Chapter 6 Legal Issues in International Law Transportation

Montreal Convention of 1999

*Only applies to passengers ticketed for international travel, *if Montreal ratified by all countries involved in the "legs" of the journey *Passenger does not have to prove airline at fault in case of personal injury or death *Imposed strict liability on air carriers of up to 100,00 SDRs

History of General Maritime Law: Rolls of Oleron

--12th Century --Judgments of the sea from actual cases recorded in French --In England, maritime cases eventually came under jurisdiction of King's courts --In Europe, maritime law developed into national maritime codes

The Hague Rules

--1924 Convention that limited ocean carrier liability -Codified into many national laws -Replaced in the U.S. by.... --U.S. Carriage of Goods by Sea Act (COGSA) -Applies to U.S. and foreign port shipment -Governs carrier's liability from loading to unloading -Carrier's liability extends to stevedoring companies and subcontractors

Embarking or Disembarking

--A carrier is only responsible for accidents that occur "on board" the aircraft --Whether a passenger is embarking or disembarking is a factual question, whether the passenger is "under the control" of airline employees

Maritime Law

--Also called admiralty law --Sources are conventions, statutes, and in the U.S., court precedents based on customary maritime law --Admiralty Jurisdiction-a court's jurisdiction over cases involving maritime law -mostly international law --General Maritime Law

Carrier Liability vs. NVOCCs

--Both carriers and NVOCCs issue bills of lading --Both are liable for cargo loss --But their liability differs. Why? -Because carrier liability is limited by COGSA NVOCC enter into contracts which are not governed by COGSA, but by Shipping Act and Ocean Shipping Reform Act

Carrier Liability

--Clean bill of lading proof that visible cargo were in good condition before shipping --But not proof if cargo containerized The carrier is responsible for: Cargo shortages - weight often used Stowing cargo - carrier liable to care for cargo Seaworthy ship - carrier must use due diligence to provide seaworthy ship at beginning of the voyage

Non-Vessel Operating Common Carriers (NVOCC)

--Common carriers which do not operate the vessel but assume liability for goods during transport --NVOCCs issue house bills of lading based on master bills issued to them by the carrier

Compensable Damages

--Convention does not specify what compensatory damages can be collected by plaintiff --Convention prohibits punitive damages

Limitations on Liability for Death or Bodily Injury

--Damages measured in Special Drawing Rights (SDRs), a mix of different currencies Two-tiered liability system --Airline is strictly liable for up to 113,100 SDR's ($159,300) --Airline is presumed negligent and liable for damages over 113,100 SDR's, unless it can prove it was not negligent

Carrier Liability is not responsible for:

--Errors in navigation --Perils of the sea

Gerber and Co. v. Sabine Howaldt

--Facts -SS Howaldt chartered from Antwerp to Delaware carrying steel products -Salt water damaged upon arrival -Heavy weather in the Atlantic during voyage -Carrier argued defense of perils of the sea -Trial court ruled against carrier; carrier appealed to 2nd Circuit --Issue -Was the weather encountered by the Howaldt a peril of the sea? --Rule -COGSA exempts carriers from liability for perils of the sea -Includes where a fortuitous action of sea or weather overcomes the strength of a seaworthy ship or diligence of seaworthy crew -Perils of the sea definition based on how violent and tempestuous the weather and whether weather would not be expected by an experiences ship's master --Application -Weather during voyage was not the "usual bad weather" -The weather conditions were not reasonably expectable --Conclusion -Perils of the sea were encountered, therefore carrier not liable under COGSA

Freight Forwarders

--Freight forwarders s are not carriers and not liable for the cargo during shipment -Why? Because no bill of lading is issued

History of General Maritime Law: Rhodian Law

--From the island of Rhodes, 800-1200 B.C. --Maritime Courts developed to deal with unique problems with sea trade --Maritime Codes developed

General Average

--General Average spreads the loss of one claimant to all parties to the voyage -Claims by one shipper against another shipper on same carrier (ship) -Claims by Carrier against shippers with cargo on Carrier's ship --Loss must be caused by: -Common danger that was real and substantial (no long) -Causing the voluntary sacrifice of the cargo or ship --York-Antwerp Rules of 1950 -Standardized rules on General Average -Not a convention nor adopted in national laws -Contained in the contract of carriage as standardized language

Admiralty Jurisdiction in the United States: Why is jurisdiction determination important?

--Navigable waters Cases must occur on navigable waters (capable of navigation) --Vessels in navigation Any vessel in navigable waters not permanently moored or anchored --Maritime torts Torts that 1) occur on navigable waters or caused by vessel; 2) relates to a maritime activity; and 3) has potential to disrupt commerce --Maritime contracts Ocean bills of lading, marine insurance, contracts for towing or wharfage, fuel, supplies to repair vessels, pilot guides, labor contracts with stevedores Doesn't have to be on water!

Types of Coverage Available

--Perils (of the sea) clause --Specially to cover clauses -Explosion, rust, moisture damage, contamination --All risks coverage-fortuitous losses (not from war, delay expenses, strikes) --War Risk and Strike coverage

Per-Package Limitation

--Shipper must be given a fair opportunity to declare the nature and value of the goods --COGSA's Per Package Liability Limitation: $500 per package limitation or freight unit, unless shipper declared and paid for higher value

Air Carrier's Liability for Death or Bodily Injury

Article 17 of the Montreal Convention gives three elements for liability: 1.death or bodily injury, 2.resulting from an accident, 3.on board the aircraft or while embarking or disembarking

What if the number of Packages Not Shown on Bill of Lading?

COGSA requires carrier become a virtual insurer of the cargo

Liability for Air Cargo and Baggage Losses

Cargo Losses --Air carrier is liable for "damages sustained" to cargo under its control, up to 19 SDR's per kilo, unless the shipper has declared a higher value on the waybill --Baggage losses: limited to 1,131 SDR's ($1593) for each passenger, unless higher value specified --Delay: airlines may be liable for delays, up to 4,694 SDRs per passenger --Time Limitations: two years for legal actions

Lawsuits against third parties

Convention doesn't prohibit lawsuits against parties other than the air carrier

Open Cargo Policies

Covers all shipments by shipper of certain types of goods to certain destinations over specified routes Some confusion can arise in CIF contracts

Warsaw Convention of 1929

Limitation on liability --Damage to cargo at about $10 per pound --$75,000 death, personal injury limit --May be exceeded only if airline engaged in "willfully misconduct" Cargo liability - 250 "gold francs" per kilo (about $9 per pound)

Air waybills

are not negotiable and are not documents of title

House air waybill

is issued by freight forwarder to shipper

Master air waybill

is issued directly to shipper by carrier

Consignee

is the receiver of goods from carrier

Consignor

is the shipper