contained in the above Rule-18(2)(c) relating to an Act of War or an Armed Conflict, is applicable in all these cases.
---
## Page 2
5. On 22.04.2019 and subsequent dates, all learned Advocates for Plaintif fs and Defendants have made their respective submissions. On 10.12.2019 some clarification was required, therefore, matter was fixed for rehearing on 17.12.2019. 6. Plaintif fs in all suits are Public Limited Insurance Companies and have filed these cases against Defendants for recovery of amounts, which the Plaintif fs have paid (purportedly) to their respective clients as insurance claims in relation to various cargoes destroyed on the night and early morning of 8th and 9th June, 2014, at the Jinnah International Airport (Karachi Airport ) during an armed attack by a group of terrorists. In plaints of different suits, specific details about various consignments are mentioned, which arrived at Karachi Airport through different Defendant International Airlines (mentioned in the title). It is stated in the plaint that since Plaintif fs have settled the insurance claims faithfully of their differen t clients whose consignments/cargoes were destroyed in the warehouses at Karachi Airport, thus Plaintif fs being insurers, are now entitled to claim those amounts from Defendants, inter alia, in terms of Section 135-A of the Transfer of Property Act (Property Law ). 7. Since the incident at Karachi Airport is not disputed, therefore, it was agreed by all the learned Advocates that at this stage both issues of limitation (under Rule 35, ibid) and Armed Conflict [under Rule 18 (2)(c)] can be decided. Since submissions of the learned Advoc ates have primarily revolved around the above two provisions of CAR, therefore, it is necessary to reproduce the same herein under:- "18. Damage to cargo.--(1) The carrier is liable for damage sustained in the event of the destruction or loss of, or damage to cargo upon condition only that the event which caused the damage so sustained took place during the carriage by air . (2) However , the carrier is not liable if and to the extent it proves that the destruction, or loss of, or damage to, the cargo resulted from one or more of the following: (a) inherent defect, quality or vice of that cargo; (b) defective packing of that cargo performed by a person other than carrier or its servants or agents. (c) an act of war or an armed conflict (d) an act of public authority carried out in connection with the entry , exit or transit of the cargo. (3) The carriage by air within the meaning of paragraph 1 of this rule comprises the period during which the cargo is in the charge of the carrier . (4) The period of the carriage by air does not extend to any carriage by land, by sea or by inland waterway performed outside an airport. If, however , such carriage takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary , to have been the result of an event which took place during the carriage by air. If a carrier , without the consent of the consignor , substitutes carriage by anoth er mode of transport for the whole or part of a carriage intended by the agreement between the parties to be carriage by air, such carriage by another mode of transport is deemed to be within the period of carriage by air ." "35. Limitation of actions.---The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped." (Underlined for emphasis) 8. The learned Advocate for Plaintif fs has relied upon the following case law and research material in support of his arguments_ i. PLD 2002 Supreme Court page-841 [Muhammad Mushtaq vs. Muhammad Ashiq and others). ii. United States Court of Appeals Oct. 15, 1974 [Pan American W orld Airways Inc. vs. The Aetna Casualty & Surety Co., and others ] - Pan American case. iii. International Committee of the Red Cross (ICRC) Opinion Paper , March 2008. iv. Institute of Cargo Clauses (AIR) (excluding sending by Post). v. A Report on the applicability of IHL to terrorism and counterterrorism. vi. Chambers 28th Century Dictionary (New Edition 1983).
---
## Page 3
vii. Terrorism Risk Insurance Act. viii. Contracts of Carriage By Air [Second Edition by Malcolm Clarke] LIoyd's List Condon 2010. ix. True Translation of FIR No.87 of 2004 lodged at Police Station Karachi Airport on the fateful day when Karachi Airport was attacked. x. A copy of Wikipedia relating to 2014 Jinnah International Airport Attack'. xi. Anti-T errorism Act, 1997. xii. Black's Law Dictionary (Sixth Edition). xiii. Committee Final Report vis--vis The Hague Conference, 2010 on Use of Force'. xiv. Relevant pages from the Book Defining Armed Conflict' by Natasha Balendra. 9. Mr. Mazhar Imtiaz Lari, Advocate for the Plaintif fs, read the contents of the afore referred FIR in support of his arguments, submitting that the version of the State in the FIR itself mentions the attack at the Karachi Airport as a terrorist attack in which precious lives including that of personnel belonging to law enforcement agencies were lost, besides causing other collateral damages. It is argued by learned counsel that the term "Armed Conflict" has to be interpreted in a limited sense, and an attack which can be termed as a terrorist attack does not fall within the purview of "armed conflict" or an act of war' as mentioned in the above Rule-18(2)(c) of the CAR, because Geneva Conventions only recognises two distinct categories of armed conflicts; international and non-international. Usually an international Armed Conflict arises between two or more high contracting parties, which are States or Countries. The learned counsel for the Plaintif fs submitted that; despite considera ble damage to life and property , and international and local media attention, the incident at the Karachi Airport was a terrorist attack as defined in Section-6 of the ATA Law. He has relied upon the case of Mushtaq (ibid) in which the Hon'ble Supreme Court has explained an act of terrorism in the following words_ "7. It would thus appear that ordinary crimes are not to be dealt with under the Act. A physical harm to the victim is not the sole criterion to determine the question of terrorism. What is to be seen is the psychological effect produced by the violent action or with the potential of producing such an effect on the society as a whole or a section thereof . There may be a death or injury caused in the process. Thus where a criminal act is designed to create a sense of fear or insecurity in the minds of the general public disturbing even tempo of life and tranquillity of the society , the same may be treated to be a terrorist act. There may be just a few killings, rando m or targeted, resorted to with single mindedness of purpose. But nevertheless the impact of the same may be to terrorise thousands of people by creating a panic or fear in their minds". 10. The Plaintif fs counsel has referred to the afore referred dictionaries containing the meaning of terrorism, armed and conflict, respectively_ Terrorism. "Act of terrorism" means an activity that involves a violent act or an act dangerous to human life that is a violation of the criminal laws of the United States or of any State, or that would be a criminal violation if committed within the jurisdiction of the United States or of any State; and appears to be intended--(i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion, or (iii) to af fect the conduct of a government by assassination or kidnapping. Armed furnished with arms: provided with means of defence: thorny: with beak, claws, etc., of such and such a tincture (her). Conflict kon'flikt, n. violent collision: a struggle or contest: a battle: a mental struggle.---v .i. (k'n-flickt') to fight: contend: to be in opposition: to clash. 11. The definition of terrorism as contained in Terrorism Risk Insurance Act, 2002 (USA Statute) is also relied upon by Plaintif fs counsel, which for ready reference is mentioned herein under_ Definition of terrorism "The term "act of terrorism" is defined in the act as: any act certified by the Secretary of the Treasury , in concurrence with the Secretary of State and Attorney General, to be an act that is dangerous to human life, property , or infrastructure and to have resulted in damage within the U.S. (or outside the U.S. in the case of a U.S. flagged vessel, aircraft or premises of a U.S. mission). It must be committed as part of an effort to coerce U.S. civilians or to influence either policy or conduct of the U.S. Government through coercion. The
---
## Page 4
definition includes both foreign and domestic terrorists. The Secretary may not delegate this certification authority and his or her decision to either certify an act of terrorism is not subject to judicial review ." 12. Learned counsel for Plaintif fs also referred to Standard Clauses relating to contract of Carriage as contained under "Institute Cargo Clauses (AIR)", to fortify his arguments that war, civil war, rebellion and insurrection, hostile act by or against a belligerent power are mentioned separately and hence distinct from an act of terrorism, which can be carried out by any person or organisation, and includes over throwing or influencing by force or violence of any government whether or not legally constituted. As per submissions on behalf of Plaintif fs, it is sub-Rules (1), (3) and (4) of Rule 18 (ibid) which will govern the subject incident and damage sustained. These Rules relate to the liability of a carrier , in this case the present Defendants Airlines, in the event of destruction or loss, or damage to, cargo. Rule (3) clarifies that the carriage by air comprises the period during which cargo is in the charge of the carrier . Therefore, it is submitted, that since all the consignments / cargoes in question were destroyed in the warehouse of Defendants-Handling Agents of Defendant-Airlines / carriers, thus these contesting Defendants are jointly and severally liable for the amount of compensation claimed. 13. It is contended by the Plaintif fs that in the Pan American case (supra ), the United States Court of Appeals, affirmed the decision of District Court, which had repelled the arguments of Insurance Company that the Pan American Airliner , which was destroyed during hijacking, was a result of a situation falling within the ambit of war, civil war, rebellion and insurrection. Amongst other findings, it was held that hijacking committed by the two members of Popular Front for the Liberation of Palestine (PFLP) did not fall within the purview of any of the exclusion clauses of Insurance Policy relating to war, insurrection civil commotion or war like operation because that particular incident of hijacking was not a large scale violence. The learned counsel for Plaintif fs draws parallel between the above cited case and the present cases, that an unfortunate terrorist attack at the Karachi Airport cannot be viewed as a large scale violence and hence was not an Act of War or an "Armed Conflict" as mentioned in the above CAR, hence Defendants are liable to pay the claims of Plaintif fs. 14. It is contended that the "Armed Conflict" has to be used in a narrow sense, and only in the context of International Human Rights Law (IHL), inter alia, because once an "armed conflict" starts by one high contracting State (Country) against the territory of another State, resultantly , Geneva Convent ions become applicable, but this might not happen when Government of a State is tackling with some militia or groups creating law and order situation within its borders, as was continuously and successfully being done by the law enforcement agencies in Pakistan. It was argued that undisputedly all the attackers (terrorists) were killed in the Anti-T errorist Operation by the Law Enforcement Agencies of Pakista n during the incident at Karachi Airport, and as per official version, all the attackers were foreigners of Uzbek origin; however Uzbekistan did not claim the bodies of the attackers, hence this shows that, had it been an incident classifiable as an "Armed Conflict" , then at the very least International Red Cross or some other international or local organisations dealing with humanitarian aid would have come forward. 15. The learned Advocate for the Plaintif fs has also cited Rule 50 of the CAR, that Defendants Airlines (Carriers) are required to maintain adequate insurance coverage for their liabilities and it is mandatory for carriers to have comprehensively insured all the Cargoes, which were placed under their custody for transportation. 16. The second part of arguments of Plaintiffs legal team is about the period of limitation, the crux of which is this that the carriage of the cargoes has not concluded hence the claim of the Plaintif fs is within the period of limitation. To support this argument the Plaintif fs have relied on certain pages of the Book - Contract of Carriage by Air (Second Edition) in which a comparative discussion on Article-35 of Montreal Convention, which is now incorporated in the above referred CAR, and Article-29 of the Warsaw Convention, is made. The relevant part applicable to the facts of the present case , as argued, is found in Paragraph-7 on Page 184 of the aforesaid book, which states that a "Carriage Ceases" not when the physical movement of the baggage or cargo stops nor at the time of arrival of the cargo, but rather the carriers responsibility ends when the cargo is handed over to the claimant. It is submitted by the Advocate for the Plaintif fs that Rule-35 of CAR, and Article 35 of Montreal Convention, is only activated when the Carriers (in the present case, Defendants Airlines) responsibility comes to
---
## Page 5
its end; hence as the Defendant-AirDanata was the handling Agent of Defendant-Airlines, therefore, shifting of different consignments / cargoes in the warehouses of Defendant-AirDanata did not mean that cargoes in question were handed over to consignees, but rather were still in the custody of Defen dant-Airlines at the time when warehouses at Karachi Airport were destroyed due to the terrorist attack. 17. M/s. Furkan Ali and Adeel Abid, Advocates, representing contesting Defendants in the title suits have supplemented each others arguments, gist of which is that_ all the claims in these suits are time barred, as these Lis were filed after the two years time prescribed in Rule-35 of the Fourth Schedule of CAR. the above rule is to be strictly interpreted and the rule of interpretation relating to Limitation Law (as applicable in Pakistan) is not applicable; even otherwise in terms of Section-29 of Local Limitation Law, its applicability is ousted by the above Special Statute- CAR ; that the unique feature of above Rule 35 is that it extinguishes the right to bring a claim of the nature and therefore, it means that the two years time cannot be extended on any ground whatsoever . 18. The second limb of arguments of Defendants is that the attack at the Karachi Airport was not an isolated incident of terrorist attack but at the relevant time State of Pakistan was at War with terrorist groups and armed militias, which is a matter of record, thus Rule-18, (2)(c) is fully attracted to the undisputed facts of present case and contesting Defendants are not liable to pay any monetary claim to Plaintiffs, inter alia, because the loss / damage to different consignments / cargoes did not result from any negligence, act or omission either on the part of the Carrier or its Agents, viz. contesting Defendants, but solely due to the above armed confrontation between the Law Enforcement Agencies of Pakistan and armed militants; that it was a force majeure beyond control of any of the parties; that term Armed Conflict as used in the above Rule -18(2) (c), and interpreted by different international bodies, courts and tribunals in multiple jurisdictions, will apply to the subject incident at Karachi Airport; that the decision handed by our Apex Court in the case of District Bar Association, Rawalpindi versus Federation of Pakistan (Military Courts case ), reported in PLD 2015 Supreme Court page-401, various incidents of terrorism have been cited, including attack on civilian airports and collectively they were termed as an act of W ar; that different incidents of terrorism had occurred in Pakistan in that period and were of such a scale that the terror incident at Karachi Airport cannot be considered in isolation but was a continuation of other organized, unlawful and sabotage activities carried out by proscribed groups and militia. 19. Following case law and research material is relied upon by the legal team of Defendants_ i. PLD 2015 Supreme Court 401 [District Bar Association, Rawalpindi vs. Federation of Pakistan ] ii. National Consumer Disputes Redressal [ Indian Airlines Ltd. Vs. Ashok Gupta & Anr] iii. 1986 SCMR 890 [Messrs Kuwait Airways Corporation vs. Messrs Union Surgical Company]. iv. PLD 1962 Dacca page-31[New Zealand Insurance Co. Ltd., Chittagong vs. M.A. Rouf and others]. v. 2000 MLD 1454 [Karachi] [Shahanshah Hussain vs. Messrs Thai Airways International Limited ]. vi. AIR 1960 Supreme Court 1058 [East and West Steamship Co., George Town, Madras vs. S.K. Ramalingam Chettiar]. vii. PLD 1976 Karachi 184 [Pakistan International Airlines Corporation, Karachi vs. Shaikh Muhammad Younus]. viii. Case law from foreign jurisdiction - Juan Carlos Abella versus Argentina . Before Inter-American Commission on Human Rights. ix. International Committee of the Red Cross (ICRC) Opinion Paper , March 2008 {How is the Term "Armed Conflict" Defined in International Humanitarian Law}. x. International Law (sixth edition) by Malcolm N. Shaw . xi. Commentary on Montreal Convention, By Prof. Dr . Elmar Giemulla. 20. Mr. Agha Zafar Ahmed, Advocate represents Damco Pakistan (Private) Limited, which has been impleaded as one of the proforma Defendants being mentioned as consignee in Master Airway Bills. In its Written Statement, this
---
## Page 6
Defendant has questioned maintainability of suits in a formal manner . Learned Advocate, therefore, has confined his arguments to the extent of development of civil aviation law in relation to terrorism. He has filed copies of the Conventions for suppression of unlawful acts in connection with civil aviation services at the airports. Learned Advocate has also filed a list of Proscribe d Organizations issued by NACT A (National Counter Terrorism Authority , Government of Pakistan), under Section 11-B read with Schedule - I of ATA (Anti- Terrorism Act, 1997) and cited the case law - PLD 1958 Supreme Court (Pakistan) 138 (The Hanover Fire Insurance Company versus Messers Muralidhar Banechand ), that statutes be interpreted and applied, as far as its language admits, as not to be inconsistent with the comity of nations, or with the established rules of international law . 21. Arguments heard and record of the present Cases (Lis) as well as case law and other research materials produced by the learned Advocates for the parties have been considered. 22. First the issue of the scope of "armed conflict" will be determined. 23. Since there is a direct nexus between Armed Conflict and International Humanitarian Law (IHL), and since the Plaintif fs have argued that Armed Conflict consist of only those situations covered by IHL, it may be advantageous to give a brief introduction of IHL, which is increasingly perceived as part of human rights law but applicable only in armed conflict . In the book "The Manual of International Humanitarian Law" by Dieter Fleck (ibid), while describing the historical origins of IHL has made reference to the development of war rules during Islamic Era, in particular , since the time of the First Caliph, Hazrat Abu Bakar (R.A), who in his orders to his commanders, directed that The blood of women, children and old people shall not stain your victory . Do not destro y a palm tree, nor burn houses and cornfields with fire, and do not cut any fruitful tree. You must not slay any flock or herds, save for your subsistence. The International humanitari an law (IHL) and international human rights law (HRL) as we know today are two distinct but complementary bodies of law. They are both concerned with the protection of the life, health and dignity of individuals. IHL applies in armed conflict while human rights law applies at all times, in peace and in war. 24. At this juncture one must examine what constitutes Armed Conflict, which is widely recognised as consisting of two types, that is, International Armed Conflict (IAC) and Non-International Armed Conflict (NIAC ). International armed conflict can be explained when there is a resort to armed force between States; existence of an armed conflict is assumed when parts of the armed forces of two States clash with each other , triggering Common Article 2 to the Geneva Conventions of 1949, which inter alia, stipulates that the wounded and surrendering members of the armed forces, or civilians of another State, all should be treated humanely . On the other hand, after going through the afore-referred record and commentaries, the consensual view which emerges for explaining Non-International Armed Conflict [NIAC ] is, that if the internal disturbances and tensions in a country reach a level of confrontation which requires a government to use military force against insurgents in order to forestall and curb hostilities carried out by such groups which are organised, armed, and having command structure; then such a situation falls within the purview of Non-International Armed Conflict [ NIAC ]. Here, it would be necessary to reproduce some paragraphs from the above ICRC Opinion Paper of March, 2008, which has been interpreted by both legal teams of Plaintif fs and Defendants in support of their respective arguments_ "Judgments and decisions of the ICTY (*A) throw also some light on the definition of NIAC. As mentioned above, the ICTY went on to determine the existence of a NIAC "whenever there is [...] protracted armed violence between governmental authorities and organised armed groups or between such groups within a State" . The ICTY thus confirmed that the definition of NIAC in the sense of common Article 3 encompasses situations where "several factions [confront] each other without involvement of the government's armed forces".…
Read the unabridged text and precedent citation network on Al Wakeelo Legal Research Platform.