Carriage by Air

Application of Conventions

There are a number of different regimes applicable to air transport depending on whether the relevant states have ratified and implemented the particular Convention or or an amendment or protocol to it.

Where the place of departure and destination under the contract or carriage are in two States party to the original Warsaw Convention or in a territory of a single such State, even with an agreed stopping place outside that State, the (original) Warsaw Convention applies. There are exceptions for carriage with a view to establishing a regular line of air navigation and in extraordinary circumstances outside the normal scope of the carrier’s business.

When, under the contract of carriage, the place of departure and destination are located in the territories of two States both of which are parties to the amended WarsawConvention or in the territory of a single State party to the amended Convention even with a stopping place outside an amended Convention State, the amended Convention applies.

Warsaw Convention

The Warsaw Convention 1924 provides for the legal liabilities and relationships between air carriers and passengers as well as cargo consigners and consignees between States who have adopted it and made it part of their domestic law. The Convention has been amended by a number of amendments and protocols in 1929, 1955, 1962 and 1975 and 1999 which have been ratified by most States.

Carriage by air relates to the period when the cargo is in the charge of the carrier and not just the period when they are in the air or within the bounds of an airport. The carrier’s liability is uniform and limited throughout this period.

Liability and Limits on Liability

The carrier of goods by air is liable without proof of negligence for destruction or loss of damage to or delay of cargo during the carriage by air. The Air Transport and Navigation Acts create a statutory right of action. There are some narrow defences.

The carrier cannot contract out of his liability or contract for a lower limit of liability. In return for this, the carrier can rely on the benefit of maximum limits on its liability.

The maximum liability is 17 SDRs per kilogram or the value declared by the shipper for which a supplementary charge has been made. The liability arises only to the extent that the claimant can prove that loss.

SDR refers to special drawing rights and is converted into domestic currency value at the time.

Exemptions from Liability

The carrier is not liable for damage / loss caused by delay if it proves that

it has taken all necessary steps to avoid the damage / loss, or if it is impossible for him to take those measures
an inherent vice in the cargo,
defective packaging,
act of war
act of public authority

Claims against Carriers I

The right to claim rests primarily with the consignor. In certain circumstances, it vests in the consignees.

A complaint / claim must be made in writing within the specified time limits in the case of damage to goods and delay. A legal action must be taken within two years where necessary.

Where there are a number of carriers, there are various scenarios as to which is liable. Generally, the consignor may claim against the first carrier and the carrier in whose custody the loss or damage occurred. The consignee may claim against the last carrier and the performing carrier. The owner of the goods may claim against the performing carrier.

The contracting carrier is that, which as principal contracts for carriage with the consignor. This will often be the first or only carrier but may be a party who sub-contracts all or most of the carriage.

The successor of the carrier is deemed to be party to the original contract insofar as it is relevant to the carriage performed under its supervision. The actual carrier is, one who is neither of the above, performs the whole or part of the carriage.

The first carrier, the performing carrier and the last carrier are jointly and severally liable to the consignor and the consignee. The contracting carrier is liable for the whole of the carriage. The actual carrier is liable for the part of the carriage performed by him.

Complaints may be made, and actions may be brought against either the actual carrier or the contracting carrier or against both together or separately.

Acts and omissions of the actual carrier including its employees and agents are deemed to be those of the contracting carrier and vice versa. Their employees and agents enjoy the limits on liability.

The actual carrier’s liability cannot exceed 17 SDR per kilogram by reason of

any act or omission of the contracting carrier
any special agreement entered into by the contracting carrier or
any special declarations of value made unless, in the last two cases, the actual carrier has agreed to be bound.

Air Waybill

The document of carriage by air is usually the air waybill. The carrier may require the consignor to make out a separate air waybill for each package. Its absence or loss does not negate a contract nor affect the application of the Warsaw Convention. The AWB is not a document of title.

An air waybill must be in three original parts and handed over with the goods. The first part is marked “for the carrier” and is signed by the consignor. The second part is marked “for the consignee” is signed by the consignor and the carrier. It accompanies the goods. The third part is signed by the carrier and given to the consignor after the goods have been accepted for carriage.

The consignor must furnish the additional information and documents necessary for customs and regulatory purposes before the goods can be delivered to the consignee. The consignor is liable to the carrier for any loss due to the absence or irregularity of such documents or their contents.

Requirement for Limitation of Liability

If the carrier accepts goods without an air waybill or if the air waybill does not contain any of the following then he cannot take advantage of the provisions of the Convention which exclude or limit its liability as a carrier.

the place and date of execution,
the place of departure and destination,
name and address of the consignor,
name and address of the first carrier,
name and address of consignee (if required),
nature of goods,
number of packages, methods of packing, particular marks and numbers
the weight quantity, volume or dimension of the goods
a statement that the carriage is subject to the rules relating to liability established by the Convention.

Effect of Airwaybill

The air waybill and the statements in it are prima facia evidence as to the existence of the contract, receipt of the goods, conditions of carriage, weight, dimension, packing and the number of goods. Statements as to quantity, volume or condition are not evidence thereof as against the carrier, unless stated in the consignment note to relate to apparent condition or to have been checked in the presence of the consignor.

A carrier is not liable if it can prove that the damage was caused by negligent pilotage or negligence in the handling of the aircraft or in navigation provided it, and its agent have taken all necessary steps to avoid damage. This does not apply to injury or death of passengers.

If a carrier wilfully misconducts itself, it can have unlimited liability for passengers. A carrier cannot rely on the limits on liability if his employees are guilty of willful misconduct.

For the purpose of the carrier’s limits of liability of 17 SDR per Kilo under the unamended Warsaw Convention, the weight of the damaged package applies.

Default Rights re Goods and Enforcement

Unless these provisions are changed by the air consignment note, the following rights and rules apply to consignors and consignees.

The consignor

has the right to dispose of the goods, prior to delivery to the consignee subject to production of the consignor’s copy of the note to the carrier and payment of all expenses involved
may enforce rights in its own name even if acting on behalf of others subject to fulfilment of the obligations of the consignor under the contract for carriage.

The consignee

has the right to require the carrier to hand over the goods in the air consignment note on arrival at the destination on payment of the proper charges and compliance with any conditions set out in the consignment note and
may enforce rights in his own name, subject to fulfilment of the obligations of the consignor under the contract of carriage.

Complaint and Exercise of Rights

A complaint by the person entitled to receive the goods must be made in writing immediately on discovery or within seven days of receipt. In the case of delay, the complaint must be made within fourteen days of the goods being placed at his disposal.

A legal action for damages must be brought in one of the states, a party to the Convention, either in the jurisdiction of the carrier’s ordinary residence or principal place of business or establishment in which the contract was made or the place of destination.

Amended Warsaw Convention

Under the amended Warsaw Convention, the carriage document is also the air waybill. The provisions of the original Warsaw Convention apply to it except in relation to the particulars to appear on it and the consequences of omission. The contents of the air waybill are prescribed and are less detailed.

The air waybill must contain

an indication of the place of departure and destination;
if the places of departure and destination are within a single state with one or more agreed stopping places within the territory of another state, they must be indicated;
an indication of the weight of the consignment.

Noncompliance with these requirements does not affect the validity of the contract for carriage nor the application of the Convention.

Limits on Liability

The carrier’s liability is limited to 17 SDR per kilogram unless a higher sum has been declared by the consignor. The limits do not apply if the carrier causes the damage intentionally or recklessly.

The carrier can avoid liability if he can prove that the loss of damage was the result of any of the following: –

an inherent defect or vice in the goods
defective packing other than by the carrier, his employees or agents
act of war or armed conflict
act of a public authority in connection with the entry, exit or transit

The time limits for making the initial written complaint under the amended Convention are longer

in the case of damage 14 days
in the case of delay 21 days

The defence of negligent pilotage does not apply. Employees of the carrier enjoy the same benefits and limits on liability as the carrier provided they have acted in the course of their employment. The aggregate liability of the carrier and its employees cannot exceed the applicable limit.

In reckoning the limit on liability, the weight is that of the relevant package, unless that damage affects other packages in the same waybill.

Non-Convention Cases

When the carriage of cargo is governed neither by the original nor the amended Warsaw Convention. Where the contract of carriage is made and wholly performed within one State, the law of that State applies. Where the law allows, the law chosen by the parties as the applicable law of the contract applies.

Where the place of destination is in a state which is a party to neither the original or amended Convention, and there is no agreed stopping place in another State then irrespective of the place of departure no part of the carriage can be governed by the Conventions. The non-Convention rules will apply in this case.

The non-convention rules have been applied to the carriage of mail or postal packages. This is to ensure that the sender of the package does not have a direct action without limitation of liability against the air carrier.

IATA Conditions

The IATA (International Air Transport Association) uses a common form of air bill and associated conditions of contract for many years. It is revised from time to time.

The conditions of carriage appear on the back of the particulars page.

The IATA style of waybill and conditions are used by members for interline and online carriage and also by non-members who participate in interline carriage.

The format is designed to facilitate production of a copy air bill which can be easily transmitted by electronic means. It is not a legally significant document in the same sense as a bill of lading.

The IATA conditions of contract cannot derogate from the provisions of the original or amended Conventions. In the case of non-Convention transit, a $20 per kilogram of goods limit of liability applies.

Air Transport Insurance

There are two principal methods of insurance of cargo by air.

The marine market via brokers
The aviation markets via the air waybill

The first is the more common.

Air cargo insurance usually obtained under the Institute Air Cargo Clauses. These clauses are for use with the Lloyds marine policy form and are modelled on the marine insurance institute cargo clauses, with alterations.

The standard policy provides all risk cover with exceptions. Comprehensive cover is provided only by a combination of all three air cargo clauses as follows: –

Institute Cargo Clauses (Air)
Institute War Clauses (Air Cargo)
Institute Strike Clauses (Air Cargo)

There is no uniformity of cover under air carriers air bill. Not all airlines offer it.

Under EU law air cargo insurance is compulsory for air carriers flying over the EU. The insurance must cover the cargo as well as passengers and baggage. Certain aircraft are exempted. The Regulations cover minimum levels of compulsory cover cargo, expressed in SDR.