United Airlines wins Landmark Antitrust Claim

Last December 28, 2015, the Ninth Court of the Civil Circuit of Panama, resolved an Antitrust Claim, filed by the Panamanian Authority of Consumer Protection and Defense of Free Competition (also known as ACODECO) against some international airlines like American Airlines, Delta Airlines, Taca International Airlines, COPA and Continental Airlines (now United Airlines), based on a supposed violation against the Panamanian Antitrust Laws, due to a common practice of the travel agencies of charging a percentage to the airlines in connection with the purchase of tickets.

Pardini & Associates is acting as legal counsel for United Airlines.

After 14 years of hard work, many motions filed by other law firms representing the other airlines and extended hearings, finally the Ninth Judge issued her final judgment in favor of the arguments proposed by Pardini & Associates, based on an Exception filed at the main hearing, in which it was sustained that the hierarchical application of the Open Skies Treaty entered into between United States and Panama, and duly ratified by Panama in 1998, should prevail over any other provisions of Panama law.

Having previously denied, every other Exception filed by the other airline´s attorneys, the aforementioned judgment, recognized that indeed our arguments were well grounded and had to dismiss ACODECO´s claim, based on the following facts:

• That the Panamanian Constitution states that Panama recognized International Treaties.
• That the Panamanian Civil Code establishes that a Law issued regarding a specific matter will prevail over a Law concerning a general matter. 
• That the Panamanian Civil Code establishes that when two Laws conflict, the newest one will prevail over the old one.
• That the Open Skies Treaty has an arbitration clause that prevails over the provisions contained in the antitrust legislation of Panama.

Based on these facts, Pardini & Associates was able to prepare a motion named back then: “Exception of International Rights through the Treaty between Panama and the United States of America, through Law No. 63 of October 15th 1998”.

Thanks to those arguments, every airline company involved might receive the benefit of the dismissal of ACODECO´s claim, and also we might be setting a new jurisprudence for any future coming process against airlines companies in Panama, stating the obligation to follow the process established in the Open Skies Treaty.

Right now, the District Court judgment has been appealed by ACODECO and the Travel Agencies, who participated with a third party intervention motion. Therefore, we will have to wait until the Third Court of Appeals of Panama rule over the appeal motion and hopefully recognize our Exception.

Lic. Juan Raúl Sevillano
jrsevillano@padela.com