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MALAYSIA AIRLINES FLIGHT MH370

AND LIABILITY UNDER THE

MONTREAL CONVENTION 1999

By

Hardial Singh Khaira (June 2014)

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Introduction

The disappearance of Malaysia Airlines Flight MH370 is bound to raise many legal issues

that will bring into sharp focus, mainly, the provisions of the Convention for the Unification

of Certain Rules Relating to International Carriage by Air, Signed at Montreal on 28 May

1999 (commonly known as the Montreal Convention 1999) and, in some cases, those of the

Warsaw Convention 1929 as amended by The Hague Protocol 1955 (the amended Warsaw

Convention) that govern international aviation law. Compared to most other laws, there has

been little written about aviation law in Malaysia. While most of the laws in Malaysia have

originated in the English Common Law, aviation law has developed separately. It derives

more from international treaties and conventions to which Malaysia adheres. Nevertheless,

case law still plays an important part in the interpretation of the statutory rules. It therefore

becomes necessary to look at Malaysian and international cases that have dealt with the

provisions of the conventions.

In the 1900s air travel was principally governed by the Warsaw Convention. The Warsaw

Convention has been described as a treaty among nations that acted as an international Bill of

Rights for passenger and cargo claims.1 It was only at the turn of the century that a new

convention was adopted to replace the Warsaw Convention and a plethora of other

conventions and protocols2 that came into existence subsequent to it. The International Civil

Aviation Organization (ICAO) started revising the Warsaw Convention in 1997 when it set

up a Secretariat Study Group to develop a framework for a modernized regime of air carrier

liability.3 Finally, at the May 1999 International Conference on Air Law new terms were

negotiated. Although 52 States then signed the convention, the required number of States

needed to have it fully ratified was only achieved in September 2003.4

The Montreal Convention basically retained the Warsaw structure and is essentially the

combination of the original Warsaw Convention 1929 and the subsequent protocols, namely

the Hague Protocol 1955, the Guadalajara (Supplementary) Convention 1961, the

Guatemala City Protocol 1971 and the Montreal Protocols 3 & 4, 1975. The Montreal

Convention is not seen as a mere amendment of the Warsaw Convention. It is actually an

entirely new treaty that unifies and replaces the system of liability that was previously

derived from the Warsaw Convention and developed by other conventions and protocols.

The provisions of the Montreal Convention supersede all the rules that apply to international

carriage by air between State Parties who have ratified it and were parties to the instruments

1 McDaniel, Michael, Conference paper - A Presentation of Montreal Protocol 4 To The Warsaw Convention.

The First Change In U.S. Air Cargo Law For International Use In 70 Years presented at Air Cargo Americas

International Congress on 26 October 1999 at Miami, Florida.

http://www.cargolaw.com/presentations_mp4.html. 2 An amendment to a treaty is usually referred to as a protocol.

3 ICAO, Document 9693-LC/190 (1997)

4 The Convention required ratification, acceptance, approval or accession by thirty (30) States before it could

enter into force. The United States ratified it on 4 September 2003 to become the 30th

State to do so. In

accordance with Article 53(6) of the Montreal Convention, which declares that the Convention shall enter into

force on the 60th

day following the deposit of the 30th

instrument of ratification or acceptance, the Convention

took effect from 5 November 2003.

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of the Warsaw System.5 The Montreal Convention has raised the previously low liability

limits of the air carriers and in doing so has also tied it to inflation. A no-fault based system

has been introduced that makes redundant the concept of wilful misconduct that was needed

to breach the previous monetary limits. The Montreal Convention has introduced

requirements for up-front payments, arbitration and mandatory insurance. In addition, it also

sees the introduction of new possible forums where claims may be initiated or brought.

Whereas the Warsaw Convention was seen as favouring the airlines, the Montreal

Convention is now seen as providing more rights for consumers/passengers. The objective of

the Montreal Convention is to:

modernise the liability regime;

consolidate the Warsaw Convention and related instruments;

ensure orderly development of international air transport; and,

ensure uniformity and universality.

The important thing to note is that although the new Montreal Convention has been

introduced, the language of the old Warsaw Convention has been largely retained and most of

the judicial precedents therefore remain relevant in considering the new Convention.

Malaysia only became a part of the new regime when it ratified the Montreal Convention on

29 February 2008.6 The adoption of the Montreal Convention in Malaysia first necessitated

the passing of the Carriage By Air (Amendment) Act 20077 to amend the provisions of the

earlier Carriage by Air Act 1974 to include references to the Montreal Protocol No. 4 and the

Montreal Convention. Unlike some countries that have modified some of the conventions to

suit their own needs, Malaysia has preferred to adopt most of the conventions without too

many modifications.8

Section 2 of the Carriage by Air Act 1974 clearly states that all references to the Carriage by

Air Conventions include the:

Convention - which is the Warsaw Convention 1929 as amended by The Hague

Protocol 1955 and as set out in the First Schedule of the Act;

Supplementary Convention - which is the Guadalajara Supplementary Convention

19619 that was made for the unification of certain rules relating to international

carriage by air performed by a person other than the contracting carrier, as set out in

the Second Schedule of the Act;

5 Article 55

6 The instrument of accession by Malaysia was accompanied by the following reservation: Malaysia, in

accordance with Article 57(b) of the Montreal Convention, declares that the Convention shall not apply to the

carriage of persons, cargo and baggage for its military authorities on aircraft registered in or leased by

Malaysia, the whole capacity of which has been reserved by or on behalf of such authorities. 7 This act came into force on 8 October 2007. See [PU(B) 357/2007]

8 See the schedules to the amended Carriage by Air Act 1974.

9 Although there was reference to this convention in the Carriage by Air Act 1974 Malaysia only ascended to it

on 17 January 2008 in preparation for its adoption of the Montreal Convention 1999 on 29 February 2008.

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Amended Convention - which include the important substantive rules relating to the

cargo provisions as amended by the Montreal Protocol No. 4 of 197510

and as set out

in the Fifth Schedule of the Act; and,

Montreal Convention - which wholly amends the Warsaw Convention 1929 as

amended by The Hague Protocol 1955 and is set out in the Sixth Schedule of the Act.

On board the ill fated Malaysia Airlines Flight MH370, besides Malaysians, there were

passengers of 13 other nationalities11

and it is therefore important to see if their respective

countries are parties to the Montreal Convention.

Montreal Convention 1999

Country Date of Entry Into Force

Australia 24/01/09

Austria 28/06/04

Canada 04/11/03

China 31/07/05

France 28/06/04

Indonesia Not a Party

Italy 28/06/04

Netherlands 28/06/04

New Zealand 04/11/03

Russia Not a Party

Taiwan Not a Party

Ukraine 05/05/09

United States of America 04/11/03

If the next of kin of the Indonesian, Russian and Taiwanese nationals were to file action for

damages and compensation in their own countries, they may not be able to avail themselves

of the provisions of the Montreal Convention as the older Warsaw Convention would apply.

Warsaw Convention 1929 and The Hague Protocol 1955

In 1929, delegates to the Convention on Air Carriers Liability of 192912

(commonly

known as the unamended Warsaw Convention), which included the United States,

agreed to limit passenger compensation for loss of property or harm caused to a passenger

by an airline to a limit of US$8,300. The unamended Warsaw Convention came into

10

Again while there was reference to this protocol in the Carriage by Air Act 1974, Malaysia only ascended to

this convention on 18 January 2008 in preparation for its adoption of the Montreal Convention 1999 on 29

February 2008. 11

It is doubtful if there was an Italian and Austrian on board as two passengers from Iran were apparently

travelling on stolen Italian and Austrian passports. 12

Signed in Warsaw on 12 October 1929.

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force on 13 February 1933.13

The objectives of the unamended Warsaw Convention were

to:

bring about uniformity amongst the nations of the world as they all had different

legal systems and philosophical points of view;

prevent the collapse of a fledgling aviation industry by setting fair limits on any

claim of liability against the airlines and to thereby encourage investment and

growth in the industry; and,

encourage insurers to provide insurance and have a definite basis for insurance

rates to be calculated worldwide.

The Warsaw Convention was amended by The Hague Protocol in 1955. The principal

amendments were:

The mandatory contents of the passenger ticket, baggage check and air waybills

were reduced and, the absence, irregularity or loss of the ticket did not affect the

existence or validity of the contract of carriage.

The troublesome phrase wilful misconduct was redefined as intentional or

reckless misconduct.

As long as the carrier, its employees or agents acted within their scope of

employment, the limits of liability imposed by the Warsaw Convention would

apply.

Maximum financial limit of liability for the death of or bodily injury to a

passenger was doubled.

Although the liability of a carrier was limited under Article 22 of the Warsaw Convention,

as amended by The Hague Protocol, that limit was lifted by virtue of Article 25 if the

plaintiff could show wilful misconduct on the part of the carrier, its servants and/or

agents that rebutted the presumption of fault on the part of the carrier. The unamended

Warsaw Convention only referred to a carrier and not to its servants or agents. The

Hague Protocol extended the application of Article 25 by amending Articles 25 and 25A

to include servants and agents as well. As the United States never enacted The Hague

Protocol, American cases were decided under the unamended Warsaw Convention and

there was general dissatisfaction with the limit of liability imposed for wilful misconduct.

This led the US courts to be creative about the definition of wilful misconduct and they

generally stretched it to beyond the commonly accepted scope of wilful misconduct. In

some cases the US courts permitted the breaking of the limit for wilful misconduct even

in cases where the carrier had no control over the unlawful act. An example of this was

the Lockerbie case14

where a piece of luggage contained a time bomb. Evidence

indicated that the bomb came in on Air Malta Flight KM180 from Malta to Frankfurt and

was transferred to Flight Pan Am 103 in Frankfurt. Pan Am had neither permission nor

13

The Warsaw Convention was actually the result of two international conventions. The first was held in Paris

in 1925 and the second at Warsaw in 1929. 14

re Air Disaster at Lockerbie, Scotland. Dec. 21, 1988 v Pan Am 1991 US App. Lexis 4779.

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jurisdiction to check the luggage. This was the job of the airport authorities. Nevertheless

Pan Am was found guilty of wilful misconduct and had to pay punitive damages.

The further amendment15

by The Hague Protocol of Article 25 of the Warsaw Convention

to mean recklessness coupled with knowledge of probable damage was prompted by

differing views of the courts of signatory States to the unamended Warsaw Convention as

to whether the term wilful misconduct imported an objective or subjective standard of

mind and behaviour. The definition of wilful misconduct as applicable to general

common law cases of torts is to be found in the decision of Webster J in Graham v

Teesdale & Anor16

where he held that wilful misconduct means deliberately doing

something which is wrong knowing it to be wrong or with reckless indifference as to

whether it is wrong or not. This however could not be applied to aviation cases because

of the deliberate wording of Article 25 of the amended Warsaw Convention since it states:

The limits of liability specified in Article 22 shall not apply if it is proved 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, in the case of such act or

omission of a servant or agent, it is also proved that he was acting within the scope of his employment.

Whereas the carrier was allowed the benefit of limited liability for any unintentional,

accidental or negligent act it or its servants and agents committed, it was not extended

that benefit if there was wilful misconduct. The problem therefore lay in trying to clearly

define wilful misconduct.

IATA Inter-Carrier Agreement on Passenger Liability 1995

In 1985, a domestic Japan Air Lines crash caused the death of 529 passengers for which

the airline paid out compensation well in excess of the amended Warsaw Convention

limits. It was thereafter deemed inappropriate by the Japanese that passengers on

international flights would not have access to the same level of compensation as those on

domestic flights. The Japanese decided to avail themselves of the special contracts

clause in Article 22(1) of the amended Warsaw Convention that allowed them to waive

the limits imposed and voluntarily agreed that their liability for passenger death or bodily

injury would be unlimited. They also removed the force majeure defence allowed by

Article 20 of the amended Warsaw Convention for the first 100,000 SDRs17

of any claim.

The decision of the Japanese airlines to unilaterally remove the liability limitations with

regard to passenger claims and to disallow the force majeure18

defence for any claim of

15

Article XIII 16

(1981) 81 LGR 117 17

SDR means Special Drawing Right as defined by the International Monetary Fund and its value is based on a basket of key international currencies. At the time of writing this article 1.00 SDR is approximately equal

to 5.00 Malaysian Ringgit. The prevailing value of the SDR is released daily in the Lloyds List, on the International Monetary Funds (IMF) website at www.imf.org.

18 An event that is a result of the irresistible forces of nature.

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less than 100,000 SDR had a worldwide impact19

as these changes found their way into

the 1995 IATA Intercarrier Agreement on Passenger Liability. The Agreement noted that

the amended Warsaw Conventions limits of liability had not been amended since 1955

and were grossly inadequate in most countries. The Agreement was said to be an

umbrella accord whereby the air carriers who were signatories to the Agreement

voluntarily undertook to waive such limitations of liability as were set out in the Warsaw

Convention 1929, The Hague Protocol 1955, the Montreal Agreement 1966, and/or limits

they may have previously agreed to implement or were required by their Governments to

do so.

By the Agreement the signatory carriers basically agreed to:

1) waive the limitation of liability in Article 22(1) of the Warsaw Convention as to

claims for death, wounding or other bodily injury of a passenger arising under

Article 17 of the Convention;

2) allow the recoverable compensatory damages to be determined and awarded by

reference to the law of the domicile of the passenger; and,

3) not raise any defence under Article 22(1) of the Warsaw Convention for any claim

not exceeding 100,000 SDR.

Malaysia Airlines is a signatory to this Agreement.20

Although the IATA Intercarrier

Agreement on Passenger Liability is not mentioned in its conditions of carriage it

nevertheless specifically mentions that it will not invoke the limitation of liability in

respect of death or bodily injury21

nor avail itself of any defence to that portion of the

claim not exceeding 113,100 SDR22

. The 100,000 SDR limit of the Montreal Convention

was, pursuant to Article 24(2), revised to 113,100 SDR effective as of 30 December

2009.23

China Southern Airlines, which was the contracting carrier for some of the passengers on

Malaysia Airlines MH370, voluntarily undertook to abide with the IATA Intercarrier

Agreement on Passenger Liability when it signed the Agreement on Measures to

Implement the IATA Intercarrier Agreement on 20 August 1998.24

However, in its

conditions of carriage and on its website it makes no express mention of the IATA

Intercarrier Agreement on Passenger Liability. Neither does it have conditions of

carriage similar to those of Malaysia Airlines that reflect the IATA Agreement.

19

For example, in late 1995 the European Union (EU) proposed that air carriers of its member States too should

have unlimited liability and remove the force majeure defence. The EU made it a part of its regulations in

1997 when it passed the European Council Regulation No. 2027/97. 20

http://www.airlineinfo.com/ostpdf7/707.pdf 21

Article 16.2.1 22

Article 16.2.2 23

ICAO Ref.: LE 3/38.1-09/87 dated 4 November 2009. All the limits were multiplied by an inflationary rate of

13.1%. 24

http://www.iata.org/whatwedo/workgroups/Documents/legal/mia-signatory-list.pdf

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In jurisdictions where the older amended Warsaw Convention applies (such as Indonesia,

Russia and Taiwan) this will raise further issues as to the limits of liability of China

Southern Airlines, as the contracting carrier. Presumably, if a claim is made in these

jurisdictions, Southern China Airlines will honour its undertaking to abide with the IATA

Intercarrier Agreement on Passenger Liability.

Montreal International Conference on Air Law 1999

The inflation rate easily outstripped the compensation that was available under the

unamended and amended Warsaw Convention and this led to dissatisfaction amongst

many States. The lack of reform of the Warsaw Convention over the years (especially for

air carriers liability) meant that improvements could only be effected through a plethora

of unilateral, bilateral or regional arrangements. ICAO played a key role in consolidating

the law in mostly one convention by calling for the successful Montreal International

Conference on Air Law 1999.

The salient points of the Montreal Convention that was agreed to and passed and that

need to be noted are:

The Montreal Convention overrides the Warsaw Convention

The object of the Montreal Convention is to replace the entire Warsaw Convention

system.25

Unfortunately, it is not a process that will be effected overnight as the

States wishing to participate in it will first have to sign up for it and it is going to take

a few years to persuade the less affluent States who view the new consumer protection

provisions and higher compensatory payments of the Montreal Convention as a

disadvantage for their carriers. Most of these reluctant States will continue to be a

party to and operate under the old unamended or amended Warsaw Convention. The

parallel existence of the Warsaw Convention with the Montreal Convention will

present problems of uniformity until such time as the Warsaw system becomes

obsolete. As some writers have observed, some of the major features of the Montreal

Convention that seem to make it so consumer friendly and has caused much euphoria

could actually backfire on the consumers. The strict liability regime; the two-tier

system; the requirement for advance payments; the likely trend towards higher

settlements; and, the resulting higher insurance premiums may ultimately lead to more

expensive airfares.26

All arbitrary limits on recovery for passenger death or injury are to be removed.

The unlimited liability provisions agreed to in the IATA Inter-Carrier Agreement on

Passenger Liability 1995 were incorporated into the Montreal Convention. Also now,

in the case of passenger liability for the first 113,100 SDR, the Montreal Convention

25

See Article 55. 26

Mazzucco, Ann, Montreal Offers A Convention For The New Millennium, Lloyd's List, 8 October 2003,

http://www.hfw.com/l3/new/newl3c048.html

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solved the trouble previously caused by trying to define wilful misconduct in Article

25 of the Warsaw Convention by introducing the regime of unlimited liability in

Article 21(1) which reads as follows:

Article 21 - Compensation in Case of Death or Injury of Passengers

1) For damages arising under paragraph 1 of Article 17 not exceeding 100,00027 Special Drawing Rights for each passenger, the carrier shall not be able to

exclude or limit its liability.

2) The carrier shall not be liable for damages arising under paragraph 1 of Article 17 to the extent that they exceed for each passenger 100,000 Special Drawing

Rights if the carrier proves that:

(a) such damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or

(b) such damage was solely due to the negligence or other wrongful act or omission of a third party.

A major difference in the past had been the inclination of the more advanced aviation

States to favour consumer protection and place no limits on liability whereas most of

the other States adopted protectionist policies and limited the claims that could be

made against their carriers (and in most of these States, the carriers are State-owned

National carriers). Now, the carrier can only limit its liability under Article 22 of the

Montreal Convention in cases involving loss, destruction, damage or delay of baggage

but not if there is wilful misconduct as the limitation on liability for damages is not

applicable if it is proven, according to Article 22(5), that the damage sustained

resulted from an act or omission of the carrier or its agents done with intent to cause

damage or recklessly and with knowledge that the damage would probably result.

Exclusion of punitive damages

The jurisprudence on the interpretation of Article 17 of the Warsaw Convention

clearly did not permit punitive damages to be awarded. For example In re Air

Disaster at Lockerbie28

the court reviewed the purpose and history of punitive

damages in American law and found punitive damages not sufficiently compensatory

in nature to come within the scope of Article 17. Even attempts by plaintiffs to use

the wilful misconduct provision in Article 25 to lift the punitive damage prohibition

failed.29

Although the Montreal Convention has introduced unlimited liability, Article 29 has

made it clear that it still prohibits punitive, exemplary or any other non-compensatory

damages to be recovered. The phrase other non-compensatory damages in Article

29 is a little curious and may lead to contradictory interpretations of it in different

jurisdictions.

27

Amended to 113,100 SDR with effect from 4 November 2009. 28

928 F.2d at 1271-72 29

See for example Carey v. United Airlines, 255 F.3d 1044, 1050

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Two-Tier System of Liability for Death and Injuries

The Montreal Convention introduced a two-tier system of liability for death and

injuries to passengers and is similar to the two-tiered IATA agreements that had

previously been voluntarily executed by some air carriers. The first tier has strict

liability of up to 113,100 SDR of proven damages regardless of any fault on the part

of the air carrier. Article 21(1) provides that for damages arising under Article 17(1)

not exceeding 100,00 (now 113,100) SDR the carrier shall not be able to exclude or

limit its liability. If the passenger is in no way responsible for the accident then the

air carrier has absolute or strict liability for the first 113,100 SDR. The only situation

where the air carrier can exclude or limit its liability is stated in Article 20 where it

allows the air carrier to be exonerated of liability or have it reduced if the carrier

proves that the damage was caused or contributed to by the negligence or other

wrongful act or omission of the person claiming compensation. Article 20 further

states that it shall be applied to all the liability provisions in the Montreal Convention

and specifically mentions that it shall also apply to Article 21(1). Article 21 of the

Warsaw Convention stated that if contributory negligence was proved the Court could

in accordance with the provisions of its own law exonerate the carrier wholly or

partly from its liability. It is interesting to note that its replacement, Article 20 of the

Montreal Convention, makes no reference to the law to be used to determine

negligence or contributory negligence. It can only be presumed that lack of reference

to the law to be used makes no difference and that it will still be the law of the forum

in which the action is brought.

There is no limit of liability in the second tier but under Article 21(2) the air carrier

can escape further liability if it proves that such damage was:

not due to the negligence or other wrongful act or omission of the carrier or its

servants or agents; or,

solely due to the negligence or other wrongful act or omission of a third party.

The Montreal Convention in Article 21(2)(a) has departed in language from its

predecessor as it has replaced the all necessary measures or force majeure defence

set out in the Warsaw Convention's Article 20(1) with not due to the negligence or

other wrongful act or omission of the carrier. Whether, this in fact makes it easier

for the carrier to avoid liability, remains to be seen. On the surface it looks easier for

the carrier to prove its case but on closer inspection it may be argued that, in terms of

proving that it was not negligent or that it did not commit a wrongful act or omission,

the carrier will still have to prove that it took all reasonable measures to avoid the

accident if it is to avoid liability. In Obuzor v Sabena Belgian World Airlines30

the

issue was whether the carrier was liable for damages caused by delay when it failed to

get the plaintiffs to Brussels on time for a connecting flight that caused the plaintiffs a

further five-day delay in reaching their final destination of Lagos. Citing established

30

1999 WL 223162 (S.D.N.Y. 1999)

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case law, the court interpreted all necessary measures to mean all reasonable

measures and held that it would not have been reasonable to delay the departure of

the Brussels to Lagos flight as this would have caused delay to other passengers who

had already reached Brussels on time. In dealing with the new defence set out in the

Montreal Convention the courts will have to take into consideration the fact that

delegates to the various conventions and agreements seem to think that there is a

difference. This stems from the fact that delegates seem to attach some importance to

the all necessary measures defence for personal liability because it was removed in

the Montreal Agreement 1966 (although not for baggage and cargo claims), then

reinstated in the Montreal Protocol No.431

, and now, once again removed under the

Montreal Convention. The fact that courts may be induced into making different

findings is a possibility as mentioned in a recent judgment of the House of Lords

when it said that:

However, there are complicating cross-currents, capable of inducing different attitudes: under

the Montreal Agreement of 1966, carriers for flights originating, terminating or stopping in the

United States agreed voluntarily to forego any defence that they had taken all necessary

measures (or that it was impossible to take them) under article 20; while the Montreal

Convention of 1999.... omits altogether any such defence (substituting only limited provisions

for exoneration in the case of negligence or other wrongful act or omission of the passenger).32

When this two-tier structure of liability was proposed and discussed there was strong

opposition from the mainly developing countries. Their main concern was that the

unlimited liability in the second tier would not serve the interests of their smaller air

carriers and that it would only prove beneficial to passengers of developed

countries.33

These developing countries in fact proposed a three-tier liability regime

where they were prepared to:

accept strict liability of proven damages of up to 100,000 (now 113,100) SDR;

a presumption of fault against the air carriers for a provable claim of up to

500,000 SDR but with the reversed burden of proof on the air carrier to prove

that the air carrier was not at fault; and,

no limit of liability for a claim exceeding 500,000 SDR with the claimant

bearing the conventional burden of proving that the air carrier was at fault for

the harm caused.34

Successive Carriage

In the Warsaw Convention the concept of successive carriers was recognised and

introduced by Article 30 and it exculpated the contracting carrier of any liability

caused by the actual carrier. It also foreclosed any arguments that may be advanced

31

Article 20 32

Deep Vein Thrombosis and Air Travel Group Litigation, [2005] UKHL 72 33

ICAO DCW Doc. No. 18. 34

ICAO DCW Doc. No. 21.

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along the lines of implied agency which would make the principal (contracting carrier)

and not the agent (actual carrier) liable. The Montreal Convention at Article 36 has

substantially preserved that concept. The significant effect is that under Article 36(2),

it eliminates joint and several liability as the passenger or any person entitled to

compensation in respect of him or her can take action only against the carrier which

performed the carriage during which the accident or the delay occurred unless where,

by express agreement, the first carrier has assumed liability for the whole journey. It is

to be noted that the contracting carrier and successive carriers however remain jointly

liable under Article 36(3) which provides that as regards baggage or cargo:

the passenger or consignor will have a right of action against the first carrier;

the passenger or consignee who is entitled to delivery will have a right of

action against the last carrier;

each may take action against the carrier which performed the carriage during

which the destruction, loss, damage or delay took place; and,

these carriers will be jointly and severally liable to the passenger or to the

consignor or consignee.

If Malaysia Airlines Flight MH370 was the successive carrier for any of the

passengers, then Article 36 of the Montreal Convention will apply and it will be solely

liable for the death of those passengers. Action can be taken against it for the loss of

goods but it can also be held to be jointly and severally liable with the contracting

carrier, to the consignor or consignee.

Code Sharing

The amended Warsaw Convention overlooked or did not anticipate one important

development in the aviation industry - code sharing. It is an arrangement in which an

airline sells a ticket under its name and code number, but the flight itself is operated by

another airline. This leads to a situation where the contracting carrier, with whom

there is a contractual relationship, does not perform any part of the carriage which is

performed by the actual carrier and with whom there is no contractual relationship.

As observed by Conti35, the agency concept, does not fit into code sharing

arrangements because the contracting carrier does not act on behalf of someone else,

as an agent does, but contracts in its own name. As the contracting carrier it issues its

own travel documents for the whole journey, which it promises to perform entirely

and it thereby accepts full responsibility and liability for its (physical) performance by

its substituted code-sharing partner. As he further observes36

, since the agency

concept does not fit a code sharing arrangement, the carriage is only governed by the

conditions of contract of the marketing or contracting carrier.

35

Conti, Christian, Code-Sharing and Air Carrier Liability, Air & Space Law, Vol. XXVI/1 (February 2001) p.

4 at p. 9. 36

Ibid at p. 11

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The original Warsaw Convention did not cover an actual carrier and since it had

become common in modern air transport for the contracting carrier to have agreements

with other carriers (the actual carriers) it became necessary to introduce rules to extend

the application of the Warsaw Convention to cover the actual carriers as it did the

contracting carriers. The actual carrier became subject to the Warsaw Convention by

virtue of the Guadalajara Convention 1961.

Guadalajara Convention 1961

The Guadalajara Convention basically provided that:

If an actual carrier performs the whole or part of carriage which is

governed by the Warsaw Convention then both the contracting carrier and

the actual carrier shall be subject to the rules of the Warsaw Convention

with the contracting carrier for the whole of the carriage contemplated in

the agreement and the actual carrier solely for the carriage which it

performs.37

The acts and omissions of the actual carrier and of its servants and agents

acting within the scope of their employment shall, in relation to the

carriage performed by the actual carrier, be deemed to be also those of the

contracting carrier.38

The acts and omissions of the contracting carrier and of its servants and

agents acting within the scope of their employment shall, in relation to the

carriage performed by the actual carrier, be deemed to be also those of the

actual carrier.39

In relation to the carriage performed by the actual carrier, an action for

damages may be brought, at the option of the plaintiff, against that carrier

or the contracting carrier, or against both together or separately (jointly

and severally).40

If the action is brought against only one of those carriers, that carrier shall

have the right to require the other carrier to be joined in the proceedings.41

Malaysia only ratified the Guadalajara Convention on 17 January 2008 and it took

effect on 16 April 2008. China on the other hand has never ratified the Guadalajara

Convention and has only deposited a Notification dated 2 June 1997 that the

Guadalajara Convention, which applied to Hong Kong at the time of its return to

China, would continue to apply to the Hong Kong Special Administrative Region

with effect from 1 July 1997.

37

Article II of the Guadalajara Convention. 38

Article III(1) of the Guadalajara Convention. 39

Article III(2) of the Guadalajara Convention. 40

Article VII of the Guadalajara Convention. 41

Ibid.

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The Malaysia Airlines which would have been the actual carrier but not the

contracting carrier for some of the passengers, in its online MAS General Conditions

of Carriage42

states that the conventions applicable to its contract of carriage43

are

the:

Warsaw Convention 1929;

Warsaw Convention as amended by The Hague Protocol 1955;

Warsaw Convention as amended by Additional Protocol No 1 of Montreal

Protocol 1975;

Warsaw Convention as amended by Additional Protocol No 2 of Montreal

Protocol 1975;

Warsaw Convention as amended by Additional Protocol No 4 of Montreal

Protocol 1975;

Guadalajara Convention 1961 and,

Montreal Convention 1999.

China Southern Airlines which would have been the contracting carrier but not the

actual carrier for some of the passengers, in its online General Conditions of

International Carriage for Passenger & Baggage44

states that the conventions

applicable to its contract of carriage45

are the:

Warsaw Convention 1929;

Warsaw Convention as amended by The Hague Protocol 1955; and,

Montreal Convention 1999.

There is no mention of the Guadalajara Convention or the Montreal Protocols in the

China Southern Airlines conditions of carriage. This is of little consequence if the

action for compensation or damages is brought in a country that has ratified the

Montreal Convention (such as Malaysia and China) as Article 55 of the Montreal

Convention specifically states that the convention shall prevail over any rules which

apply to international carriage by air including the Guadalajara Convention and the

Montreal Protocols.

The provisions of the Guadalajara Convention have now been incorporated into the

Montreal Convention as Chapter Five (Articles 39-48):

Article 39 recognises code sharing arrangements between carriers and Article

40 makes both the contracting carrier and the actual carrier liable with the

contracting carrier liable for the whole of the carriage contemplated in the

contract and the actual carrier only solely for the carriage which it performs.

42

www.malaysiaairlines.com/us/en/book-and.../conditions-of-carriage.html 43

See Article 1 of its conditions of carriage. 44

www.csair.com/en/order/20110727.pdf 45

See Article 1.1.2 of its conditions of carriage.

P a g e | 14

Article 41 imposes mutual liability as any act or omission of the actual carrier

or those of its servants and agents who have acted within the scope of their

employment shall be deemed to be also those of the contracting carrier46

and,

vice versa, any act or omission of the contracting carrier or those of its

servants and agents who have acted within the scope of their employment shall

be deemed to be also those of the actual carrier47

. Southern China Airlines

may be interested in arguing that the acts of Malaysia Airlines or its servants

and agents, which has caused the disappearance of Flight MH370, was not an

act that was within their scope of employment and therefore their acts cannot

be deemed to be those of Southern China Airlines.

Article 43 only avails the actual and contracting carrier of the conditions and

limits of liability which are applicable under the Convention if they prove that

they or their servant or agent acted within the scope of their employment. The

onus of proof is on them and not on the claimants.

Article 45 makes the actual carrier and the contracting carrier jointly and

severally liable for any acts and omissions and the claimant has the choice of

taking action against the contracting carrier, actual carrier or both. If the

action is brought against only one of those carriers, that carrier has the right to

require the other carrier to be joined in the proceedings.

Article 46 is especially relevant for those code sharing passengers that booked

their flight on Southern China Airlines as the claimants, on their behalf, have

the option to bring the action in the territory of one of the State Parties, either

before a court in which an action may be brought against the contracting

carrier (Southern China Airlines), as provided in Article 33, or additionally

before a court having jurisdiction at the place where the actual carrier

(Malaysia Airlines) has its domicile or its principal place of business.

Given that China never ratified the Guadalajara Convention then, in countries where

only the Warsaw Convention applies (such as Indonesia, Russia and Taiwan),

Southern China Airlines, as the contracting carrier, would be solely liable. Malaysia

Airlines as the actual carrier would not be liable.

46

Article 41(1). 47

Article 41(2).

P a g e | 15

FLIGHT MH370 AND LIABILITY OF CODE-SHARING AIRLINES

SOUTHERN CHINA AIRLINES

(CONTRACTING CARRIER)

MALAYSIA AIRLINES

(ACTUAL CARRIER)

CONDITIONS OF CARRIAGE

Warsaw Convention 1929

Hague Protocol 1955

Montreal Convention 1999

CONDITIONS OF CARRIAGE

Warsaw Convention 1929

Hague Protocol 1955

Guadalajara (Supplementary) Convention 1961

Montreal Protocols 1, 2 & 4 of 1975

Montreal Convention 1999

Montreal Jurisdiction States

In code-sharing contracting carrier liable for whole of carriage contemplated on contract. [Article 40]

Actual carrier solely for carriage performed. [Article 40]

Mutual liability - Acts of contracting carrier and actual carrier and their servants &

agents acting within scope of their employment deemed to be each others act or omission. [Article 41]

Onus on Airlines that servants and agents acted within their scope of employment

before they can avail themselves of limits of liability. [Article 43]

Contracting and actual carriers jointly and severally liable. [Article 45]

Action against contracting carrier according to Article 33 and additionally actual

carrier at it domicile or principal place of business. [Article 46]

Warsaw Jurisdiction States

As there is no mention of Guadalajara Convention

in conditions of carriage no rules on code-sharing

apply and only contracting carrier is liable. Actual

carrier not liable.

Montreal Convention - Article 33 - Jurisdiction

In this code-sharing case action can be brought against Southern China

Airlines, as the contracting carrier, in the following jurisdictions:

Domicile of the carrier

Principal place of business

Where the contract has been made

At the place of destination

5th jurisdiction in case of death or injury of passenger:

Passenger's principal and permanent residence at the time of the accident

But against Malaysia Airlines, as the actual carrier, it is limited to the Airlines:

domicile or principal place of business (i.e. in both instances Malaysia).

IATA Intercarrier

Agreement on Passenger

Liability 1995

Southern China Airlines is a

signatory to this Agreement

and has agreed to waive

limitation on liability but

there is no reference to it in

its condition of carriage.

P a g e | 16

Exclusivity clause

Common law remedies it seems have no place in the scheme of civil aviation liability.

Article 24 of the Warsaw Convention clearly provided for exclusivity of the

Convention:

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

can only be brought subject to the conditions and limits set out in this Convention,

without prejudice to the questions as to who the persons who have the right to bring suit

are and what their respective rights are.48

2) In the carriage of cargo, any action for damages, however founded, whether under this

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

conditions and limits of liability 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. Such limits of liability constitute maximum limits and may not be

exceeded whatever the circumstances that gave rise to the liability.49

In Abnett v British Airways PLC50

the House of Lords declared that the Warsaw

Convention applied to the exclusion of the common law. Lord Hope of Craighead in

his judgment said that:

The intention seems to be to provide a secure regime, within which the restriction on the

carrier's freedom of contract is to operate. Benefits are given to the passenger in return, but

only in clearly defined circumstances to which the limits of liability set out by the Convention

are to apply. To permit exceptions, whereby a passenger could sue outwith the Convention for

losses sustained in the course of international carriage by air, would distort the whole system,

even in cases for which the Convention did not create any liability on the part of the carrier.

Thus the purpose is to ensure that, in all questions relating to the carrier's liability, it is the

provisions of the Convention which apply and that the passenger does not have access to any

other remedies, whether under the common law or otherwise, which may be available within

the particular country where he chooses to raise his action. The carrier does not need to make

provision for the risk of being subjected to such remedies, because the whole matter is

regulated by the Convention. I believe that the answer is to be found in the objects and

structure of the Convention. The language used and the subject matter with which it deals

demonstrate that what was sought to be achieved was a uniform international code, which

could be applied by the courts of all the high contracting parties without reference to the rules

of their own domestic law. The Convention does not purport to deal with all matters relating

to contracts of international carriage by air. But in those areas with which it deals and the

liability of the carrier is one of them the code is intended to be uniform and to be exclusive

also of any resort to the rules of domestic law.

This resulted in establishing firstly, that the claimants could not have recourse to any

common law remedy (whether in addition to, or, instead of, their remedy under the

Warsaw Convention) and secondly, if the terms of the Warsaw Convention did not

provide a remedy, then the claimants were left without any remedy at all against the

48

Emphasis added 49

Emphasis added 50

1997 SLT 492, 1997 SCLR 114

P a g e | 17

airline. The House of Lords in Morris v KLM Royal Dutch Airlines51

reaffirmed that

the Warsaw Convention was an exclusive code limiting the liability of carriers to

passengers.

This position was affirmed in Malaysia in All Nippon Airways Co Ltd v Tokai Marine

& Trading Co Ltd52

, where Low Hop Bing JCA (delivering the joint judgment of the

Court of Appeal) accepted that in any carriage by air the governing law was the

Warsaw Convention 1929 which had the force of law in Malaysia by virtue of section

3(1) of the Malaysian Carriage by Air Act 1974.53

This was to the exclusion of

common law causes of action.54

The Montreal Convention now reiterates the exclusiveness of the Convention when it

enacts in Article 29 that:

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

however founded, whether under this 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.

Fifth Jurisdiction

Previously, under the Warsaw Convention55

the jurisdiction to bring action against an

air carrier was limited to the country:

in which the carrier was incorporated;

of the carrier's principal place of business;

in which the ticket was purchased; or,

of the final destination.

It sometimes caused grave injustice as a passenger domiciled outside the four

jurisdictions mentioned above could not sue in his/her own domicile. Claims relating

to passenger death or injury may now be filed in the passenger's homeland if certain

conditions are met. The fifth jurisdiction is the passenger's principal and permanent

residence at the time of the accident and it has been introduced by Article 33(2) of the

Montreal Convention and reads as follows:

In respect of damage resulting from the death or injury of a passenger, an action may be

brought before one of the courts mentioned in paragraph 1 of this Article, or in the territory of

a State Party in which at the time of the accident the passenger has his or her principal and

51

[2002] 2 WLR 578 52

[2013] 4 MLJ 744. Note - Although this appeal was decided on 22 June 2012 when the Montreal Convention

1999 was already enforceable in Malaysia it presumably concerns an earlier transaction when the Warsaw

Convention 1929 was applicable. The facts given in the judgment give no dates of the transactions. 53

At para 9. 54

At para 14. 55

See Article 28

P a g e | 18

permanent residence and to or from which the carrier operates services for the carriage of

passengers by air, either on its own aircraft, or on another carrier's aircraft pursuant to a

commercial agreement, and in which that carrier conducts its business of carriage of

passengers by air from premises leased or owned by the carrier itself or by another carrier

with which it has commercial agreement.

The problem with Article 33(2) is that the fifth jurisdiction may only be claimed or

relied upon in the case of death or injury of a passenger and does not extend to

baggage claims. The problem with this distinction in damages for death or personal

injuries and baggage is that it will lead to the following scenarios:

It is unlikely that the aggrieved party will avail itself of the fifth

jurisdiction if loss of baggage is also involved;

If the aggrieved party chooses to avail itself of the fifth jurisdiction it may

have to consider the fact that two actions will have to be filed in separate

jurisdictions.

The aggrieved party may avail itself of the fifth jurisdiction because, it is

more convenient or gives the best relief, and, forgo the lesser claim of

baggage damage or loss altogether.

Many of the developing African nations were against the fifth jurisdiction as they felt

that it would disadvantage their smaller air carriers and that it would benefit mostly the

passengers of developed countries.56

Upfront Payments

If required by its national law the air carrier, by virtue of Article 28 of the Montreal

Convention, is now obliged to make advance payments without delay to any person

who is entitled to claim compensation in the case of an accident. This is in order to

meet the immediate economic needs of any such person. Such advance payments are

not to be regarded as an admission of liability by the air carrier and may be offset

against any amounts subsequently paid as damages by the carrier. Malaysia has

adopted the entire Montreal Convention by including it in the Sixth Schedule to the

Carriage by Air Act 1974 and therefore Malaysia Airlines would be required by its

national law to make advance or upfront payments without delay. Malaysia Airlines

has also agreed to make advance payments as it states at Article 16.5 of its General

Conditions of Carriage that:

In the event of your death, wounding or other bodily injury in the course of carriage

performed by us, we shall make advance payments to the person entitled to compensation as

may be required to meet immediate economic needs on a basis proportional to the hardship

suffered.

56

ICAO DCW Doc. No. 22.

P a g e | 19

Accident

Article 17 of the Warsaw Convention states that:

The carrier is liable for damage sustained in the event of the death or wounding of a

passenger or any other bodily injury suffered by a passenger, if the accident that caused the

damage so sustained took place on board the aircraft or in the course of any of the operations

of embarking or disembarking.57

The delegates at the Warsaw Conference, by using the word accident in Article 17

and the word occurrence in Article 18, implied that the scope of liability of the

carrier is different with respect to passengers as opposed to luggage and goods. The

Guatemala City Conference 1961 considered the word accident in Article 17 and

amended it by saying that liability would be imposed on the carrier for an event

rather than an accident and also that the carrier would be exempt from liability if the

death or injury resulted solely from the state of health of the passenger. These

amendments were wider in scope than the mere use of the word accident and

expanded the scope of the carriers liability. As the Guatemala City Conference never

came into force these amendments were never put into practise. Unfortunately, the

Montreal Convention has also not made any significant change to the Warsaw

Convention Article 17 and retains the word accident. In the circumstances the

current jurisprudence on the Warsaw Convention will continue to be relevant.

Interests and Other Litigation Costs

In a pre-Montreal Convention case of Domangue v. Eastern Air Lines, Inc58

it was

argued that interest, above and beyond the US$75,000 limit set by the Warsaw

Convention as modified by the Montreal Agreement, could not be awarded as the

relevant provision of the Montreal Agreement specified that legal fees and costs were

to be included in the US$75,000.00 limit and where they are not included the limit is

US$58,000. The Appellants in that case contended that, applying the reasoning that

seems to be implicit in the provision, interest was included in the US$75,000 which

must be deemed to be the absolute maximum limit payable by the air carrier.59

The

court ruled that since interest was not mentioned or excluded in the said provisions, it

was permissible and was therefore within the discretion of the court.

Any doubts relating to the award of interest or of any other associated litigation costs

are now solved by Article 22(6) of the Montreal Convention which provides that (t)he

limits prescribed shall not prevent the court from awarding, in accordance with its

57

Emphasis added. 58

722 F.2d 256, C.A.La., 1984. 59

See Clause 1(i) of the Agreement Relating To Liability Limitation Of The Warsaw Convention And The Hague

Protocol.

P a g e | 20

own law, in addition, the whole or part of the court costs and of the other expenses of

the litigation incurred by the plaintiff, including interest60

Mandatory Insurance

Insurance does not seem to be mentioned much in the various aviation conventions

that have been passed. Effectively, there are no provisions requiring airlines to have

proper and adequate insurance cover. It is only the Montreal Convention that has ever

addressed the need for carriers to maintain adequate insurance to cover their liability.

Generally, insurance contracts relating to transportation are either classified as marine

or non-marine. Compulsory insurance was not included in the original Warsaw

Convention and was largely introduced by the domestic law of most countries.

Provisions relating to insurance requirements were only introduced a few years after

the Warsaw Convention in the Rome Convention 1933. Supplementary provisions

were included by the Brussels Insurance Protocol 1938 but very few countries have

bothered to ratify and adopt either the Rome Convention or the Brussels Insurance

Protocol. These conventions were followed by the Rome Convention 1952 that

replaced them and was itself amended when the Montreal Protocol 1975 was adopted.

The dominant objective of the Warsaw Convention and the subsequent protocols and

agreements to amend it seems to have been to permit the growth of an infant industry

by setting limits of liability. Such limits, it was hoped, would allow for affordable

insurance to protect air carriers and at the same time decrease the cost of transporting

passengers. It is only the Montreal Convention that has now made an effort to get the

State Parties to require their carriers to maintain adequate insurance covering their

liability.61

Review of liability limits every five years

One of the problems faced by the Warsaw Convention was the fact that it was not

flexible enough to stay abreast of inflation. This required constant amendments and

other private agreements to overcome. To avoid a plethora of such amendments and

agreements the Montreal Convention has specifically directed in Article 24 that the

monetary limits stated in Article 21 (death and injury claims), Article 22 (claims for

delay, baggage and cargo) and Article 23 (conversion value of monetary units) must be

reviewed every five years and adjusted for inflation. It was this provision that allowed

various limits such as 100,000 SDR to be revised by 13.1% to 113,100 SDR.62

60

Emphasis added. 61

Article 50 62

See footnote 23.

P a g e | 21

Arbitration

An aggrieved party under the Montreal Convention can now also use arbitration to

resolve disputes. However, the right to arbitration that is granted under Article 34(1) is

limited to the carriage of cargo only. Article 34(1) requires the arbitration clause to be

in writing and it must therefore be inserted in the air waybill. Article 34(2) further

clarifies that the arbitration proceedings can only be brought in one of the jurisdictions

specified in Article 33. Article 34(3) makes it mandatory for the arbitrator or

arbitration council to apply the provisions of the Montreal Convention in resolving a

dispute.

Preserves Montreal Protocol No. 4

Now, where the Montreal Protocol No.4 applies, a strict liability regime has been

introduced by inserting and limiting the presumptive liability in Article 20 to the the

carriage of passengers and baggage and in the case of damage occasioned by delay in

the carriage of cargo Loss or damage to cargo not occasioned by delay is not

covered and that makes the liability of the carrier a strict one as the carrier cannot

plead or prove that it and its servants and agents had taken all necessary measures to

avoid the damage or that it was impossible for them to take such measures. The

Montreal Convention retains in all important substantive respects the cargo provisions

of the Montreal Protocol No. 4.

The amended Warsaw Convention and now the Montreal Convention does not contain

a definition of baggage, registered baggage or cargo. Whereas a distinction was

drawn between registered baggage63

and hand luggage64

(described as objects under

the care of the passenger) in the Warsaw Convention, the Montreal Convention has

eliminated this distinction. The amended Warsaw Convention restricted the liability of

the carrier for hand luggage to 5,000 francs per passenger as opposed to the 250 francs

per kilogram for registered baggage and cargo stipulated by Article 22(2) unless the

passenger or consignor made, at the time when the package was handed over to the

carrier, a special declaration of interest, in which case the carrier was liable to pay up

to the declared sum, unless it proves that that sum is greater than the passenger's or

consignor's actual interest in delivery at destination. The Montreal Convention

simply declares in Article 22(2) that:

In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage

or delay is limited to 1000 Special Drawing Rights for each passenger unless the passenger

has made, at the time when the checked baggage was handed over to the carrier, a special

declaration of interest in delivery at destination and has paid a supplementary sum if the case

so requires. In that case the carrier will be liable to pay a sum not exceeding the declared

sum, unless it proves that the sum is greater than the passenger's actual interest in delivery at

destination.

63

See Article 22(2)(b). 64

See Article 22(3).

P a g e | 22

In the case of cargo, the Montreal Convention still provides liability protection65

for

the carrier as long as the carriage is deemed to be within the period of 'carriage by air'.

Any transportation beyond the airport would not normally bring it within the scope of

the Convention. However, if such carriage took place in the performance of a

contract for carriage by air, for the purpose of loading, delivery or transhipment

there would a rebuttable presumption that it took place during the carriage by air.66

This part is consistent with the Warsaw Convention.67

In addition, the Montreal

Convention now stipulates that if a carrier, without the consent of the consignor,

substitutes carriage by another mode of transport for the whole or part of a carriage...

such carriage by another mode of transport is deemed to be within the period of

carriage by air.68 In such a case the liability limitations imposed by the Convention

will not be lost just because the carrier has substituted another mode of transport.

Interestingly, Article 18(3) of the Montreal Convention now simply defines carriage by

air to be that period during which the cargo is in the charge of the carrier. Under the

Warsaw Convention it was more specifically defined as the period during which the

luggage or goods are in charge of the carrier, whether in an aerodrome or on board

an aircraft, or, in the case of a landing outside an aerodrome, in any place

whatsoever.69 This seems to suggest that the Montreal Convention is to be interpreted

broadly and applies even if the goods are not within an airport but are still within the

control of the carrier. There was no reason to eliminate the more specific terms that

were used unless it was to extend the application to beyond the airport.

Limitation Period

In the case of Malaysia Airlines MH370, under Article 35(1) of the Montreal

Convention the period to bring a claim is limited to two years from the date on which

the aircraft ought to have arrived at its destination. This limitation period is strictly

construed as illustrated in the case of Narayanan v British Airways70

where the case

for the death of a passenger was filed more than two years after the flight but within

two years of his death. The panel held that under its plain language, Article 35(1)

applies irrespective of when a claim actually accrues (i.e from the death of the

passenger). The panel also referred to Article 29 which states that any action for

damages, however founded, whether under this 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...71

65

Article 22(3) 66

Article 18(4) 67

For example in Read-Rite Corp. v. Burlington Air Express, Ltd., 186 F.3d 1190 (9th Cir. 1999) the court held

that when there was contrary proof to show that the goods were in fact destroyed during the ground

transportation outside of London's Heathrow Airport, the Warsaw Convention did not apply. 68

Article 18(4) 69

Article 18(2) 70

No. 11-55870 (9th Cir. Mar. 19, 2014), cdn.ca9.uscourts.gov/datastore/opinions/2014/03/19/11-55870.pdf 71

Emphasis added by the panel.

P a g e | 23

Conclusion

In the case of Malaysia Airlines MH370, most claimants will be able to rely on the provisions

of the Montreal Convention should they choose to do so. Claimants will have to weigh up

the advantages and benefits of the jurisdiction they intend to bring their claim in. For

example a claimant for an Indonesian passenger on the flight, who made the contract in

Indonesia, could file the action in Indonesia but would be subjected to the older Warsaw

Conventions and its limitations. The claimant could instead choose to file the action in

Malaysia and avail himself or herself of the more updated provisions of the Montreal

Convention.

Claimants for code sharing passengers, who made the contract with Southern China Airlines,

may have to consider very carefully if they wish to bring a claim against Southern China

Airlines which would give them a choice of a few jurisdictions or if they want to proceed

against the actual carrier, Malaysia Airlines, in which case they can only bring the claim in

the Malaysian courts i.e. before the court having jurisdiction at the place where the actual

carrier has its domicile or its principal place of business72

.

There is much that will need to be considered by the legal advocates that act for the

claimants. There are some doubtful areas which will only be clarified after some new judicial

pronouncements have been made regarding them. Flight MH370 is likely to set some new

precedents in aviation law. If actions are brought in Malaysia, the eyes of the world will be

on the Malaysian judiciary and how it interprets the rules in line with international

jurisprudence on aviation law and Malaysias legal and moral obligations as a signatory to the

conventions, treaties and protocols it has signed or ratified and adopted.

On the whole, the Montreal Convention does acknowledge that international air travel has

changed since 1929 and that the air carriers are no longer fledgling businesses that need to be

protected and the time is right to recognise the rights of victims. Unfortunately for the crew

of Flight MH370, the Montreal Convention does not apply to them and their claims will have

to be settled under Malaysian domestic laws and their terms of employment with Malaysia

Airlines.

Hardial Singh Khaira LL.B (Hons)(Univ. Malaya); LL.M (Univ. W. Australia)

Former Advocate & Solicitor (High Court of Malaya)

Former Lecturer & Honorary Research Fellow in Law (Murdoch University, Western Australia)

Email: hskhaira2@gmail.com

DISCLAIMER: This article is not to be regarded as legal advice on what action can be taken, or where, against the actual,

successive and contracting carriers. Parties intending to take action and legal advocates acting on their behalf should do their

own legal research to determine the rights of claimants and liabilities of the concerned carrier, including the appropriate

jurisdiction to bring the action.

72

See Article 46 of the Montreal Convention.

P a g e | i

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