The Proposed Montreal Convention of 1999
An Act To Replace The Warsaw Convention of 1929

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 The Presentation of Michael S. McDaniel, Esq.

27 September 2000 at Rotterdam, The Netherlands

to 190 nations assembled for the

FIATA* World Congress 2000

*International Federation of Freight Forwarding Associations

_

A Presentation of The Montreal Convention 1999

_

 A Proposal To Replace The Warsaw Convention of 1929

INDEX TO PRESENTATION:

INTRODUCTION

"MONTREAL PROTOCOL 4" IN RELATION TO "THE MONTREAL CONVENTION"

MONTREAL PROTOCOL 4 -- POLICY GOALS & MAJOR RULES

THE MONTREAL CONVENTION OF 1999 - A MESSAGE FROM PRESIDENT CLINTON

PROPOSED ARTICLE 18 -- INTERMODAL REALITY

OTHER CURRENT U.S. TRANSPORT LEGAL ISSUES IN YEAR 2000

---- Located On Our Other Pages ----
Study Guide >> A HISTORY OF THE WARSAW & MONTREAL CONVENTIONS - a road map to how our indutry evolved
REMARKS OF THE PRESIDENT OF THE UNITED STATES IN APPROVAL OF THE MONTREAL CONVENTION

Study Guide >> A DEATAILED PRESENTATION OF MONTREAL PROTOCOL 4 - the current air cargo rules you need to understand

Study Guide >> Breif Overview of MP4

Study Guide >> Full Text of The Warsaw Convention of 1929

Study Guide >> Full Text of Montreal Protocol 4

Breif Overview of MP4

Study Guide >> The Currency Values In Terms of "Special Drawing Rights." - to current date

Study Guide >> The Countryman & McDaniel Practice Guide To Montreal Protocol 4

 

REMARKS FROM MICHAEL S. McDANIEL, ESQ. OF THE UNITED STATES OF AMERICA

BEFORE THE ADVISORY BOARD LEGAL MATTERS AND AUDIENCE OF DELEGATES

AT THE CONCERT AND CONGRESS CENTRE "De DOELEN"

ROTTERDAM, THE NETHERLANDS -- 27 SEPTEMBER 2000

 

"THE MONTREAL CONVENTION OF 1999"

Good afternoon, Mr. Chairman Peter Jones, Esq., colleagues of the Advisory Board Legal Matters and Delegates to the FIATA World Congress 2000. I am honored to be here with you at Rotterdam to share exciting news for the future of our air cargo industry.

INTRODUCTION:

Over the years, I have had people suggest all manner of definitions for the "Warsaw Convention." Some have said the convention regulates International borders, while others seem to recall that the Warsaw Convention has something to do with the fair treatment of prisoners of War!

None of this is true. The Warsaw Convention serves a single purpose for the air transport indutry and the shipping public.

As anyone in the air cargo industry knows -- the Warsaw Convention of 1929 is a Treaty among nations which exclusively deals with the subject of claims standards for injury or damage sustained by cargo, passengers and their baggage. The Warsaw Convention of 1929 has governed International air related cargo and casualty claims in our industry for the past 70 years. The Warsaw Convention of 1929 has been the world standard -- until now.

RETURN TO PRESENTATION INDEX

MONTREAL PROTOCOL 4 IN RELATION TO THE MONTREAL CONVENTION

My remarks this afternoon will address (1.) Montreal Protocol 4 and (2.) the proposed Montreal Convention of 1999.

Because these two Acts are both related to the city of Montreal -- and easily confused, let me explain that:

1. "Montreal Protocol 4" is diplomatic language to describe a Fourth Amendment -- or a protocol -- to the Warsaw Convention of 1929 that happened to have been made at Montreal in 1975. Twenty four years after it's being proposed in 1975, Montreal Protocol 4 -- or MP4 -- finally became operational International law in most countries after being adopted most recently by leading trading nations such as Australia, Great Britian, New Zealand and the United States in 1999;

Study Guide >> Full Text of The Warsaw Convention of 1929

Study Guide >> Full Text of Montreal Protocol 4

Study Guide >> Breif Overview of MP4

2. "The Montreal Convention of 1999" is at this stage only a proposal for replacing the entire Warsaw Convention of 1929 with a completely modernized treaty that also happened to have been drafted at Montreal, in 1999.

To understand the proposed Montreal Covention, you must first understand MP4 . This is because the currently operational MP4 contains all of the air cargo related changes which will carry into the future with adoption of the proposed Montreal Covention.

Unfortunately, the short time we have this afternoon will not allow me to review all the exciting changes which have been brought to our air cargo industry by the Montreal Protocol 4 to the Warsaw Convention, or simply "MP 4."

Because of our press for time today, I wish to thank the FIATA secretariat and ABLM Chairman, Peter Jones for publishing our MP 4 overview article in the "FIATA Review Magazine" that each of you received with the welcoming materials for this FIATA World Congress at Rotterdam. Our feature article is entitled "MP4 Means Major Changes for Air Cargo Claims." Please study the article carefully because it is important to your business.

Study Guide >> You should carefully review our in depth analysis of Montreal Protocol 4 -- history, content & rules of use -- CLICK HERE

Study Guide >> Breif Overview of MP4

RETURN TO PRESENTATION INDEX

MONTREAL PROTOCOL 4 POLICY GOALS & MAJOR RULES

Indeed, MP4 represents the first major change to our International cargo laws since the Warsaw Convention was originally enacted in 1929.

The drafters of MP 4 sought four major policy goals:

1. To re-establish standards of the original 1929 drafters &endash; to set fair limitations of liability for the encouragement of industry growth, promoting investment and the taking of financial risks;

2. To reflect 70 years of dramatic technological change in the air cargo industry;

3. To re-establish international claims uniformity among nations with different legal systems and philosophical points of view; and

4. To re-establish a definite basis upon which insurance rates could be calculated for our industry.

Pursuit of these policy goals resulted in six major changes now found in MP 4:

1. MP4 abolishes the concept of "Willful Misconduct" as a basis for disregarding the Warsaw Convention US$20 per kilo damage limitation and commands that the official limits of liability be honored:
"The damage limit may not be exceeded whatever the circumstances which gave rise to liability."

I can think of no better language with which to make clear that honoring the damage limitation set forth on your air waybill is now absolutely mandatory &endash; regardless of outright theft, fraud or whatever means of loss might conceivably be conjured.

2. MP4 defines a new damage limitation in terms of 17 "Special Drawing Rights" per kilo of damaged frieght -- about US$23.00 today. The damage limit is no longer based upon the value of gold or a national currency in an effort to re-establish International uniformity and to discourage forum shopping.

Study Guide >> The Currency Values In Terms of "Special Drawing Rights." - to current date

3. MP4 recognizes the common law doctrine of comparative fault, a principle which essentially compares the conduct of all parties to a dispute for purposes of adjudging the percentages of culpability for each party.

4. MP4 exonerates the carrier from damages caused by (a) inherent vice of the cargo; (b) defective packaging; or (c) government acts such as cargo damage resulting from Customs examinations.

5. MP4 changes the rules regarding the duty of a claimant to produce evidence. The new rules are technical, but far more equitable than in the past.

6. MP4 allows for the use of electronic air waybills or shipments by "any means that would preserve a record of the carriage."

It is important that you understand each of these major changes for our industry.

It is equally important for you to understand that all of these changes are good for our industry and for the shipping public.

Because there are important legal caveats to the use of MP4, however, a greatly expanded & interactive guide to MP4 is located in the tutorial section of our website.

Study Guide >> You should carefully review our in depth analysis of Montreal Protocol 4 -- history, content & rules of use -- CLICK HERE
RETURN TO PRESENTATION INDEX

THE MONTREAL CONVENTION OF 1999 - A MESSAGE FROM PRESIDENT CLINTON

It is with great pride that my major announcement today brings you greetings from the office of the Honorable William J. Clinton, President of The United States of America.

I have been asked to report to this FIATA World Congress that about two weeks ago, our President approved the new "Montreal Convention of 1999" and sent it to the United States Senate for its advice and consent to adoption.

Three days later on 9 September 2000, the European Commission joined with President Clinton, recommending adoption of the Montreal Convention of 1999 by its EU member states.

Here is what you should know about the proposed Montreal Convention of 1999:

1. The Montreal Convention of 1999 is intended to replace the entire Warsaw Convention of 1929 and its six Protocols (only MP4 having been adopted by the United States).

2. The Montreal Convention is primarily designed to unify the patchwork of private airline rules dealing with passenger injury & death claim issues.

3. Fortunately the Montreal Convention would adopt all of our cargo related advances achieved under MP4;

4. Finally, the Montreal Convention takes a next step to acknowledge the truly intermodal nature of modern air carriage.

Study Guide >> The U.S. Department of State has provided a complete history of the Warsaw Convention & the Montreal Convention, along with approval remarks of President Wm. J. Clinton. CLICK HERE
RETURN TO PRESENTATION INDEX

PROPOSED ARTICLE 18 -- INTERMODAL REALITY

Under a new Article 18 of the Montreal Convention, all modes of carriage would be deemed have been by air -- and thus covered under the Montreal Convention -- if the contract of carriage reflects only intended movement in the air mode.

For example, if you book a through air move from Rotterdam to New York any ocean or road links will be considered to have been air moves -- and thus covered under the Montreal Convention -- even though the actual airport of departure was London, Heathrow.

All that will be required for this result is that the air waybill did not mention any road or ocean links. The specific language intended for Article 18 is as follows:

"If a carrier, without the consent of the consignor *, substitutes carriage by another mode of transport for the whole or part of a carriage intended by the agreement between the parties to be carriage by air, such carriage by another mode of transport is deemed to be within the period of carriage by air."
* We read "consent" to mean notice on the air waybill.

The benefits of this proposed Article 18 are obvious.

Instead of wrangling and expensive legal debate over what local law or damage limitation might apply to a cargo mishap during any particular part of an intermodal International air move -- the Montreal Convention would streamline the process by making all aspect of the move subject to one law and a uniform damage limitation of 17 Special Drawing Rights per kilo -- about US$23.00 today.

Thirty nations will need to adopt the Montreal Convention of 1999 before it begins to take effect in any single nation. Once adopted, the Montreal Convention will generally apply only where both the origin and destination countries have both adopted the new international Treaty.

Given the true benefits of this proposed convention, I believe it should become operational soon.

RETURN TO PRESENTATION INDEX

OTHER CURRENT U.S. TRANSPORT LEGAL ISSUES

I will conclude my remarks with two quick legal notes from the United States:

First, after years of occasional confusion in our system, the U.S. Court of Appeals for the Second Circuit has just reconfirmed the 50 year old rule that a "Type One Freight Forwarder" (a shipper's-agent) which only makes arrangements &endash; and does not issue a bill of lading &endash; is deemed to be a "travel agent for freight" with no carrier liability.

Study Guide >> The case is entitled Prima U.S.A. v. Panalpina . For the complete text of this case, along with a study guide - CLICK HERE.

Second, now that the proposed COGSA 1998 is at best stalled in the U.S. Senate, or at worst mortally wounded, attention must be paid to individual problems that the new U.S. ocean claims law was intended to correct. One of these problems stems from our U.S. courts having made clear that the law & jurisdiction bill of lading clauses of ocean carriers will be honored.

Thus one of our most common U.S. litigation scenarios these days is for an innocent NVOCC to be held responsible for cargo damages it did not cause.

This unfortunate result occurs after the custodial carriers such as Cho Yang, Hanjin, Hyundai and all the many others have been dismissed from a particular legal case in favor of jurisdiction in their home countries. The practical effect is to see the NVOCC left all alone in the U.S. case -- and usually complete exoneration of the custodial carrier, despite it's actual culpability.

Until there is U.S. reform on this ocean carriage issue, we recommend the Delegates consider using their own strong bill of lading clause requiring court jurisdiction in their home country.

The current U.S. situation is inequitable and intolerable. It is a disgrace that all parties should not have the right to single cases being heard in a single court, usually the destination country. I request the ABLM study this issue and lend its assistance toward finding an equitable correction.

Study Guide >> The Carriage of Goods By Sea Act of 1936 - current U.S. law.

Study Guide >> The proposed Carriage of Goods By Sea Act of 1998.

Thank you for your attention to my remarks this afternoon.

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