The Guardian: Rum deal over cancelled Cuba bookings
Campaign News | Saturday, 14 May 2005
US Travel company stops UK subisidiairies selling Cuba as a destination
Compensation wrangle as Ebookers drops trips, writes Richard Colbey
Saturday May 14, 2005
The latest example of the travel industry's seeming belief that it can cancel holidays at will is Ebooker's decision not to honour bookings to Cuba. What is striking is that Abta, the "honest broker" between the industry and public, has largely backed the company.
Hundreds of would-be passengers have had flights and holidays to the island cancelled since Ebookers was taken over by the American company Cedant. US Federal law still prohibits travel to Cuba.
It would arguably have been illegal for Cedant to have facilitated the flights even of UK residents on the Spanish Iberia Airways.
Ebookers has only offered £100 vouchers as compensation, although many people have had to rearrange trips at much greater cost. Legally, its liability is clear: it should meet any extra flight and accommodation costs.
Several affected passengers complained to Abta. Its chief lawyer considered the situation, in conjunction with Cedant's lawyers, and decided Abta could not pressurise Ebookers to honour contracts that were possibly illegal.
He advised that the doctrine of force majeure applies, which can excuse someone who repudiates a contract altogether. Because of this he did not refer Ebookers to the misconduct panel.
The decision overlooks a basic principle - that force majeure only applies where the breach is due to circumstances beyond that person's control. The sale, which created the illegality, was obviously not outside the control of Cedant.
Abta probably confused this situation with that where new legislation makes it illegal to perform a contract. The commonest example is where import or export controls are introduced and contracts to sell affected products could not be honoured.
A clause excluding liability in the event of force majeure often appears in insurance contracts and exempts the insurer in the event of major unforeseen events. After the tsunami some insurers were pilloried for relying on it to avoid helping victims.
The clauses are becoming more common in travel contracts, and could mean a tour operator escaped liability if it cancelled a holiday at the last minute because the destination airport had been destroyed. Even where there is no specific clause, events such as these can lead the courts to regard a contract as frustrated, and not award compensation against the party unable to perform.
However if, say, the damage to the airport were itself a consequence of the tour operator's negligence, frustration like force majeure would not apply.
A spokeswoman for Ebookers insisted that the matter was being dealt with "responsibly and appropriately. The question of compensation was being looked into. She would not comment on the suggestion that liability is so clear that there was nothing to look into.
Indeed, a look at the complaints that had spawned on Grumbletext.co.uk suggested that far from being responsible, Ebookers was failing to provide any meaningful information or service to those who phoned the company about the cancellations.
The claim of force majeure is made even more hopeless by the fact that the takeover occurred in February, with Ebookers taking Cuban bookings until April. While English courts still would not order a company to break US law, it could not claim it acted reasonably in taking bookings after the takeover.
The Guardian: US blockade against Cuba scuppers Britons' holidays
Tuesday May 10, 2005
The Guardian, UK
Hundreds of British travellers have had their Cuban holiday plans destroyed due to a clampdown on business with the government of Fidel Castro by Cendant, the American company that owns British travel agencies such as Ebookers, Octopus and Travelbag.
Cendant has spent the last year buying up online travel agencies around the world. But in the last two weeks, it has told all its subsidiaries to cease business immediately with Cuba, on the grounds that it could be liable for prosecution in the United States under the terms of the 44-year-old American trade embargo against the Caribbean republic.
Ebookers confirmed yesterday that it had terminated the travel plans of about 200 people, some of whom had booked under its Travelbag and Bridge the World brands.
In a statement, Ebookers said: "The position with respect to Cuba was initially unclear but once it was confirmed that certain bookings needed to be cancelled, all appropriate action including means of compensating customers was taken and communicated as quickly as possible."
Octopus said it, too, had cancelled all its outstanding bookings to Cuba. The firm has advised travellers to go via alternative websites or to contact hotels on the island directly. The travellers affected are understood to have been given full refunds, plus vouchers for future bookings of £100.
But the Cuban government condemned the move. The Cuban embassy's press counsellor, René Monzote, said: "This is awful. These people are losing the opportunity to go to Cuba."
He said Cuba was becoming increasingly popular, attracting 200,000 British tourists last year to its beaches, resorts, music and salsa culture. "Every time a company here in the UK is bought by an American company, we always have the same problems," said Mr Monzote.
Holidaymakers reacted with anger. On one internet forum, a passenger said he had made bookings in April for a trip in July to Cuba costing £533. By the time Ebookers cancelled the reservation, the only tickets available elsewhere cost more than £1,000. Many of the reservations were made after Cendant's £209m purchase of Ebookers, which was completed in January.
The Association of British Travel Agents said the takeovers of the travel agencies by Cendant amounted to an unforeseen "force majeure", giving customers little grounds for recourse.