Edward Cumming KC helps to secure victory for Qatar Airways

Following a three-week trial in the Commercial Court in July 2022, Calver J has (i) dismissed claims of more than US$20 million brought by a well-known Italian airline seat manufacturer, Optimares, against Qatar Airways, and (ii) ordered Optimares to pay substantial sums on Qatar Airways’ counterclaim in a judgment handed down on Friday 7 October: Optimares SpA v Qatar Airways Group QCSC [2022] EWHC 2461 (Comm).

The dispute concerned agreements pursuant to which Optimares had agreed to design, manufacture and deliver business class and economy class seats for new Boeing 787-9, Boeing 777-9 and Airbus A321 aircraft that were to enter Qatar Airways’ fleet.

Although Optimares had agreed that the targeted ‘on dock date’ for the first set of seats would be 31 January 2020, this ‘on dock date’, and the ‘on dock dates’ for subsequent sets of seats, were missed.  By March 2020, the relationship between Qatar Airways and Optimares had broken down, and Qatar Airways was “completely uncertain” as to when any seats would be delivered.

Then, on 23 March 2020 Optimares purported to give notice of an event constituting an excusable delay, by writing to Qatar Airways to say that Covid-19 and restrictions that the Italian government had imposed in response to it, “ha[d] made all manufacturing and related processes effectively impossible”, and “removed [Optimares’] ability to perform the Purchase Agreement in any meaningful fashion.”  Further, Optimares wrote that it was “unable to provide a meaningful estimate as to when [it would] be able to resume its operations under the Purchase Agreement”.

Against this backdrop, Calver J found that it was unsurprising that Qatar Airways sought – in good faith – to exercise a contractual right to terminate its agreements with Optimares for convenience.  This termination entitled it to repayment, pursuant to those agreements, of various sums that Qatar Airways had paid to Optimares in advance of production of the seats.

Optimares pursued a variety of claims against Qatar Airways – including arguing that Qatar Airways was not entitled to exercise its contractual right to terminate the agreements, that the termination was in bad faith, and that it was entitled to wide-ranging relief in restitution – so as to entitle Optimares to recover both the costs that it had incurred working pursuant to the agreements prior to termination and lost profits of more than US$20 million.

Qatar Airways instructed Edward Cumming KC to appear at the trial in July 2022.  After hearing evidence and argument over three weeks, Calver J ultimately endorsed the submissions that they made on behalf of Qatar Airways to the effect that the proper disposition of the dispute was “really very straightforward indeed” and –  after an illuminating consideration of the role of restitution in the context of commercial contracts – went on to dismiss all of Optimares’ claims, and to order Optimares to repay to Qatar Airways nearly US$2.5 million (including interest) which it had paid to Optimares pursuant to the relevant contract.

A copy of the judgment, with neutral citation Optimares SpA v Qatar Airways Group QCSC [2022] EWHC 2461 (Comm), can be found here.

Edward Cumming KC has a thriving practice in aviation disputes – as part of his broader work on commercial and chancery litigation.  Earlier this year, in NAS Air Company v Genesis Ireland Aviation Trading 3 Limited [2022] EWHC 176 (Comm), judgment was handed down in which, following another lengthy trial, Edward Cumming KC helped to secure victory for an aircraft lessor (leading Erin Hitchens).