Ethiopian Airlines loses appeal against Consumer Commission ruling
In the modern era where there is close interconnection among countries in trade and business, the principle of sovereign immunity is not absolute and they will have to abide by the laws of the country they operate in, the Supreme Court has held.
Countries which participate in trade, commerce and business with different countries ought to be subjected to normal rules of the market. If state-owned entities operate with impunity, “the rule of law would be degraded and international trade, commerce and business will come to a grinding halt,” said a Bench of Justices Dalveer Bhandari, Mukundakam Sharma and Anil R. Dave.
Writing the judgment, Justice Bhandari rejected the contention that a foreign state or its instrumentality could not be proceeded against under the Consumer Protection Act for deficiency in service without obtaining prior permission from the Central government.
The Bench also did not accept the plea that a foreign state or its instrumentality could legitimately claim sovereign immunity from being proceeded against under the Act in a civil claim.
In the instant case, Ethiopian Airlines was aggrieved by a National Consumer Disputes Redressal Commission order holding that a dispute against it was maintainable and asking the Maharashtra State Commission to decide the issue afresh on its merits.
Complainant Ganesh Narain Saboo, who had booked a consignment with the airline, moved the State Commission, contending that gross delay in delivery at Dar es Salaam, Tanzania, led to deterioration of the goods.
Disposing of the appeal, the court held that the airline was not entitled to sovereign immunity in a suit like the one at issue and the Centre's consent was not required. Further, the provisions of the Civil Procedure Code would not apply in the case.
“That Ethiopian Airlines was not entitled to sovereign immunity with respect to a commercial transaction is also consonant with the holdings of other countries' courts and with the growing international law principle of restrictive immunity,” the Bench said.
“On a careful analysis of the American, English and Indian cases, it is abundantly clear that Ethiopian Airlines must be held accountable for the contractual and commercial activities and obligations that it undertakes in India”, the Bench said and asked the Maharashtra Commission to dispose of the case expeditiously.