What happened in the key case of British Eagle International Airlines Ltd v Compagnie Nationale Air France?

British Eagle was part of a scheme devised among a number of airlines and operated through IATA (International Air Traffic Association). The airlines in question often carried passengers for each other, giving rise to claims and cross-claims between them all. Rather than go to the time and expense of paying each individual claim it was agreed that each time a claim arose IATA would be notified, and IATA would keep records of all claims. Then, on a monthly basis, the claims would be netted off, leaving a net balance due either to or from each airline. Thus each airline would either be obliged to pay a sum to IATA or entitled to receive a sum from IATA each month. British Eagle entered insolvent liquidation and at that time had carried passengers for Air France (thus giving rise to a claim). Its liquidator argued that the netting scheme was unenforceable because it had the effect of removing an asset (the claim against Air France) from the assets of British Eagle. The court held that the arrangement between the airlines offended the pari passu rule.