Agreement-Based Regulation of Joint Activities in Energy and Transport Industries

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 291-298

J. Environ. Treat. Tech.

ISSN: 2309-1185

Journal weblink: ttp://www.jett.dormaj.com

Agreement-Based Regulation of Joint Activities in

Energy and Transport Industries

Sergey Yu. Morozov, Diana S. Fedotova

Ulyanovsk State University, 432017, Ulyanovsk, L. Tolstogo str., 42, Russia

Received: 22/08/2019

Accepted: 26/11/2019

Published: 20/02/2020

Abstract

The relation of transport and energy industry is not always taken into account in the legal regulation of emerging social relations.

Unfortunately, there is currently no systematic legal regulation of transport and energy industry relations, as well as no scientific

research on this issue. It is mainly due to the fact that both bachelor's and master's programs study two different disciplines "Transport

law" and "Energy law". Or worse, the educational program does not provide for such disciplines. Agreements on joint activities are

one of those unifying bases that can be form integration of regulatory material in the studied fields. The research focuses on forming a

scientific image of joint activities agreements used in the transport and energy industries. Methods The research involved system

approach, comparison, description, and interpretation, as well as theoretical methods of formal and dialectical types of logic. The

specific scientific methods included the comparative legal method and interpretation of legal norms, and legal modeling. Results This

work outlines the range of agreements on joint activities in the transport and energy sectors and make up a single integrative system.

The study reveals the common features of these agreements that give them the proper legal qualification. The legal nature of the code-

sharing agreement is defined, its independence is proved. The work involved the separation of this agreement from other types of civil

law agreements. This paper is written in a separate co-authorship. Introduction and the first part deal with the common characteristics

of the agreements on joint activities in energy and transport industries and are written by S. Yu. Morozov. The second part on the

interaction of carriers under the terms of the code-sharing agreement is written by Fedotova D. S.

Keywords: Agreements on joint activities; Agreements between transport organizations; Organizations in energy industry, Simple

partnership, Code-sharing

infrastructures; agreements between the owners of oil/gas

Introduction

pipelines; agreements regulating the interaction of the system

operator and the organization for the management of the

Federal (all-Russian) Grid Company (hereinafter-FGC);

agreements between the system operator and the subordinate

entities of the operational dispatch control; agreements

between the higher and lower entities of the operational

dispatch control; agreements on the use of electric grid

facilities belonging to FGC,

Other agreements regulating the interaction of

organizations in energy industry include the agreement on

accession to the trading system, contracts for the

implementation of operational dispatch control, the agreement

regulating the interaction of the system operator and the

administrator of the wholesale market trading system. The

transport industry also uses nodal agreements, contracts for

centralized import/export of goods, contracts between carriers

on the terms of code-sharing, contracts of simple partnership

Transport and energy sectors are two interrelated spheres

of the economy. Transport cannot operate without energy

consumption, and energy delivery is usually impossible

without transport. Thus, these areas of public relations require

unified legal regulation. This statement can also be justified by

the fact that transport law and energy law are complex

branches of legislation that regulate social relations that are

similar in many aspects. It is particularly about the agreement-

based regulation of joint activities. The freedom-of-contract

doctrine is recognized in many countries (32; 34; 36; 39). It

allows not only forming new contractual structures, but also to

study their impact on the feedback-based systematization of

law and legislation.

The range of such relations both in transport and energy is

quite wide. They include the agreements between the owners

of infrastructures. In turn, these agreements can be divided

into: agreements between the owners of transport

Corresponding author: Sergey Yu. Morozov, Ulyanovsk

State University, 432017, Ulyanovsk, L. Tolstogo str., 42. E-

mail: fgslaw@mail.ru.

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 291-298

between carriers carrying out interregional and intermunicipal

regular road transport of passengers and baggage, contracts

between carriers in transport of passengers and baggage in

direct mixed traffic, contracts of technological outsourcing of

planning processes and operational management of empty

wagons transport, etc.

The study of this legal regulation is of interest, because the

current civil law of Russia has no single definition of the

agreement on joint activities. There is also no scientifically

based classification of such agreements, there is no legally

enshrined concept of transport organization. All this creates

difficulties in the legal qualification of contracts between

transport organizations. There organizational role of

agreements (37) and the nature of organizational relations is

under discussion (30). In economic and social aspects, the

relevance of the study lies in the need to stimulate new

contractual forms of cooperation between transport and energy

enterprises in order to reduce their costs and tariffs for

consumers and expand the rendered services (16, 38).

All these features are manifested in the agreements on joint

activities between transport and energy organizations and

determines the commonality of their legal regulation. At the

same time, it is equally important to highlight the common

features of the agreements, which are typical for the regulation

of joint activities only for these two fields of activity. The

solution to this problem can also serve for unification of the

legal norms regulating similar relations.

The code-sharing agreement is an independent civil law

agreement on joint activities concluded between transport

organizations. It is a framework organizational agreement

aimed at organizing the conclusion and execution of contracts

of transporting passengers and baggage. The code-sharing

agreement is gratuitous and multilateral and cannot be

recognized as mutual. Non-personal, non-property civil

relations arise from this agreement.

Discussion

.1 General characteristics of agreements on joint activities

in energy and transport industries

.1.1 On the question of systematization of agreements on

This paper does not claim to solve all these problems, since

the research field is very wide. This work is to identify

common features of agreements on joint activities of

organizations working in the studied economic fields. In

addition, on the example of the code-sharing agreement with

blocking seats, the paper analyzes some problematic issues

related to the legal qualification of these contracts.

joint activities concluded in the transport and energy

industries.

In the civil law of Russia, among the classic agreements

on joint activity, there is a simple partnership agreement

(

article 1041 of the Civil Code of the Russian Federation –

hereinafter the CC). However, this is not the only

representative of this type. The memorandum of association

and corporate agreement (article 67.2 of the CC) also refer to

this type. E. B. Poduzova includes agreements on the

foundation of legal entity into this type (clause 1 of article 89

of the CC and clause 5 of article 11 of the Federal Law dated

February 8, 1998 #14-FZ "On limited liability companies",

clause 1 of article 98 of the CC, and clause 5 of article 9 of the

Federal Law odatedDecember 26, 1995 #208-FZ "On joint-

stock companies"). The researcher also mentions the insurance

pool and the investment partnership agreement as a kind of

partnership agreements (23). Another type of agreements is

called the intercreditor agreement (article 309.1 of CC) (24).

Experts of family law suggest that 'the family itself as an

institution of family law is nothing but a contract on joint

activity' (17).

Methods

Finding out the common features of the studied contracts

involved a systematic approach that allowed identifying the

aim of the contracts. It is directly connected with the

integrative properties of the system. Based on the properties of

communication systems, the subsystems of agreements on

joint activities in transport and energy sectors are considered

as part of a higher level system. The study of this system using

the methods of comparison and interpretation allowed to give

legal qualification to all civil law agreements on joint

activities.

Further, the study discovered that the code-sharing

agreement was one of the elements of the studied system. The

comparative legal method and method of interpreting legal

norms allowed distinguishing this agreement from contracts of

simple partnership, transportation of the passenger, chartering,

transport expedition, and contracts of agency. The method of

legal modeling was used to identify the legal structure of the

code-sharing agreement.

It should be noted that agreements on the organization of

joint activities are also applicable in the common law system.

In English law, there are partnership agreement (40, 35) and

memoranda of association (33).

.1.2 General characteristics of joint activity agreements

Agreements on joint activities have common features. All

Results

The main results of this study is definition of common

of them are aimed at achieving a common goal. Therefore,

their subject is the activity of all participants aimed at

achieving a common goal (13). The subject matter of the

contract is a priori its essential condition. Yu. V. Romanets

notes that depending on the specific purpose of the agreement,

the essential conditions can be determined on the basis of the

relevant agreement institutions (27). Thus, if the purpose of a

contract of joint activity between the owners of transport

infrastructures is to organize the performance of the transport

contract within these infrastructures, then the data on the

subject of the transport contract relating to the points of

features of the system of joint activity agreements and the

identification of the legal nature of the code-sharing

agreement. It is proved that the common features of civil law

agreements on joint activities are: 1) focus on the organization

of activities aimed at achieving a common goal; 2) dependence

of the subject of the contract on the legal institute provisions

on the contract, or on the legal entity, or on the subject

organization (the relationship of organizational and organized

legal relations); 3) organizational, non-personal, non-property

nature of the contract; 4) multilateralism; 5) gratuitousness; 6)

lack of reciprocity.

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 291-298

departure and destination is important. Such activity is

organizational since it is about organization: voting at the

general meeting; incorporation of a legal entity; conclusion or

performance of civil contracts; other property and non-

property relations. In this regard, it seems reasonable that such

treaties are organizational (6, 23). The consequence is the

recognition of legal relations arising from organizational

contracts as non-property.

the code-sharing agreement. In their vast majority, such

contracts are used in air transport, but in Germany they may be

concluded between railway and air carriers. This became

possible because of the active position of Deutsche Bahn on

the organization of interaction with many well-known air

carriers.

Frequent is the picture when the scoreboard at the airport

displays information that several airlines fly on the same route

at the same time.

The whole essence of organizational legal relations is that

they are aimed at organizing and streamlining other civil law

relations that would arise in future. Even when the terms of the

agreement and the requirements of the legislation require joint

actions to make contributions, such activities do not change

the overall focus of the joint activity agreements (11).

Moreover, the organizational legal relations arising from the

agreement on joint activities are not only non-property, but

also non-personal. The legal literature expresses an opposite

opinion. S. P. Grishaev believes that the rights and obligations

of the parties in the simple partnership agreement are either

personal or property in their nature (13). This statement can be

argued since there is no inseparable link with the identity of

the rights and obligations of the parties with the agreement.

The existence of a common goal among the parties to the

agreement on joint activities justifies their multilateral

character. At the same time, the division of agreements into

unilateral, bilateral and multilateral is made not by the number

of parties to the agreement, but by the mutual 'location' of civil

rights and obligations. Thus, an agreement is unilateral not

only because it has a one party, but this is impossible because

the agreement needs a counterparty. Multilateral agreements

differ in that the rights and obligations of the parties are

unidirectional, while those of bilateral agreements are

reciprocal.

The term 'code-sharing' refers to the exchange of codes.

These are the codes assigned to each airline by the

International Air Transport Association (IATA) (note 1).

These two-character codes make it possible to personalize air

carriers, and their receipt is one of the prerequisites for the

international passenger traffic. They can be seen in the

numbers of tickets as the first characters. So, the widely known

code S7 is rated to S7 Airlines (former Siberia airlines).

According to IATA Resolution #762, the codes are allocated

by the Association's headquarters in Montreal.

The provisions of the Warsaw (note 2), Guadalajara (note

3) and Montreal (note 4) conventions regulate the relationship

between air carriers in the organization of joint carriage of

passengers and baggage and determine the legal status of

contractual and actual carriers. At the same time, the actual

carrier is the one that directly performs transportation. The

contract carrier (the carrier under the contract) enters into

contracts for the transportation of passengers and baggage, but

it may not be engaged in rendering services for the delivery of

passengers to the point of destination. Thus, the passenger may

not be transported by the airline specified in the ticket. It

implements the classical pattern of imposing obligations on a

third party by the debtor, where the contractual carrier acts as

the debtor, and the actual carrier acts as a third party.

G. F. Shershenevich has described this situation in the

following way: 'numerous members of the partnership

agreement are not divided into two parties (active and passive)

but all are in the same legal position. Each party in relation to

all other parties has rights and responsibilities, being both

active and passive subject' (31). I. V. Eliseev reasonably notes

that in such a contract 'neither of the parties has the right to

demand the performance of himself personally and,

accordingly, should not perform (the obligations) directly in

respect of any other party' (12). This circumstance is not taken

into account by S. P. Grishaev. He believes the simple

partnership agreement is bilateral and mutual (13). A

multilateral agreement on joint activities may also be

concluded between the two parties.

Meanwhile, agreements on joint activities are described by

the presence of rights and obligations of each participant. In

fact, this is their difference from the cases of plurality of

persons on the side of the creditor. Thus, V. V. Vitryansky

notes that the agreement between the co-owners concluded by

virtue of clause 6, article 356 of the CC doesn't form any

simple partnership agreement (10).

International Civil Aviation Organization (ICAO) also

regulates the exchange of codes between airlines (note 5). In

Chapter 4.1. of document #9626 'Guidelines for the regulation

of international air transport' issued in 2004 by virtue of the

resolution of the Assembly of the Association provides for the

possibility of concluding agreements on joint use of codes, 'i.e.

the use of the code designation of a flight of one air carrier for

a flight operated by a second air carrier, while the flight is

usually defined (and may need to be defined) as a flight

operated by a second air carrier' (28).

Code-sharing agreements give a lot of advantages to both

carriers and passengers. For carriers, at zero cost, the market

for providing transport services is increasing. Due to the

expansion of the route network, it is possible to operate the

capacity of aircraft, increase the number of flights without

increasing the number of aircraft on the line. Other advantages

include: the use of well-known brands and increasing the

recognition of little-known air carriers, building more flexible

logistics schemes, free advertising, allowing to increase brand

awareness, reduce operating costs, etc. As for the passengers,

as S. A. Kmit' believes, they get the opportunity to reduce the

flight time for connecting flights, they do have not check in

additionally for transfers, the price for transportation is

reduced due to discounts and special offers, increased comfort

during transfers through the joint use of air carriers of air

infrastructure, booking tickets for a convenient flight preferred

airline are also such advantages (25).

4.2 Interaction of carriers on the terms of the code-sharing

agreement

.2.1 Notion and types of code-sharing agreement

One example of the joint activities of transport

organizations is the interaction of carriers under the terms of

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 291-298

Usually there are several types of code-sharing

agreements:

not to see a number of fundamental differences between the

two agreements.

Block code. The contract contains a condition according to

which the contract carrier blocks a certain number of passenger

seats on the flight of the actual carrier and sells tickets for these

seats at a surcharge and under its code. The risk that tickets for

blocked seats would not be redeemed is borne by the

contracting carrier, which in any case reimburses the actual

carrier for the cost of transportation. The actual carrier shall

bear all costs of the flight.

Access to booking seats on the partners' flights. The code-

sharing agreement contains a condition on the possibility of

the cooperating companies' access to booking seats on the

principle of free sale, with the determination of the number of

seats of each of the partners and the deadline for the sale end.

The flights in this case are carried out under a double code.

The order of income distribution is carried out in accordance

with the terms of the contract.

This type of code-sharing can be carried out according to

the principles of free flow corridor and limited flow. In both

cases, the data exchange on sold tickets takes place in real time

without reference to specific locations to any of the contracting

airlines. However, in case of the free flow corridor, the number

of sold seats is not limited, and in case of a limited flow, the

contract contains a condition on the maximum number of

tickets for partners.

First, the code-sharing applies only to regular transport on

a schedule set by the carrier, while the charter flights are non-

regular. Regularity of transportation is a significant feature for

determining the legal nature of code-sharing.

Secondly, the charter provides for the payment of freight,

and code-sharing is free of charge. Even if a particular

agreement provides for the condition of payment to the

contract carrier, it is about the income distribution between

carriers received from joint activity, i.e. on the distribution of

money received from the passengers. No carrier pays to other

carrier according to the code-sharing agreement. There is an

opinion that the code-sharing is 'a veiled form of payment of

compensation for the granted right to operate flights on the

airline' (8). In fact, the actions of the contracting carrier to

reduce the granting of the right to fly to the actual carrier seems

wrong. It is not a question of granting a right, but, on the

contrary, of imposing an obligation on a third party, as well as

a prohibition to provide seats on the flight to passengers who

have not concluded a contract of carriage with a contractual

carrier. The assignment of the right of claim is also out of the

question in the absence of an assignable claim.

Third, the chartering agreement allows the possibility of

coincidence of the charterer with the passenger in person. Only

carriers participate in the code-sharing agreement.

Code-sharing agreement with the condition of transfer of

passengers on connecting flights. This scheme is implemented

when each of the airlines carries passengers and baggage on

their own segment of the path. Thus the transfer of passengers

occurs without re-registration in the place of flights

connection.

Each of these types of code-sharing agreements deserves

attention in terms of their legal qualification. However, the

first type of contract that contains a condition of blocking seats

is the most interesting. Let us consider it in detail. Before

talking about a particular case, it seems appropriate to identify

common legal features typical to all code-sharing agreements.

There is no doubt that the legal relations arising from the

code-sharing agreement are of a civil nature. First, they are

governed by the method of legal equality of the parties.

Secondly, this work studies the regulation of property social

relations included in the subject of civil law.

There are different opinions about the possibility of legal

qualification of this contract as a lease of vehicles with the

crew, the contract of chartering, the contract of carriage of

passengers and baggage, the contract of simple partnership, or

a special type of organizational contract. It seems that a

comparative analysis of the code-sharing agreement with these

types of contracts will possibly reveal its subject matter and

the most significant features. Then it will be possible to draw

a conclusion about the legal nature and type of the contract.

Fourth, the chartering agreement is a bilateral agreement,

where the interests of the parties are counter, while the code-

sharing agreement is a multilateral agreement.

Fifth, the chartering contract does not imply the

organization of conclusion and performance of other contracts

in future. The obligation to deliver the passenger and their

baggage to the destination arises directly from the charter. By

contrast, a code-sharing agreement does not create an

obligation to transport and is of an organizational nature. In

order to perform such agreement, it is necessary to conclude

separate transport contracts with passengers.

4.2.3 The correlation of the code-sharing agreement and the

partnership agreement

One of the proposed variants of the legal classification of

the code-sharing agreement is its recognition as simple

partnership agreement (joint venture agreement). In

accordance with article 1041 of the CC, under this contract two

or some persons (companions) undertake to connect the

contributions and jointly act without creating a legal entity for

making profit or for other legal purpose. At first glance, the

code-sharing relations of airlines fully fit into the framework

of the simple partnership agreement, which simultaneously

regulates the organizational and property relations (6).

The partnership agreement in one form or another has been

used in transport for a long time. A. I. Kaminka believed that

the basis for such entity as Naryshkinsky Railways is a

contract of partnership (18). The similarity of the considered

agreements is that in the contract of a simple partnership and

in the code-sharing contract there is no antagonism of the

interests of the parties. They are unidirectional and converge

at one point (22). Therefore, these agreements are always

multilateral (11). The single (common) goal is seen in the fact

that 'neither of the parties has the right to demand the

4.2.2 Delineation of the code-share agreement from the

chartering agreement

According to experts of Moscow State University named

M. V. Lomonosov and judges, the closest contractual

construction to the code-sharing agreement is the chartering

contract (14). Indeed, there is some similarity because both are

about the capacity of the vehicles. However, it is impossible

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 291-298

performance of himself personally and, accordingly, should

not perform (the obligations) directly in respect of any other

party' (12). It is impossible to clearly distinguish an active and

a passive parties (11). If the goals of the parties to the code-

share agreement may be presented as the organization of

performing contract of carriage of passengers and baggage,

then there is no conflict of interests of the parties, and the

interests of the parties are unidirectional.

All of the above allows concluding that the code-sharing

agreement is not a simple partnership agreement. A simple

partnership agreement is not the only agreement relating to

joint venture agreements. Therefore, it seems that the code-

sharing agreement is one of the types of the agreement on joint

activities.

S. A. Kmit' suggests to differentiate code-sharing

agreements and passenger transportation agreements as a kind

of transport contract of passengers and baggage (19). His

statement is based on the decision of the Federal Arbitration

Court of the Moscow district dated 15.08.2014 in the case

#A40-125605/13. It states that the agreements on the joint use

of flights services are not services for the transportation of

passengers and the norms of current legislation. This work

states that this position is not fully justified. On the one hand,

it should be agreed that both the actual and contractual carrier

are involved in the provision of services to the passenger under

the transport contract. On the other hand, this statement

concerns the relationship of carriers with the passenger and

does not explain the sence of the contractual relationship

between the carriers themselves.

The actual carrier provides transport services to the

passenger, but not to the contractual carrier. The carrier doesn't

move anywhere under the code-sharing agreement. It is

obvious that the contracting carrier does not purchase tickets

in order to be delivered to the destination by the actual carrier.

On the contrary, it is engaged in selling tickets to passengers.

Therefore, the conclusions of the Supreme Court of the

Russian Federation, made in the Determination of 30.07.2015

in the case # A40-140893/2013 that the essence of the code-

sharing relationship assumes that under this agreement, its

parties do not provide transportation services directly to each

other, are correct. The actual recipient of the service is the air

passenger (note 6).

It should be noted that the relationship between the debtor

and the third parties involved in the performance of their duties

under the contract (subcontractors, subcontractors, co-carriers,

etc.), are based on an organizational civil law contract, which

in the opinion of V. A. Belov is a framework (4). An example

is a nodal agreement between carriers of different means of

transport for the performance of the debtor's duty to deliver the

goods to the destination point. A good example is the statement

of A. G. Bykov, D. I. Polovinchik and G. P. Savichev that

nodal agreements 'are one of the types of organizing transport

agreements, the task of which is to determine the order of

relations between transport enterprises at transshipment

points. These relations do not regulate the transport relations

with shippers and consignees that send and receive goods in a

direct mixed traffic' (7). From the point of view of G. B.

Astanovsky, nodal agreements are organizational in nature and

regulate internal relations of transport organizations (2). V. V.

Vitryansky (9), S. Yu. Morozov (21), B. I. Puginsky (26) and

others insist on considering the nodal agreements to be

organizational.

Speaking about the differences between the two types of

contracts, it should be noted that the secondary (subordinate to

the main) purpose is only present in the contract of simple

partnership. The code-sharing agreement has no secondary

goal. The question if the focus 'on creating an appropriate

entity that is not a legal entity' (5). Transport organizations at

the conclusion of the code-sharing agreement do not pursue

the goal of creating some kind of non-subject entity. The lack

of legal personality of a simple partnership leads to the fact

that 'in terms of societas, there can be no claims and debts of

the partnership in itself, but there are only debts and claims of

individual partners' (3). This statement about societas (made

by Yu. Baron), which meant partnership contract in Roman

law, is significant for distinguishing the contract of partnership

from a code-sharing agreement. Under a simple partnership

agreement, a third party may submit claims only to the person

with whom the transaction was concluded or to all partners

specified in the power of attorney. Under the agreement on the

assignment of duties to a third party, the debtor is responsible

to the creditor for the actions of a third party.

Secondly, an indispensable feature of a simple partnership

agreement is the investment club of the partners. In respect of

each partner, this duty is established directly; the condition of

the agreement on the amount of deposits is very significant. V.

S. Em and I. V. Kozlova reasonably note that the contract in

which participants do not form the property at the expense of

deposits (by this making their common share property), do not

bear the expenses and losses from the common business. They

also do not distribute the obtained results among themselves

and cannot be qualified as the contract of simple partnership

(

11, 20).

Is there an investment club of air carriers', and if so, what

is the contribution to the common property? This work sticks

to the point that there is no investment club. Even assuming

that the actual carrier contributes property rights to the blocked

passenger seats as a deposit, and the contractual carrier

contributes, for example, its business reputation, then the

whole thing is not about investment clubs. First, there is no

segregation of deposits, there is no separate accounting.

Secondly, the profit is not distributed among the participants

in proportion to the contribution. Third, the deposits are not

assessed. The rules on the allocation of shares is inapplicable

too.

Third, there is no fiduciary relationship between the parties

to the code-sharing agreement, which is a characteristic feature

of the simple partnership agreement. For this reason, personal

non-property relations do not arise from the code-sharing

agreements.

Internal contractual legal relations between the contractual

and actual air carriers are also focused on organizing the

performance of obligations within the framework of another

(external) legal relationship arising from the contract of

transportation of passengers and baggage. Thus, a third party

Fourthly, unlike the partners in the simple partnership

agreement, the parties to the code-sharing agreement are not

responsible for their own property.

(

the actual carrier) should be considered as a party to the

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2020, Volume 8, Issue 1, Pages: 291-298

internal organizational relationship, in which it is opposed by

the contractual carrier. Simultaneously, it is a party to the

initial (organized) legal relationship for the transportation of

passengers and baggage. It is this legal relationship between

the internal and external legal relationship that V. K. Andreev

points out (1).

The organizational legal relations arising within the

framework of the code-sharing agreement are of non-personal

non-property nature. At least, this concerns paying for

transportation. In any case, transport services are paid by the

passenger, not by transport organizations. The latter can only

transfer money received from the passenger to each other (9,

attract passengers for transportation, representing the interests

of the actual principal carrier to passengers.

First, it should be noted that the agent provides services for

a fee, while the contractual carrier does not provide any

services under the code-sharing agreement and does not

receive money for it. The view that the contracting carrier

receives an agency fee in the form of the difference between

the price paid by the passenger for the carriage and the part of

that price paid to the actual carrier is wrong. The actual carrier

does not pay any money to the contractual carrier, the parties

only distribute the money received from the passengers.

Secondly, the agreement on assigning the obligation to a

third party has the opposite scheme of mutual rights and

obligations to the agency agreement. If the code-sharing

contract is viewed as a contract for the assignment of

performance of obligations to a third party, the contractual

carrier (debtor) imposes on the actual carrier (third party) the

performance of its duties. If it would be possible to classify the

code-sharing agreement as an agency contract, the actual

carrier would be considered as lender, and the obligations

would arise from the contractual carrier. Once again, the paper

emphasizes that in the code-sharing agreement it is impossible

to clearly identify the active or passive party.

Third, in the agency agreement, the agent, as a rule, is not

responsible for the execution of the transaction by a third party,

and in the agreement on the assignment of obligations of the

debtor to a third party, the original debtor is responsible to the

creditor for the actions of third parties.

Fourth, under the agency agreement, the agent transfers all

received transactions with third parties to the principal. In the

code-sharing agreement, the parties decide how to distribute

the funds received from the passenger.

29). Only income received from passengers, which is

sometimes wrongfully referred to as remuneration, is

distributed between carriers under the code-sharing

agreement. For example, the terms of the contract may provide

that the actual carrier gets only the money for meals and

passenger fee, while 90% of the ticket price remains with the

contractual carrier and is its 'remuneration'. Thus, there are

practices of using this scheme in Aeroflot airlines (contract

carrier) and Delta Airlines (actual carrier) when making a

flight from New York to Moscow. In fact, the remuneration is

out of the question, and along with the organization of civil-

law relationship, there is no additional contractual relationship

for the provision of property benefits. The code-sharing

agreement is always gratuitous.

Unlike the contract of transportation of passengers and

baggage, the subject of code-sharing contracts is not rendering

services. However, the recognition of the studied agreement as

an organizational contract raises the question about the

possibility of applying the design framework for this type.

4.2.4 Dividing the code-sharing agreement from the

transport expedition agreement and the agency agreement

There are certain similarities between the code-sharing

agreement and the transport expedition agreement. They lie in

fact that the contractual carrier, as well as the freight

forwarder, performs representative functions. However, the

code-sharing agreement cannot be a kind of transport

expedition agreement for the following reasons.

First, the services provided under the transport expedition

contract are related to the transportation of cargo, not to the

transportation of passengers and baggage. Although there are

the reasonable proposals to expand the scope of the contract of

transport expedition, the legal validity indicates the limitation

of the scope of the freight forwarder.

Secondly, the parties to the code-sharing agreement are

transport organizations, while in the contract of transport

expedition either the consignor or the consignee always acts as

the client.

Thirdly, the code-sharing agreement is a multilateral

organizational agreement, while the contract of transport

expedition is a contract for the provision of services and can

be qualified as bilateral and reimbursable.

4.2.5 Dividing of the code-sharing agreement from the

escrow agreement

Some similarities with the agency agreement and the

condition of blocking seats give some similarity to the code-

sharing agreement with the escrow agreement. It provides for

the blocking of transferred property for storage by the escrow

agent before the circumstances stipulated by the contract. The

similarity is in the fact that both contracts can be classified as

a contract in favor of a third party (15).

One can assume that contract between the actual and the

contractual carrier, which provided for a condition of blocking

seats, should be regarded as a contract of carriage with a

conditional deposit of property rights (escrow). At the same

time, the assignment of duties to provide the transportation of

passengers and baggage to a third party is complicated by the

service of escrow. Contract carrier in this agreement could be

the escrow agent, blocking (consigning) the rights of

passengers (beneficiaries) to the occupation of seats on the

flight undertaken by the aircraft of the actual carrier (bailor).

Neither the actual carrier nor the passenger may exercise the

right to take seats on the flight. Blocking occurs before the

occurrence of the bases provided by the contract between the

transport organizations. Such bases are the actual composition

consisting of a sequence of two legal facts: passenger seat

reservation and ticket purchase.

Fourth, the code-sharing agreement organizes the

transportation of passengers itself, not the related services.

It is necessary to study the possibility of legal qualification

of the code-sharing agreement as an agency contract, in which

the contractual carrier performs the functions of an agent to

However, this is only a hypothesis, which is not confirmed

by the following circumstances.

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 291-298

First, the escrow agreement applies when there is no trust

between the beneficiary and the depositor. The code-sharing

agreement, on the contrary, is aimed at cooperation.

Second, the escrow contract is signed by three persons:

beneficiary, escrow-agent and depositor (clause 1 of article

5. ICAO International Civil Aviation Organization - is a

specialized Agency of the United Nations, established by

the Convention on international civil aviation in Chicago

07.12.1944. Legal reference system Consultant-Plus.

6. The definition of Judicial Board on economic disputes of

the Supreme Court of 30.07.2015 in the case of N 305-

КГ15-3206, A40-140893/2013. Legal reference system

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926.1 of the CC) (10). This is due to the fact that this

agreement is a way to ensure another contractual obligation to

transfer property. Therefore, the obligation arising from the

escrow agreement is accessory. In most cases, two carriers are

enough to sign a code-sharing agreement.

Third, the contractual carrier does not receive agency fees

from the actual carrier, and even more so from the passenger.

In the escrow agreement, the agent receives remuneration from

both the beneficiary and the depositor.

Fourth, if it was the beneficiaries who are to recognize

passengers under the code-sharing agreement, the acquisition

of their right to transport would have been burdened with a

condition. This is contrary to the legal nature of not only the

code-sharing, but also the contract of transportation of

passengers and baggage.

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[

framework organizational agreement on joint activities

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