Nottingham Travel (UK) Limited v Pakistan International Airlines Corporation

An issue estoppel may prevent a party from advancing a different construction of the same contractual provision in later proceedings, even where the later claim concerns a different period or cause of action. The earlier determination may bind the parties where the issue was fundamental to the decision, including where it was accepted or left uncontested, and an erroneous position may still generate an estoppel.

Terms incorporated by reference must be sufficiently brought to the other party’s attention before or when the contract is made. Particularly onerous or unusual terms require fair and reasonable notice. A document being notionally available is not necessarily communication. Remuneration ordinarily requires payment or an equivalent contractual reward, not merely an opportunity to make a profit.

Nottingham Travel, an IATA-approved travel agent, claimed further sums from Pakistan International Airlines Corporation under a 2012 passenger sales agreement. In earlier proceedings, Warren J had held that the claimant was bound by the agreement and entitled to Net Sale Remuneration, calculated by reference to a 7% discount. The account was later limited to sums accruing up to 14 June 2017.

The claimant brought the present claim for sums said to have accrued after that date. The defendant argued that Warren J had determined only the basis of the earlier account, that its pleaded case had been advanced by mistake, and that the claimant was instead subject to a Statement of Practice incorporated by clause 5. The issues were whether the earlier determination created an issue estoppel, whether an alleged collateral contract existed, whether the Statement of Practice was incorporated, and whether it provided remuneration.

1. Issue estoppel. The claimant’s entitlement to Net Sale Remuneration under the 2012 Agreement had been determined in the earlier proceedings. That issue was fundamental to the relief granted because the defendant had contended that the claimant was bound by the agreement and entitled to Net Sale Remuneration rather than commission. The determination applied to later claims under the same agreement, notwithstanding that those claims concerned subsequent ticket sales and a different period.
2. The defendant was estopped from contending that the claimant’s contractual entitlement was instead Revised NSR under the Statement of Practice. The later account judgments and orders reinforced the earlier determination. The distinction between determining the amount due on an account and determining the contractual basis of liability did not assist the defendant.
3. Issue estoppel was not avoided by the defendant’s assertion that its earlier case had been mistaken. The authorities establish that an erroneous admission, assumption or legal position may still bind the parties where the relevant issue was fundamental to the earlier decision. The defendant had not appealed the ruling that an amendment was required to advance Revised NSR.
4. Collateral contract. The claim was improperly introduced in the Reply contrary to CPR PD 16 para 9.2. In any event, the evidence did not establish a promise that tickets would be supplied at a 7% discount as remuneration. The collateral-contract claim therefore failed.
5. Incorporation of the Statement of Practice. Clause 5 did not incorporate the Statement of Practice. The document was not shown to have been supplied or communicated before or when the 2012 Agreement was made. Its mere possible availability on request would not have been sufficient. The relevant provisions constituted a significant change and were onerous and unusual, particularly given the parties’ bargaining positions, so fair and reasonable notice was required.
6. Remuneration. The Statement of Practice did not provide remuneration within paragraph 9 of IATA 824. It involved no payment by the airline to the agent and instead restricted the agent’s ability to charge a mark-up. Nor was the Statement of Practice communicated to the claimant. The court’s conclusions on the alternative issues were unnecessary to the result but were given because the matters had been fully argued.
7. The claim succeeded. Judgment was entered for the claimant for the amount agreed after adjustment, or as determined by the court if agreement was not reached. Quantum, interest, costs and the form of order were left for further determination.

First-instance decision. The judgment refers to earlier proceedings and account judgments in the same litigation, but no appeal from the present decision is stated.