QATAR AIRWAYS GROUP Q.C.S.C. v AIRBUS S.A.S.

Applications for a preliminary issue trial or interim injunction should be assessed by their practical utility, including whether they will resolve or materially narrow the dispute, save proportionate costs, or promote settlement. A preliminary issue is unsuitable where it duplicates evidence, distracts from a necessary speedy trial, or is unlikely to resolve a significant part of the proceedings.

For interim injunctions, the court must consider the final relief sought and apply the adequacy-of-damages inquiry realistically. A contractual cap or exclusion of damages does not automatically make damages inadequate. The claimant must identify the otherwise recoverable loss, the likely operation of the contractual restriction, and any substantial shortfall.

Qatar Airways sought a preliminary trial of whether Airbus had provided a contractual root-cause analysis concerning paintwork degradation affecting A350 aircraft. It also sought injunctions restraining Airbus from tendering aircraft for delivery and from acting on, or issuing, termination notices.

The applications arose in related proceedings managed for a speedy main trial concerning the aircraft’s condition, airworthiness, contractual obligations and compensation. The central questions were whether a preliminary issue would provide a real procedural benefit and whether the proposed injunctions were justified by the final relief sought and the adequacy of damages.

1. The preliminary issue application was dismissed. The proposed issue was unlikely to resolve the proceedings or a significant part of them, would involve overlapping factual and expert evidence, distract from speedy trial preparation and probably increase costs. The court applied the TCC Guide and the factors identified in Steele v Steele [2001] CP Rep 106.
2. The Delivery Injunction was refused. The proposed final injunction was unrealistic because it would effectively require rectification or redesign of the aircraft and a later determination of whether rectification had occurred. Qatar had not shown a serious issue that such final relief would be granted or that damages would be inadequate.
3. The Termination Injunction was refused. Existing or further termination notices would be ineffective if Qatar succeeded at trial, making an injunction restraining their issue unnecessary. Under AB v CD [2014] EWCA Civ 229, a damages cap does not automatically make damages adequate. The claimant must identify the recoverable loss, the likely operation of the cap and the resulting shortfall. Qatar had not done so.
4. All applications were rejected. Directions for a speedy main trial were to follow.