## Facts

- The United States and France were parties to a 1946 air services agreement (as amended), setting routes for scheduled air services, including West Coast–Paris with an intermediate stop in London.
- The agreement’s annex addressed “transshipment” (change of gauge) and expressly permitted it at specified points in the territory of the two parties, subject to conditions.
- In 1978, a U.S.-designated carrier proposed resuming West Coast–London–Paris service using a larger aircraft to London and a smaller aircraft from London to Paris (and the reverse on return).
- France asserted the agreement did not authorize a change of gauge in a third country (London) absent France’s consent and blocked the operation by refusing disembarkation in Paris and ordering the aircraft to return to London.
- The United States initiated regulatory steps to restrict certain French carrier services to the U.S. as a response; the contemplated restrictions were not implemented after the parties agreed to arbitrate.
- An ad hoc arbitral tribunal was constituted by agreement to decide a binding treaty-interpretation question and to provide a non-binding advisory response on the U.S. measures.

## Issues

1. Whether the air services agreement permitted a U.S.-designated carrier to operate West Coast–Paris service with a change of gauge in London.
2. Whether, under the circumstances, the United States was entitled under international law to initiate non-forcible countermeasures restricting French carrier operations, including whether such measures were proportionate and consistent with duties to negotiate and avoid aggravating the dispute.

## Decision

- The tribunal held (binding) that the agreement permitted a U.S.-designated carrier to operate West Coast–Paris service with a change of gauge in London.
- The tribunal rejected the argument that treaty silence on change of gauge in third-country territory implied a prohibition, emphasizing interpretation of the agreement as a whole and in context.
- The tribunal stated (advisory) that countermeasures short of force may be available in principle to a state responding to an asserted breach of international obligations.
- The tribunal emphasized restrictive conditions on countermeasures, including proportionality and serious recourse to negotiation and dispute-settlement processes, cautioning against premature or escalating measures.

## Legal Principles

- Treaty interpretation is holistic: meaning is drawn from the text read as a whole, its context, object and purpose, and relevant subsequent practice.
- Treaty silence does not, by itself, establish an implied prohibition; whether silence allows or bars conduct depends on the agreement’s structure, aims, and practice under it.
- A “continuous” designated air service may remain within treaty authorization despite operational changes (such as changing aircraft size) when consistent with agreed routes and capacity limits.
- Non-forcible countermeasures may be lawful in response to an asserted breach, but must satisfy conditions including proportionality and a compliance-inducing (not punitive) function.
- States are expected to pursue negotiation and to avoid steps that aggravate disputes, particularly where agreed dispute-settlement procedures are being invoked.
- The exhaustion of local remedies is generally inapplicable where the alleged injury is directly to the state rather than a derivative claim based on injury to private parties.

## Conclusion

The tribunal interpreted the bilateral air services agreement to allow a change of gauge in London for a West Coast–Paris service, and it treated countermeasures as potentially lawful in principle while stressing proportionality and procedural restraint through negotiation and dispute-settlement channels.


Case Concerning the Air Services Agreement of 27 March 1946 (U.S. v. Fr.), 18 R.I.A.A. 417 (Int'l Arb. Trib. 1978)