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The Montreal Protocol 4 To The Warsaw Convention
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Montreal Protocol 4 To The Warsaw Convention
Montreal Protocol General Overview
Montreal Protocol 4 Major Changes
Other Warsaw Articles of Importance Modified by MP4
Study Guides >>
Montreal Protocol 4 - full text
Presentation of MP4 By Michael S. McDaniel, Esq. to Air Cargo Americas Congress at Miami
Presentation of The Montreal Convention by Michael S. McDaniel, Esq. to FIATA World Congress at RotterdamWhite House Approval & Review of The Montreal Convention
Schedule of Countries Which have Adopted Various Warsaw Protocols - from IATASchedule of Countries Which Have Adopted MP4 - as of June 1999
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The Warsaw Convention of 1929 - full text
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Overview of the Warsaw Convention and the Montreal Protocol 4
The Warsaw Convention was drafted when the airline industry was in its infancy. It was the product of two international conferences, the first held in Paris in 1925 and the second in Warsaw in 1929 and four years of work by the interim Commite International Technique d'Experts Juridique Aeriens (CITEJA) formed at the Paris Conference. The Convention had two primary goals:_ To establish uniformity in the aviation industry with regard to ``the procedure for dealing with claims arising out of international transportation and the substantive law applicable to such claims,'' as well as with regard to documentation such as tickets and waybills;
_The clearly the overriding purpose was to limit air carriers potential liability in the event of accidents. The liability limit was believed necessary to allow airlines to raise the capital needed to expand operations and to provide a definite basis upon which their insurance rates could be calculated.
The nations drafting this provision had a direct interest in establishing liability limits, since nearly all existing airlines were either owned or heavily subsidized by the various contracting states. The drafters also believed that a liability limit would lessen litigation.
According to the U.S. Constitution, Art. III, ' 2; it is the duty of the court to enforce treaties of the United States whatever they might be, and the Warsaw Convention remains the supreme law of the land. The current Warsaw Convention requires that an air waybill must be made out by the consignor and must be signed and handed over, in triplicate, with the freight. Art. 6 (1). Failure to comply with Art. 6 and or particulars of Art. 8 will result in a loss of liability limits (US$9.07 per lb.)Study Guide >> The Warsaw Convention of 1929 - full text
Study Guide >> Montreal Protocol 4 - full text
The Warsaw Convention NOTE: Montreal Protocol 4 Changes
The United States has been a party to the Warsaw Convention since 1929. Generally, the Convention applies to air carriage between the territories of two High Contracting Parties to the Convention. For example, air carriage between the Untied States and England. The Warsaw Convention governs the relationships between the shipper/beneficial cargo owner and the airline or indirect air carrier. Warsaw governs shipments from airport to airport, not beyond the airport area. Warsaw requires that an air waybill must be made out by the consignor and must be "signed" and "handed over," in triplicate, with the freight. Art. 6 (1). Failure to comply with Art. 6 and/or particulars of Art. 8 will result in a loss of liability limits ($9.07 per lb.) for the airline or ICA.
The pre-MP4 U.S. Case Law suggests that a hyper-technical approach must be taken with respect to Warsaw. Warsaw is a treaty and traditional methods of judicial interpretation can only be used when the text of the treaty is unclear. [See Exim Indus. v. Pan Am. World Airways, 754 F.2d 106, 108 (2d Cir. 1985); Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 134 (1989); Tai Ping Vs. Northwest Air, (1997)].
Key Case Issues Under The Former Law Were:_ Was an air waybill issued for the subject cargo?
_ Does the air waybill receipt a declared value or insurance value?
_ Does the air waybill include all of the required particulars?
_ Are the Warsaw limits on liability enforceable?
Montreal Protocol 4 Changes
The United States has been a party to the Warsaw Convention since 1929. Generally, the Convention applies Warsaw (NOTE: Montreal Protocol 4 Changes) Major Changes to Warsaw Convention as Amended by the Hague and Montreal Protocol 4. (MP4) (Effective March, 1999). On September 28, 1998, the U.S. Senate finally ratified MP4 to the Warsaw Conventional. This amendment to the original 1929 Warsaw Convention has been pending since 1975. Some aspects of MP4 are certain, like the need for forwarders & indirect air carriers to start looking up the current value of Special Drawing Rights (SDR) to determine their limits on liability for cargo loss, delay or damage. Other issues are not so clear. While lawyers & courts will attempt to "interpret" MP4, their ability to do so will be limited by the strict construction and plain language approach utilized by Supreme Court Justice Scalia in writing his decision for the case of Chan vs. Korean Air Lines, Ltd. There are exceptions to this approach, such as ambiguity, but at what point does traditional judicial interpretation end? According to the U.S. Court of Appeal for the 2nd Circuit in "Tai Ping", (a recent Warsaw Convention case), traditional judicial interpretation ends when "the language is reasonably susceptible of only one interpretation."
Article 5 replaces language requiring that the consignor "make out" and "hand over" an air waybill with the requirement that an "air waybill shall be delivered" or that "any other means which would preserve a record of the carriage to be performed may, with the consent of the consignor, be substituted for the delivery of an air waybill." It is this change that clears the way for the use of electronic air waybills. Before MP4 it was clearly established that air carriers were required to issue a "paper" air waybill.
The Montreal Protocol No. 4, which became effective in the United States on March 4, 1999, amends the Warsaw Convention. Although the Protocol impacts personal injury and baggage claims, the summary set forth below specifically addresses those substantive changes which relate to claims for loss or damage to cargo.
1.) Limitation of Liability
The Protocol changes the maximum liability limitation from $20 kilogram to 17 Special Drawing Rights (SDR's) per kilogram. See Article 22. An SDR is a fluctuating unit of currency defined by the International Monetary Fund. As of September 13, 1999, one SDR equaled $1.37070 U.S. Dollars, thus, providing for a maximum liability limitation of $23.30 per kilogram. The U.S. conversion rate for an SDR can be found on the IMF's web page located at this hot link: SDR RATE TODAY
The Protocol expressly incorporates the 1955 Hague amendments to Warsaw. See Article I. Under those amendments, the carrier's maximum liability is based on the weight of the entire shipment if the damaged cargo affects the value of the other cargo covered by the same air waybill. See Art. 22(c) and Art. 22(b) of Hague Protocol to Warsaw. In other words, if the damaged piece is an integral part of the entire shipment, then the carrier cannot limit its liability to the weight of the damaged piece.
2.) Wilful Misconduct
Under the Protocol, proof of wilful misconduct does not deprive the carrier of the benefit of the liability limitation. Prior to this amendment, wilful misconduct provided cargo interests with the ability to avoid the limitation.
3.) Failure to Issue Waybill or List Particulars on Waybill
Similarly, failure to issue a waybill or list certain particulars on the waybill (place of departure, destination, etc.) does not prevent the carrier from benefiting from the Convention's liability limitation. See Article 9.
4.) Carriers Can Trade Electronically
The Protocol expressly provides that carriers can go paperless and trade electronically. Article 5 provides that "[a]ny other means which would preserve a record of the carriage to be performed, may, with the consent of the consignor, be substituted for the delivery of an air waybill." According to the ATA and IATA, this provision will save carriers approximately US$5-$6 per shipment.
5.) Traditional Carrier Defenses & Contributory Negligence
The Protocol adopts the traditional defenses to carrier liability. The carrier will not be liable for damages caused by 1) inherent defect or vice of cargo; 2) defective packaging of the cargo; 3) act of war and 4) an act of a public authority with regard to the entry or exit of the cargo; i.e. customs. See Article 18.
Under the Convention, contributory negligence may exonerate the carrier wholly or partly from liability only if the jurisdiction recognizes this defense. The Protocol changes this provision to provide the Carrier with the defense of contributory negligence regardless of whether it is recognized in the jurisdiction in which the action is brought.
Other Articles of Importance Modified by MP4
Articles 6 & 7 of MP4 retains the language requiring that the air waybill be "handed over"and "signed." These formalities will continue to complicate "paper" shipments and may further complicate the formalities required to "preserve a record of the carriage" in accordance with New Article 5.
Articles 8 & 9 of MP4 replaces language requiring that "the air waybill shall contain the following particulars" . . . or the carrier loses the ability to limit his/her liability. Prior to MP4, Article 8 & 9 required that stopping places for the flight be stated. Under MP4, the air waybill needs only to have "an indication of the places of departure and destination and an indication of the weight of the consignment" and if the departure and destination are within the territory of a single contracting party but stopping in another country, then and only then does the stopping place within the territory of another state need to be included. Under MP4, noncompliance with the provisions of Articles 5 to 8 does not appear to result in a loss of liability limits. (Compare with Art. 3)
Article 10 is expanded, giving greater protection to the carrier by making the consignor responsible for the correctness of the particulars relating to the cargo and make the consignor responsible for any loss or damage which an irregularity, incorrectness or incompleteness of those particulars causes to the air carrier or to any third party to whom the carrier is liable. (Dangerous Goods).
Article 11 contains a significant change by making statements in the air waybill relating to quantity, volume and condition of the cargo void as prima facie evidence against the carrier except in so far as they have been and are stated in the air waybill to have been checked by [the carrier] in the presence of the consignor or relate to the apparent condition of the cargo. This will mean that air carriers that receive unit load devices said to contain certain goods which show up short at destination without any obvious record of tampering will not automatically be the responsibility of the air carrier and a shipper may be put to his difficult proof to show the cargo's quantity and condition at origin. An air carrier will still be responsible for the stated weight and apparent condition of the cargo. Note however that cargo inside unit load devices or inside crates will not be apparent to the air carrier at time of receipt.
Article 18 of MP4 expressly adopts the traditional exceptions to carrier liability:_ inherent defect, quality or vice of that cargo
_ defective packing of that cargo
_ an act of war or an armed conflict
_ an act of public authority
MP4 also expands and clarifies the damage presumption stating that if "for the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air."
Article 22 of MP4 Changes the old damage limit of US$20.00 per kilo or US$9.07 per lb. to 17 Special Drawing Rights (SDR) a unit of currency determined by the International Monetary Fund. The new cargo liability limit will fluctuate with currency valuations and is about US$23.15 per kilo or US$10.50 per lb. (Refer to www.cargolaw.com for the current SDR exchange rate).
Article 25 of MP4 deletes the vagaries of a "willful misconduct," but allows a shipper to recover beyond the limits of liability if the claimant can prove that "the damage resulted from an act or omission of the carrier, his servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result; provided that the servant or agent was acting within the scope of his employment", but as to passengers & baggage only.
Countries Who Ratified MP4
As of June 30, 1999, the following countries have ratified the MP 4 Protocol:
Argentina .........Finland ...........Qatar
France Republic of Macedonia
Bahrain ...............Ghana ..............Senegal
Barbados ............Greece ...........Singapore
Belgium ..............Guatemala ....Slovenia
Bosnia and Herzegovina .....Guinea ..
Brazil .... Honduras .........Sweden
Canada ... Hungary ...........Switzerland
Chile ......Ireland ...............Togo
Colombia ..........Israel ....Turkey
Croatia ..............Italy .......United Kingdom
Cyprus .... Kuwait ..............United States
Republic of the Congo .........Mauritius ..........Uzbekistan
Denmark Morocco .............Venezuela
Federal Republic of Yugoslavia .............Portugal
NOTE: For Purposes of the Air Cargo Americas Conference, a full 21% of the
signatories to this is convention are states of the Western Hemisphere.
THE SAFEST COURSE:
Purchase quality air cargo insurance from your air forwarder professional and avoid uncertainty.
* The Cargo Letter does not provide legal advice applicable to specific situations. The information provided is believed generally reliable, but should be confirmed through the current text of cited laws and authorities. It is understood that all laws & authorities are subject to change without notice to the public. Where specific situations or the conduct of your busniess are concerned, it is important to consult your company attorney or advisor directly. The Cargo Letter cannnot be responsible for failure to follow these instructions.
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