A Comparitive Study of Leagl Developments in the Field of International Air Carrier Liability

8/12/2019 A Comparitive Study of Leagl Developments in the Field of International Air Carrier Liability

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Comparative Study of Legal Developments in The Field of International Air

Carrier Liability

ARTICLE FOR THE SUBJECT

AIR & SPACE LAW

SUBMITTED BY

Archit Bohra (09BAL069)

Semester X

B.A.LL.B. (Hons.)

UNDER THE GUIDANCE OF

Mr. U. VARDHRAJAN

Asst. Prof., ILNU

Submitted to

INSTITUTE OF LAW

NIRMA UNIVERSITY, AHMEDABAD

ACADEMIC YEAR (2013-14)


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Abstract

There are international laws in existence that provide a world-wide system of standards and rules for

air travel and in particular, common rules regarding minimum liability limits for the carriage of

passengers, cargo and luggage in the event of death, injury, damage, delay or loss. This project

highlights the systematic and timely development of these laws and their importance in the aviation

sector for the welfare of both the passengers and the carrier at large. The project stars with Warsaw

convention of 1929 and traces the developmental history up to the Montreal convention of 1999.


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Introduction

There are international laws in existence that provide a world-wide system of standards and rules for

air travel and in particular, common rules regarding minimum liability limits for the carriage of

passengers, cargo and luggage in the event of death, injury, damage, delay or loss. These laws werefirst agreed and introduced worldwide in 1929.

The first international law introduced is known as the Warsaw Convention (1929). Over the years,

there have been a number of changes to and reviews of the original Warsaw Convention, including

increases in the monetary liability limits. These subsequent amendments together with the original

Warsaw Convention are known collectively as the Warsaw System. Over time the liability limits

became too low by present-day standards. In addition, the laws governing airline liability become

fragmented and very confusing as some countries had not introduced all the various amendments tothe original laws.

The Montreal Convention (1999), titled theConvention for the Unification of Certain Rules for

International Carriage by Air amended the Warsaw System. It re-established uniformity and

predictability of the rules relating to the international carriage of passengers, luggage and cargo. It

provides, among other things, for:

1. Unlimited liability in the event of death or injury of passengers2. Advanced payments to meet immediate needs3. The possibility of bringing a law suit before the courts in the passenger's principal place of

residence

4. Increased liability limits in the event of delay5. The modernization of transport documents (electronic airway bills and tickets)6. The clarification of the rules on the respective liability of the contractual carrier and the

actual carrier

7.The obligation for air carriers to maintain adequate insurance

Under the Montreal Convention the liability limits are set inSpecial Drawing Rights (SDR) which is

a mix of currency values established by the International Monetary Fund (IMF). Thecurrent value

of an SDR in Euro is available on the IMF's website . The liability limits are reviewed every 5 years.
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The Warsaw system

The first convention dealing with matters related to air transport is the Convention for the

Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on 12

October 1929. It imposed liability on the carrier towards the passengers for death and bodily injury,delay of passengers as well as for damage to and/or loss of baggage. Over the years attempts were

made to increase the level of the carriers liability as set forth in the Warsaw Convention. This

resulted in several conventions: the Protocol done at The Hague on 28 September 1955, the

Convention done at Guadalajara on 18 September 1961. Further, reference should be made to the

Guatemala City Protocol 1971 and the Montreal Protocol no. 1, 2 and 3 of 1975, as well as some

private law agreements. They all intended to increase the liability limit, as the combination of

conventions and additional agreements had resulted in a fragmentation of the international law

dealing with international carriage by air. This created a situation where determining as to which

variant of the Warsaw system is applicable in a specific case became a rather complex exercise.

Passengers, and even some lawyers, could not see the wood for the trees anymore.

The Warsaw Convention is an international convention which regulates liability for international

carriage of persons, luggage or goods performed by aircraft for reward.

Originally signed in 1929 in Warsaw, it was amended in 1955 at The Hague and in 1975 in Montreal.

United States courts have held that, at least for some purposes, the Warsaw Convention is adifferent instrument from the Warsaw Convention as Amended by the Hague Protocol. In

particular, the Warsaw Convention:

1. Mandates carriers to issue passenger tickets;2. Requires carriers to issue baggage checks for checked luggage;3. Creates a limitation period of 2 years within which a claim must be brought (Article 29); and4. Limits a carrier's liability to at most:

a.

250,000 Francs or 16,600 Special Drawing Rights (SDR) for personal injury;b. 17 SDR per kilogram for checked luggage and cargo, or $20USD per

kilogram for non-signatories of the amended Montreal Protocols.

c. 5,000 Francs or 332 SDR for the hand luggage of a traveler.


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SCOPE of WARSAW CONVENTION

ARTICLE 1:

1. This Convention applies to all international carriage of persons, luggage or goods performed by

aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport

undertaking.

2. For the purposes of this Convention the expression "international carriage" means any carriage in

which, according to the contract made by the parties, the place of departure and the place of

destination, whether or not there be a break in the carriage or a transshipment, are situated either

within the territories of two High Contracting Parties, or within the territory of a single High

Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty,

suzerainty, mandate or authority of another Power, even though that Power is not a party to this

Convention. A carriage without such an agreed stopping place between territories subject to the

sovereignty, suzerainty, mandate or authority of the same High Contracting Party is not deemed to

be international for the purposes of this Convention.

3. A carriage to be performed by several successive air carriers is deemed, for the purposes of this

Convention, to be one undivided carriage, if it has been regarded by the parties as a single operation,

whether it had been agreed upon under the form of a single contract or of a series of contracts, and

it does not lose its international character merely because one contract or a series of contracts is to

be performed entirely within a territory subject to the sovereignty, suzerainty, mandate or authority

of the same High Contracting Party.

Article 2

1. This Convention applies to carriage performed by the State or by legally constituted public bodies

provided it falls within the conditions laid down in Article 1.

2. This Convention does not apply to carriage performed under the terms of any international postal

Convention.


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Object of Warsaw Convention:

The central purpose of the Warsaw Convention is to limit the liability of air carriers. The Warsaw

Convention establishes:

1. The liability of international air carriers for harm to passengers, baggage, or goods;2. Fixes limitations on such liability; and3. Achieves a degree of uniformity in documentation and in the procedures and substantive law

applicable to claims arising out of international air carriage.

There are three types of claims, set out in Chapter III of the Warsaw Convention, to which liability

attaches:

1.

Those claims based on personal injuries (Article 17);2. Those claims based on lost or damaged luggage (Article 18); and3. Those claims based on damages due to delays in transportation (Article 19).

Article 17 :

Article 17 of the Warsaw Convention sets forth conditions under which an international air carrier

can be held liable for injuries to passengers. Article 17 provides that the carrier is liable for damage

sustained in the event of a death or a wounding of a passenger or any other bodily injury suffered by

a passenger, if the accident which caused the damage so sustained took place on board the aircraft or

in the course of any of the operations of embarking or disembarking.

Thus, under Article 17, an air carrier is liable for passenger injury only when the following three

conditions are satisfied:

1. There has been an accident, in which2. The passenger suffered death, physical injury, or physical manifestation of injury, and3. The accident took place on board the aircraft or in the course of operations of embarking or

disembarking.


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Article 18:

Article 18 provides that a carrier will be liable for damage sustained in the event of the destruction,

loss of, or of damage to any checked baggage or any goods, if the occurrence which caused the

damage so sustained took place during the transportation by air.

Article 19:

Pursuant to Article 19, a carrier will be liable for damage occasioned by delay in the transportation

of passengers by air, baggage, or goods.

Pursuant to Article 25, a carrier will not be entitled to avail himself/herself of the provisions of the

Warsaw Convention which exclude or limit his/her liability when it is shown that the damage

suffered by the claimant was caused by the carriers willful misconduct, as defined by the law of theforum court.

The Warsaw Convention precludes passengers from maintaining an action for damages for personal

injury under local law when the claim did not satisfy the Conventions conditions for carriers

liability for international air transportation.

Article 29 of the Warsaw Convention provides a two-year statute of limitations. Pursuant to Article

29, the right to damages will be extinguished if an action is not brought within two years from the

date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or

from the date on which the transportation stopped.

Legal Development in The Time Period Between Warsaw and Montreal Conventions:

The Warsaw Convention of 1929 was amended on 28 September 1955 by The Hague Protocol. The

limit of liability with respect to persons had been doubled to 250,000 francs; in other respects, the

Protocol made only minor adjustments or clarifications, and contributed to some simplifications of

the documents of carriage. The Hague Protocol to the Warsaw Convention entered into force on 1

August 1963.

Formally entitled Convention Supplementary to the Warsaw Convention for the Unification of

Certain Rules Relating to International Carriage by Air Performed by a Person other than the

Contracting Carrier, a new convention was developed and signed at Guadalajara, Mexico, on 18


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September 1961; it was necessitated by the modern modalities of transport when a person was not a

party to the agreement for carriage. It entered into force on 1 May 1964.

Early in the 1960s, it became clear that the United States were not prepared to ratify The Hague

Protocol of 1955 as they considered the liability limits for carriage of persons in the said Protocol

too low. In 1965, this led the United States to announce its withdrawal from the 1929 convention,

effective as of 15 May 1966. The solution arose in the form of the Montreal Agreement of 1966,

signed on 13 May 1966 under the auspices of the International Air Transport Association (IATA).

This is not a convention or a protocol, but an agreement between the American Civil Aeronautics

Board (CAB) and the air carriers operating passenger transport with a stopping place in the USA.

Pursuant to the Montreal Agreement the airline companies adjusted their conditions of carriage and

set out that the liability limit with regard to death, wounding or other personal injury suffered by apassenger would be US$ 58,000 exclusive of legal costs and US$ 75,000 including legal costs. The

United States revoked the withdrawal from the 1929 convention at the last minute.

An inter-governmental agreement addressing the limits of liability and profoundly modernizing the

entire Warsaw Convention as amended by The Hague Protocol was reached, at the Diplomatic

Conference attended by 55 States, with the adoption of the Guatemala Protocol signed on 8 March

1971. The Guatemala Protocol contained a number of controversial points: the liability limit for

passenger claims was substantially increased and fixed limits were introduced (i.e. it is not possible to

break the limits), the force majeure defence was removed in relation to passenger claims, and the

fifth jurisdiction (i.e. the court of the place of residence of the passenger) was introduced. This

Protocol never came into force.

In 1975, another Diplomatic Conference on International Air Law was held in Montreal under the

auspices of ICAO. This resulted in the adoption of four Protocols (the Montreal Protocols of 1975)

signed on 25 September 1975 amending the Warsaw Convention, and The Hague and GuatemalaProtocols. These Protocols amended the increased liability limit found in the Guatemala Protocol,

altered the monetary measurement from gold to Special Drawing Rights, and eliminated outdated

documentary requirements with respect to the transport of cargo.


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The International Air Transport Association (IATA) convened a worldwide Airline Liability

Conference in Washington, D.C., USA, from 19 to 23 June 1995. The report of the Conference

proposed the establishment of two working groups to further study and prepare drafts for a

proposed intercarrier agreement, as follows:

1. To urgently assess and report on the cost impact on airlines of an enhanced liability package;2. To further consider and report on appropriate and effective means to secure complete

compensation for passengers, when required.

At the same conference, the draft of the IATA Intercarrier Agreement on Passenger Liability was

adopted, by which the airlines who signed this agreement would undertake to waive the liability

limits and limit the force majeure defence in regard to passenger claims. Later, the IATA Measures

of Implementation Agreement was developed and finalized.

The successive modifications of the 1929 Convention, coupled with increasing mobility of

passengers and the globalization of the air transport industry, have resulted in a high level of

complexity and fragmentation of the Warsaw System, and a corresponding loss of relevance for the

travelling public and the air transport industry. The above developments finally led to the ICAO

seeking to draw up a new convention to replace the Warsaw System. The ICAO Legal Committee,

at its 30th Session held in Montreal from 28 April to 9 May 1997, approved the text of a draft

Convention for modernizing the Warsaw System of air carrier liability, to be adopted later by a

Diplomatic Conference.

At the International Conference on Air Law held in Montreal from 10 to 28 May 1999, the

new Montreal Convention, formally entitled Convention for the Unification of Certain Rules for

International Carriage by Air, was signed on 28 May 1999. This new convention, intended to replace

the above-described Warsaw System, came into force on 4 November 2003. The obvious innovation

is that the Montreal Convention now presents a single legal instrument, instead of a patchworkprovided under the antiquated Warsaw System (i.e. a collection of six different legal instruments).

Some 525 participants from 121 Contracting States, one non-Contracting States and 11 international

organizations took part in this historic three-week conference.


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The Montreal Convention 1999:

The limits of liability as set by the Warsaw system were increasingly considered to be widely

insufficient when compared with todays economic and social standards. As a result, further

attempts were made to increase the liability limits. Moreover, the need was felt to have the Warsawsystem reviewed and revised into a more uniform system. This resulted in the Convention for the

Unification of Certain Rules for International Carriage by Air, signed at Montreal on 28 May 1999.

The Montreal Convention has radically changed the Warsaw system as it concerns the liability limits

in case of death and injury : under the Montreal Convention there is a regime of unlimited liability of

the air carrier in the event of death or bodily injury of a passenger, partly even as strict liability. It is

important to note that the Warsaw system still exists alongside the Montreal Convention, as by now

approximately half of the states (some 78) that ratified the Warsaw system in one or more of its

variants have ratified the Montreal Convention.

The Montreal Convention, formally the Convention for the Unification of Certain Rules for

International Carriage by Air, is a treaty adopted by a Diplomatic meeting of ICAO member states

in 1999. It amended important provisions of the Warsaw Convention's regime concerning

compensation for the victims of air disasters. The Convention re-establishes urgently needed

uniformity and predictability of rules relating to the international carriage of passengers, baggage and

cargo. Whilst maintaining the core provisions which have successfully served the international air

transport community for several decades (i.e. the Warsaw regime), the new convention achieves the

required modernisation in a number of key areas. It protects passengers by introducing a two-tier

liability system and by facilitating the swift recovery of proven damages without the need for lengthy

litigation.

The Convention for the Unification of Certain Rules for International Carriage by Air drafted in

Montreal (Montreal Convention) amended the Warsaw Convention.

Pursuant to the Montreal Convention, a carrier is liable for damage sustained in case of death or

bodily injury of a passenger upon condition that the accident which caused the death or injury took

place on board the aircraft or in the course of any of the operations of embarking or disembarking.

The Montreal Convention applies only to international carriage of persons, baggage, or cargo that


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originates in the territory of one of the states party to the Convention and terminates in that of

another.

In comparison to the Warsaw Convention, the Montreal Convention has been described as a treaty

that favors passengers rather than airlines.

The Montreal Convention provides four grounds upon which a court may base its jurisdiction. A

plaintiff may bring an action in the U.S. for damages pursuant to the Montreal Convention only

when the U.S. is:

1. The domicile of the carrier;2. The principal place of business of the carrier;3. The place where the carrier has a place of business through which the contract has been

made;

4. The place of destination; or5. The principal and permanent residence of the passenger.

The liability regime of the Montreal Convention

Article 17( liability for death and bodily injury):

Article 17 (1) of the Montreal Convention reads as follows:

The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon

condition only that the accident which caused the death or injury took place on board the aircraft or

in the course of any of the operations of embarking or disembarking.

It is stated in article 21 (1) of the Montreal Convention that the carrier shall not be able to exclude

or limit its liability with regard to damages arising under article 17 (1) and not exceeding 100.000

Special Drawing Rights. This implies that up to this amount the Montreal Convention imposes strict

liability on the carrier. According to article 22 (2) of the convention the carrier shall not be liable for

any damage exceeding this amount, if he proves that:

1. such damage was not due to the negligence or other wrongful act or omission of the carrier,its servants or agents, or


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2. such damage was solely due to the negligence or other wrongful act or omission of a thirdparty.

Bodily injury:

Article 17 (1) further requires the damage to be death or bodily injury. According to a decision of

the US Supreme Court in 1991 only some kinds of psychological damage which are related to the

bodily injury, as opposed to psychological damage sec, qualify for compensation under article 17.

However, when considering the course of the discussions and decisions at the ICAO International

Conference, it appears that the term bodily should not be interpreted too strictly: by using the term

bodily it was not intended to interfere with jurisprudential developments with regard to

psychological injury suffered as a result of the bodily injury caused by an accident. In the procedure

in the Dutch Parliament regarding the approval of the Montreal Convention, it was mentioned that

for that purpose developments in other areas than international air carriage should be taken into

consideration as well.

Location of the accident: on board, or during (dis-embarking )

The carrier is liable when the damaging event occurs on board the aircraft or in the course of any of

the operation of embarking or disembarking. Also on this aspect discussions may arise as to whethera strictly literal or a more liberal interpretation has to be followed. When looking at the objective of

the Montreal Convention in conjunction with, for instance, the fact that due to the fear for terrorist

attacks security checks are no longer conducted at the gate but already at the entrance of the

terminal, such checks may well be considered as a part of the boarding procedure. Hence, the

conclusion of such discussions might be that the carrier is to be held liable for bodily injury

sustained during such security checks.

Liability for delay

Article 19 of the Montreal Convention provides:

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or

cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it


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and its servants and agents took all measures that could reasonably be required to avoid the damage

or that it was impossible for it or them to take such measures.

However, the convention does not define the meaning of the term delay.

Article 22 (1) stipulates that in the case of damage caused by delay as specified in article 19 in the

carriage of persons, the liability of the carrier for each passenger is limited to 4150 Special Drawing

Rights. This limit does not apply, thus article 22 (5),

if it is proved that the damage resulted from an act or omission of the carrier, its servants or agents,

done with intent to cause damage or recklessly and with knowledge that damage would probably

result; provided that, in the case of such act or omission of a servant or agent, it is also proved that

such servant or agent was acting within the scope of the employment.

Article 29(Restriction of the right to compensation):

It cannot be denied that the Montreal Convention is a remarkable change of position towards the

problem of the liability of the air carrier: it is overtly consumer -oriented. However, things are

seldom what they seem.

The possibilities for the passenger are not unlimited. In the preceding paragraphs it has already beennoticed that the interpretation of the terms accident, bodily injury and delay is decisive. Another

question is whether the passenger is still entitled to compensation in cases that cannot be qualified

under article 17 or 19 of the Montreal Convention. In that respect we enter the scope of article 29 of

the Convention. It is headed Basis of claims. In fact, it provides for exclusivity when damage due

to air carriage is involved. It is worded:

In the carriage of passengers, baggage and cargo, any action for damages, however founded,

whether under the Convention or in contract or in tort or otherwise, can only be brought subject to

the conditions and such limits of liability as are set out in this Convention without prejudice to the

question as to who are the persons who have the right to bring suit and what are their respective

rights. In any such action, punitive, exemplary or any other non-compensatory damage shall not be

recoverable.


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In some court decisions it was held that this question has to be answered in the negative, as this

provision implies that a passengers claim for damages must fall within the scope of article 17

respectively 19 of the Convention.


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Conclusion

The Montreal Convention of 1999 moves the international aviation community past the patchwork

system of liability stemming from the original Warsaw Convention and establishes a comprehensive

liability regime for air carriers engaged in international carriage. The Convention provides a muchneeded limit on liability for delay and sets forth clear limits on liability for lost or damaged baggage

and cargo. In addition, the Montreal convention simplifies documentation requirements by

embracing electronic ticketing and air waybills, which should eliminate litigation regarding the

adequacy of travel documents. One of the most significant aspects of the Montreal Convention is

the new liability limit for passenger injury or death. Under the new liability regime, air carriers will be

held absolutely liable for the first 100,000 SDR of damages, even if the damage was caused by a third

party, so long as the injury producing event meets the conditions of liability under article 17 and was

not contributed to by the passenger. The U.S. Department of state has hailed this new passenger

liability regime as the culmination of years of work by the United states to increase, and later

eliminate what if viewed as the unconscionably low liability limits applicable under the Warsaw

System.

The Montreal convention of 1999 only applies to international transportation occurring between

two (or more) states which are parties to the convention. Fortunately, because there have been no

major international air disasters over the past few years, the international aviation law community

has not yet seen the Montreal convention principles applied fatalities and commercial aviation

continues to be an extremely safe mode of travel.

Nonetheless, accidents are a practical inevitability and at some point in the reasonably near future,

we will see the Montreal convention liability regime applied to a real world set of facts.

Summing up the present situation we cannot but conclude that it presents many unsatisfactory

aspects: different limits may apply to passengers travelling on the same aircraft but to different

destinations; when travelling to or from a state which is not a party to the Warsaw Convention themay receive full compensation for damage, as the limits of Warsaw convention are not applicable. It

is not at all unusual for transport to take place between two states, one of which has adhered to the

Hague Protocol, whereas the other has only ratified the Warsaw Convention: the application of the

two conventions may then cause complications. Most of these problems relate to the fact that the

unification of the rules provided by the Warsaw Convention for the carriage of passengers, baggage


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and goods has been adversely affected by the multitude of amendments. Such adverse effects were

heightened by the divergent interpretations of some of its terms in both the continental and Anglo-

Saxon legal systems, as well as in the judicial ruling in various countries. Meanwhile notwithstanding

all complications the old convention is still functioning on a worldwide basis; its rule operates for

benefit of passengers and carrier alike. The carriers are fully aware of their responsibilities, against

which insurance can be arranged; the passengers know what to expect in case of injury or damage. If

they are not satisfied with the limits of compensation they can take out their own additional

insurance policy. The situation even becomes more complicated now that there is new Montreal

Convention. Article 55 of this convention states that it will prevail, as between ratifying state parties,

over any rules which apply to international carriage by air of the Warsaw Convention, the Hague

Protocol and the Guadalajara Convention, tries to overcome the problem of the two treaties being

applicable next to each other. Nevertheless an area for conflicting rules will still be possible whereonly one ratifying state is involved in the international carriage.


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References and Bibliography:

The Montreal Convention: The scram jet of aviation law by Gary A. Gardener andBrian C. McSharry.

The Montreal Convention of 1999: American Bar Association, Aviation Litigationseminar June 3, 2005

Convention for the unification of certain rules relating to international carriage by air,signed at Warsaw on 12 October 1929

An introduction to air law by Dr. I. H. Ph. Diederiks-Verschoor The Hague Protocol, 1955 The Guatemala city Protocol, 1971 Convention Supplementary to the Warsaw Convention for the Unification of Certain

Rules Relating to International Carriage by Air Performed by a Person other than the

Contracting Carrier, Signed in Guadalajara on 18 September 1961 - Guadalajara

Convention 1961

Fordham Journal of Corporate & Financial Law Vol. XII

Documents

A Comparitive Study of Leagl Developments in the Field of International Air Carrier Liability