Bosphorus Hava Yollari Turizm ve Ticaret as v Minster for Transport, Energy and Communications (Case C-84/95)

• Jurisdiction: Ireland
• Judge: Mr. Justice Barr
• Judgment Date: 22 January 1996
• Neutral Citation: 1996 WJSC-HC 179
• Docket Number: 1995–98 J.R.
• Court: High Court
• Date: 22 January 1996

1996 WJSC-HC 179

THE HIGH COURT

1995–98 J.R.

BOSPHORUS v. MIN TRANSPORT

JUDICIAL REVIEW

BETWEEN

BOSPHORUS HAVA YOLLARI TURIZM VE TICARET ANONIM SIRKETI

APPLICANT

AND

THE MINISTER FOR TRANSPORT, ENERGY AND COMMUNICATIONS, IRELAND AND THE ATTORNEY GENERAL

RESPONDENTS

Citations:

EEC REG 990/93 ART 9

EEC REG 990/93 ART 1.1(e)

EEC REG 1432/92

EEC REG 990/93 ART 8

BOSPHORUS V MIN FOR TRANSPORT 1994 2 ILRM 551

EEC REG 990/93 ART 10

EEC REG 990/93 ART 1

Synopsis:

AIRCRAFT

Impoundage

Authority - Council - Regulation - Implementation - Minister of State - Decision - Expedition - Requirement - Aircraft owned by Yugoslav airline - Aircraft operated by Turkish company under lease - Maintenance and insurance provided by lessee - Whether provision of non-financial services for Republics of Serbia and Montenegro - (1955/98 JR - Barr J. - 22/1/96) [1997] 2 IR 1

|Bosphorus Hava Yollari Turizm Ve Ticaret Anonim Sirketi v. Minister for Transport, Energy and Communications|

MINISTER OF STATE

Powers

Exercise - Expedition - Requirement - Procedures - Fairness - Powers exercised piecemeal - Unjustified losses incurred by innocent party - Impoundage of aircraft on two occasions - (1955/98 JR - Barr J. - 22/1/96) [1997] 2 IR 1

|Bosphorus Hava Yollari Turizm Ve Ticaret Anonim Sirketi v. Minister for Transport, Energy and Communications|

NATURAL JUSTICE

Fair procedures

Minister of State - Functions - Discharge - Expedition - Requirement - Powers exercised piecemeal - Unjustified losses incurred by innocent party - Impoundage of aircraft on two occasions - (1955/98 JR - Barr J. - 22/1/96) [1997] 2 IR 1

|Bosphorus Hava Yollari Turizm Ve Ticaret Anonim Sirketi v. Minister for Transport, Energy and Communications|

EUROPEAN COMMUNITIES

Council of Ministers

Regulation - Implementation - Minister of State - Decision - Expedition - Requirement - Fair procedures - Impoundage of aircraft in the State - Aircraft owned by Yugoslav airline - Aircraft operated by Turkish company under lease - Whether lessee provided non-financial services for purposes of business conducted in Serbia and Montenegro - European Communities (Prohibition of Trade with the Federal Republic of Yugoslavia Serbia and Montenegro) Regulations, 1993 (S.I. 144/93) - Council Regulation 990/93/EEC, articles 1, 9 - (1955/98 JR - Barr J. - 22/1/96) [1997] 2 IR 1

|Bosphorus Hava Yollari Turizm Ve Ticaret Anonim Sirketi v. Minister for Transport, Energy and Communications

1 Judgment delivered by on the22nd day of January, 1996 Mr. Justice Barr

2 This is an application brought by Bosphorus Hava Yollari Turizm Ve Ticaret Anonim Sirketi (Bosphorus), a company incorporated under the laws of the Republic of Turkey which carries on an air tourism business which it operated from Turkey and Great Britain. The respondents are the Minister for Transport, Energy and Communications (the Minister), Ireland and the Attorney General.

3 The application relates to a Boeing 737-300 Aircraft (the Aircraft), Registration Letters TC-CYO, a passenger-carrying aeroplane of which at all material times Bosphorus had exclusive possession and control on foot of a lease dated 17th April, 1992 between Bosphorus and Yugoslav Airlines (JAT), the owner of the aircraft. The Minister has purported to detain the aircraft at Dublin airport under Article 9 of Council Regulation (EEC) No. 990/93 on suspicion of having violated the provisions of that regulation and, in particular, Article 1.1(e) thereof and Council Regulation (EEC) No. 1439/92.

4 Arising out of the detention of the aircraft by the Minister, Bosphorus seeks by way of Judicial Review the following reliefs:-

5 (1) A Declaration that Bosphorus has not breached any of the provisions of Regulation (EEC) No. 990/93.

6 (2) If necessary, an Order of Certiorari by way of an Application for Judicial Review providing that the decision and order of the Minister dated 5th August, 1994 purporting to detain the aircraft be quashed.

7 (3) If necessary, an Order of Mandamus directing the Minister forthwith to make a decision concerning the impounding of the aircraft pursuant to Council Regulation (EEC) No. 1432/92 and/or Council Regulation (EEC) No. 990/93 which replaces and re-enacts the former.

8 This is the second application by way of Judicial Review brought by Bosphorus against the Minister relating to the aircraft. From 16th to 28th May, 1993 it was in the possession of Team Aer Lingus at Dublin Airport for a major service known as a "C Check" which the latter carried out pursuant to contract with Bosphorus. International aviation authorities, including those in Turkey where the aircraft is registered, require "C Checks" to be carried out on all large commercial aircraft every 4,000 flying hours and certificates of compliance are required to satisfy the authorities in that regard. The work was completed and the aircraft was on the apron of the airport awaiting flight control clearance to fly from Dublin to Turkey on the latter date when it was refused permission to leave Dublin by the Minister and on 8th June, 1993 was impounded by him under Article 8 of Council Regulation (EEC) No. 990/93 on the ground that a majority or controlling interest in the aircraft was held by an undertaking (JAT) in or operating from the Federal Republic of Yugoslavia (Serbia and Montenegro). The Minister's action in impounding the aircraft was challenged by Bosphorus by way of Judicial Review which was heard by Murphy J. on 14th June, 1994. He delivered judgment on 21st June, 1994 which is reported in [1994] 2 I.L.R.M. 551 and [1994] 3 C.M.L.R. 464. On that date he made an order declaring as follows:-

"The Court doth declare that the aircraft... the subject matter of these proceedings is not an aircraft to which Article 8 of Council Regulation (EEC) No. 990/93 applies not being an aircraft in which a majority or controlling interest is held by a person or undertaking in or operating from the Federal Republic of Yugoslavia (Serbia and Montenegro). Accordingly the Court doth declare that the decision of the [Minister] dated 8th June, 1993 to impound the said aircraft was ultra vires the said Regulation... ".

9 The essence of Mr. Justice Murphy's judgment is that he interpreted "interest" in Article 8 as being the right to possession, the right to enjoy control and to regulate the use of the asset, rather than the right to any income derived from it. Accordingly, as Bosphorus alone had possession of the aircraft and the right to enjoy control and regulation of it, it followed that, for the purposes of the regulation, Bosphorus had the majority and controlling interest in the aircraft and, therefore, the Minister was not empowered to impound it in the circumstances.

10 The facts relating to the latter application are fully set out in the judgment of Murphy J. and I do not propose to reiterate all of them herein. The Minister, having failed in his attempt to impound the aircraft under Article 8 of 990/93, thereupon sought to detain the aircraft under Article 9 on suspicion of having violated the latter regulation and in particular Article 1.1(e) thereof.

11 Council Regulation (EEC) No. 990/93 was promulgated on 26th April, 1993 and concerns trade between the European Economic Community and the Federal Republic of Yugoslavia (Serbia and Montenegro). It arises out of the war in the Republic of Bosnia-Herzegovina in which Serbia has participated, directly or indirectly, contrary to resolutions of the United Nations. The purpose of the regulation is to impose sanctions against Serbia and Montenegro on behalf of the Member States of the European Union. The relevant provisions are as follows:-

"Article 1

12 1 As from 26th April, 1993, the following shall be prohibited:...

13 (e) The provision of non-financial services to any person or body for purposes of any business carried out in the Republics of Serbia and Montenegro.

Article 8

14 All vessels, freight vehicles, rolling stock and aircraft in which a majority or controlling interest is held by a person or undertaking in or operating from the Federal Republic of Yugoslavia (Serbia and Montenegro) shall be impounded by the competent authorities of the Member States.

Article 9

15 All vessels, freight vehicles, rolling stock, aircraft and cargoes suspected of having violated, or being in violation of, Regulation (EEC) No. 1432/92 or this Regulation shall be detained by the competent authorities of the Member States pending investigation.

Article 10

16 Each Member State shall determine the sanctions to be imposed where the provisions of this Decision are infringed.

17 Where it has been ascertained that vessels, freight vehicles, rolling stock, aircraft and cargoes have violated this Regulation, they may be forfeited to the Member State whose competent authorities have impounded or detained them".

18 The following is a resume of the facts and documentation relating to this application. Essentially there is no dispute between the parties in that regard:-

19 Bosphorus entered into a dry lease with JAT on 17th April, 1992 being in the nature of a charter by demise of two Boeing 737-300 aircraft owned by JAT and leased to Bosphorus for a period of four years from the date of delivery of each aircraft (i.e. 22nd April and 6th May, 1992) at a rent of $150,000 per aircraft per week. Subject to the terms of the lease, Bosphorus was granted sole possession, direction and control of the aircraft by the lessor. It was provided that the aircraft be registered by Bosphorus with the Turkish aeronautical authorities and this was duly done. The lease provided that the lessor would pay for insurance of the aircraft and with the lessee would be responsible for maintenance to ensure the airworthiness of the aeroplanes and due compliance with the requirements of the Turkish aeronautical authorities. This provision was stated to be subject to a...