Pakistan International Airlines (PIA) has won a critical case related to the cancelation of old contracts of its sales agents in England at the London High Court.
The case has been concluded after about nine years and cost PIA over £20 million (approx Rs3.82 billion) in litigation charges.
The good news came last week when a three-member bench of London’s Court of Appeal overturned a 2017 judgment of High Court that found PIA guilty of exercising an economic duress when it terminated old contracts of Birmingham-based travel agent Times Travel in autumn 2010 and tried to replace it with a new one that didn’t favor the latter party.
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The unanimous judgment was handed down by Lord Justice David Richards, Lord Justice Moylan and Lord Justice Asplin of London’s Court of Appeal.
The verdict found that PIA’s termination of the contract with sales agent was a lawful act and it didn’t exercise any unlawful economic duress.
According to sources, Times Travel is yet to decide if it plans to appeal against the ruling. Once it is confirmed, the court will decide the legal costs and awards in a few weeks.
In 2010, the Association of Pakistan Travel Agents (APTA) dragged PIA to court against its commission claims on fuel surcharge.
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They claimed for pending payments against the 2 percent and 9 percent fuel surcharge under the previous agreement amounting to around £15 million.
In 2014, Times Travel separately moved to court demanding the commission and other payments which. according to them, were due under the legal binding.
The court ruled, “The YQ fare (the fuel surcharge which is also shown on the tickets as ‘YQ’) was not a government tax. Therefore travel agents were entitled to the payment of agreed commission on the amounts of this component.”
In 2017, the court awarded around £8 million in commission to the APTA members; as much in costs to their solicitors and around £5 million in legal fees to the PIA’s counsel. Both APTA and PIA reached financial settlements.
