International aviation carrier recovers liquidated damages for cancelled flight

One of the first judgments regarding failure of contractual obligations related to COVID-19 pandemic enters into effect.

COBALT successfully represented international aviation carrier Vulkan Air OÜ in a legal action for the recovery of liquidated damages of ca. EUR 85 000 (25% of the total agreement amount) caused due to client’s failure to properly perform obligations under a charter contract.

Vulkan Air OÜ committed to provide a charter service to ensure trans-continental transportation of face masks to Latvia in the beginning of 2020 when COVID-19 pandemic developed in the Baltic region. Although Vulkan Air OÜ took all the necessary steps to obtain the right to fly and to ensure the full performance of the planned charter service, the client refused  from the arranged flight. Consequently, Vulkan Air OÜ brought a court action to enforce a penalty stipulated in the charter contract.

While the claim was dismissed by the first instance court, it was fully satisfied by the appeals court upon appeals claim prepared by legal team of COBALT. The claim of Vulkan Air OÜ was fully satisfied, albeit 25% is generally considered to be excessive rate by Latvian jurisprudence. The Senate of the Supreme Court refused to initiate cassation proceedings and the judgment of the Court of Appeal in favour of COBALT’s client entered into force. This is one of the first court rulings in Latvia regarding failure of contractual obligations related to COVID-19 pandemic.

Legal assistance to Vulkan Air OÜ was provided by a COBALT team of Managing Partner Lauris Liepa, Associates Dita Buša and Sabīne Zaula.