TUI Airways Limited & Ors v Smartlynx Airlines Malta Limited & Ors

On a summary judgment application, contractual time limits and notice provisions will not ordinarily bar an accrued payment claim unless the contract uses sufficiently clear language to make compliance a condition of the underlying right. A provision requiring compensation to be effected within a specified period may regulate timing rather than extinguish the claim.

A contractual anti-set-off clause requiring written consent is effective according to its terms. It prevents unconsented cross-claims being used as a defence, but does not necessarily exclude the court’s power to stay execution. A stay may be appropriate where a related cross-claim has a realistic prospect of success, subject to the parties and liabilities corresponding and the cross-claim being pursued expeditiously.

The second and third claimants sought summary judgment against the second and third defendants for sums arising from aircraft leasing and ACMI arrangements during the 2024 summer season. The claims concerned deposits, block-hours reconciliation, block-hours utilisation compensation, service-level remedies and costs.

The defendants accepted most underlying figures but relied on contractual notice and reconciliation arguments, implied terms, contractual set-off restrictions and proposed cross-claims. The court also considered amendments to the pleadings and whether execution should be stayed pending determination of related claims.

The central issues were whether the claims were barred by contractual timing or notice requirements, whether alleged cross-claims could be set off, and whether execution should be stayed.

1. Summary judgment and amendments. The court applied the established test, namely whether the defendants had a realistic, rather than fanciful, prospect of successfully defending the claims. Permission was granted for the proposed amendments. The absence of service on the first defendant was not a sufficient reason to refuse amendments, particularly since CPR 17.1 permits amendment before service without permission.
2. Block-hours claims. The agreed reconciliation figures gave the claimants a realistic basis for judgment. Even assuming cooperation or timing terms in the relevant agreements, those matters did not provide a defence where the figures had been reconciled and agreed. The court did not need to decide whether those terms existed.
3. Utilisation compensation. The timing in clause 8.2 of the Aircraft Supply Agreement was not a condition barring the underlying claim. The reference to compensation being effected within one month regulated the intended timing of payment. Clearer language would have been required to extinguish the claim for late notification. The formal notice provisions did not alter the result because the defendant knew of the claim and had engaged with the relevant operational contacts.
4. Service-level claims and costs. The defendants’ implied-term arguments did not defeat the service-level claims, and the court found no scope to imply a term postponing payment until agreement had been reached and a further period had elapsed. Costs were to be dealt with by subsequent costs orders and, if necessary, assessment on the indemnity basis.
5. Set-off and stay. Under clause 2.1 of Annex A to the Aircraft ACMI Common Terms Agreement, set-off required written consent. The defendants therefore could not rely on their proposed cross-claims as a defence. The clause did not exclude the court’s power to stay execution. A stay was granted for €111,976.15, representing a cross-claim against the same claimant and defendant relationship with a realistic prospect of success. No stay was granted for cross-claims involving different legal entities, sums already credited, or uncertain future costs.
6. Orders. Judgment was entered for TUI BEL against SLX EST for €976,976.77, subject to a stay for €111,976.15. Judgment was entered for TUI NED against SLX LAT for €497,084.