Case concerning the Air Services Agreement of 27 March 1946 (United States v. France)

Under a 1960 amendment to the Air Services Agreement of 27 March 1946 between the United States (plaintiff) and France (defendant), United States and French air carriers were permitted to operate flights between the two countries. From the 1960s through the mid-1970s, the American carrier Pan Am operated a route from the West Coast to Paris that had an intermediate stop in London. In 1978 France enacted legislation that required flight schedules to be filed 30 days in advance. Pursuant to the new law, Pan Am informed the French authorities of its plan to continue the West Coast-London-Paris route. The French authorities denied approval of Pan Am’s route on the ground that Pan Am’s stop in London violated the Air Services Agreement because the agreement only permitted flights between the United States and France, without stops in a third territory. On May 1 and 2, 1978, Pan Am attempted to continue operation of the route, but on the second attempt, the pilot was instructed by the French police to return to London without allowing any of the passengers to disembark the plane. On May 4, the United States proposed that the countries submit the issue to binding arbitration, while allowing Pan Am to continue the route pending the arbitral award. In the interim, the United States authorities took countermeasures by enacting regulations requiring French air carriers to obtain preapproval of their routes to the United States. France agreed to submit the dispute to arbitration and complained that the countermeasures taken by the United States against the French air carriers were disproportionate reprisals that violated international law, especially in light of the parties’ duty to negotiate in good faith under the Charter of the United Nations and the 1946 Air Services Agreement between the parties. [Ed.’s note: The casebook only includes the excerpt from the arbitral award that discusses whether the countermeasures taken by the United States were justified.]