G.R. No. 92288 - British Airways, Inc. vs. Court of Appeals

On February 15, 1981, First International Trading and General Services Co. (private respondent), a licensed domestic recruitment agency, received a telex from its principal, ROLACO Engineering and Contracting Services in Jeddah, Saudi Arabia, to recruit Filipino contract workers.
In early March 1981, the principal prepaid airfare tickets for 93 workers through British Airways, Inc. (petitioner), with instructions to transport these workers to Jeddah on or before March 30, 1981.
Private respondent instructed its travel agent, ADB Travel and Tours, Inc., to book the 93 workers with petitioner, but petitioner failed to transport them, compelling private respondent to borrow P304,416.00 to buy tickets from other airlines, evidenced by various cash vouchers.
Visas for the workers were valid only for 45 days, and regulations mandated deployment within 30 days, creating urgency for timely transportation.

In early June 1981, petitioner again received a prepaid ticket advice for 27 workers. Private respondent booked these workers with petitioner. Petitioner confirmed only 16 seats for the June 9 flight; only 9 boarded, and 7 bookings were canceled without prior notice.
The 7 workers were rebooked to July 4, combined with 6 other workers, but these 13 bookings were again canceled—and rebooked to July 7, 1981.
On July 6, private respondent paid required travel taxes, but petitioner confirmed seats only for 12 workers for the July 7 flight; these seats were also canceled without notice.
Ultimately, private respondent purchased tickets from other airlines to send the workers to Jeddah.

Private respondent sent demand letters to petitioner seeking compensation for damages incurred due to petitioner’s failure to transport the workers.
On August 8, 1981, private respondent received a message from its principal canceling the hiring of the remaining workers due to delays in their transportation.

On January 27, 1982, private respondent filed a complaint for damages against petitioner before the Regional Trial Court.
Petitioner claimed no contract of carriage existed since no tickets were issued—only prepaid ticket advices (PTAs)—and that the booking failures were due to limited space and no-shows by some workers or travel agent cancellations.
Petitioner admitted that on July 6 its computer system failure caused cancellation of the 12 workers’ confirmed seats and that petitioner attempted to reinstate bookings but no seats were available.

Trial court ruled in favor of private respondent, awarding actual damages of P308,016.00, moral damages of P20,000.00, exemplary damages of P10,000.00, 30% attorney’s fees, and costs.
Petitioner appealed, and the Court of Appeals affirmed the decision and denied petitioner’s motion for reconsideration.
Petitioner then filed this petition for review on certiorari to the Supreme Court.

Whether there existed a valid and perfected contract of carriage between petitioner and private respondent’s contract workers despite no formal tickets being issued.
Whether private respondent had a cause of action against petitioner for damages based on petitioner's failure to transport the workers.
Whether private respondent was entitled to actual damages despite having been reimbursed by its principal for expenses incurred in purchasing airline tickets and paying travel taxes.
Whether moral and exemplary damages were properly awarded due to petitioner’s failure and bad faith in performance of its obligations.
Whether petitioner’s counterclaims for damages were valid despite lack of timely assertion.