The law of international carriage by air

Table of content

List of abbreviations

1. Introduction

2. Major legal instruments of private air law
2.1 Historic Developments: From Warsaw to Montreal
2.2 The Warsaw System and its content
2.3 The Montreal Convention of 1999

3. Analysis of the liability rules for Air Carriers comparing the Warsaw System with the Montreal Convention of 1999
3.1 General understanding of liability of the air carrier
3.2 Liability scheme in case of personal injury or death
3.3 Liability scheme for baggage
3.4 Liability scheme for cargo
3.5 Liability scheme for delay
3.6 Duration of liability and place of Jurisdiction

4. Conclusion

References

List of abbreviations

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1. Introduction

The developments of more than hundred years of aviation history have lead to a framework of laws on different aspects of the aviation industry. Giving that the instrument of flying itself - namely the aircraft- touches many different areas of science referring to aerodynamics, flight physics, meteorology and engineering, it is also subject to human influences. For the people aboard the flying aircraft, different rules are applied as compared on land. Comparing air travel with maritime transportation ways, the sea is the most important area used. Out of the questioned rights and obligations of different countries, international maritime laws were developed to govern the necessities of safety and country borders in open waters. Within the field of aviation, the air is the major space touched. But because until the 20th century nobody was able to control an air vehicle, no conflicts erased for intra- or cross- border air traffic. This circumstance changed quickly. Only 16 years after the remarkable milestone of the first engine-powered flight by the Wright brothers from 1903, the growing importance of air travel lead to the first international agreements for air transport. When in 1919 the first scheduled air service between Paris and London came into operation, the necessity for air regulations was an incontrovertible fact. The first agreement was written down in the Paris Convention, which was held in the same year and ratified from 32 nations. The major result of the convention was the recognition of exclusive sovereignty for the states over their airspace, which is still the applied principle today. It also included the first definition of the term aircraft and annexes for technical standards.¹

Nowadays two distinct areas of air law can be differentiated. The international public air law is dealing with rights and obligations of nations in the field of civil aviation. The international private air law governs legal issues for private entities within international air transport, regulating mainly the relation between air carriers and private individuals and cargo shippers. This term paper will focus on those aspects. It will give insights of the major milestones of private international air law like the Warsaw System created in 1929, analyze the necessities for the creation of the Montreal Convention of 1999 and give information on its content. Furthermore a special focus will be established on the liability regimes of the two conventions.

2. Major legal instruments of private air law

Based on the development of air traffic in the early 20th century, the discussion was started to define to whom belongs the air. The general assumption was based on the “freedom of the air” theory at that time. As the first Paris Conference of 1910 was held, a new tendency developed, which favored the air sovereignty of the individual state. This was laid down within the draft convention. Due to political disagreements no tangible results were achieved yet. After the First World War a new approach was made in 1919. Within the Paris Convention the exclusive sovereignty of the airspace for any state was granted, due to strong national interest resulting out of the war.² Nowadays this concept is still concerted practice. Based on this general concept, further developments within international private air law were made. These will be described in the following section, while focusing on the importance for international air transportation.

2.1 Historic Developments: From Warsaw to Montreal

With regards to private air law, the first milestone was set in 1929. The Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air was held with the purpose to regulate conditions for international air transportation with respect to the documents used for a flight and the liability regime of the air carrier. This convention was the first worldwide accepted legal regime, which was signed by 123 nations and came into force 1933. This was the first step for private entities to refer to a legal framework, for which legal issues could be resolved throughout the globe. The rules of the “Warsaw System” as it is referred to, due to other amendments and additions in later stages, are being applied all over the world. Before the Warsaw convention no international rules of air carriage for private individuals existed, creating problems with the relevant jurisdictions and conflicting laws of the countries. The following additions to the Warsaw Convention were made. Together they build the Warsaw System:

- Hague Protocol of 1955
- Guadalajara Convention of 1961
- Montreal Agreement 1966
- Guatemala City Protocol of 1971
- Four amending protocols of Montreal in 1975
- Malta Agreement 1976
- IATA Intercarrier Agreement 1995

The first major reform was made in 1955, when the Hague Protocol was adopted. The Protocol came into force in 1967, but was not signed by the United States of America at this time. The necessity for changing the original text was resulting out of practical and legal problems, due to the expansion of the aviation industry.³ The most important changes include an increase in liability compensation to 250,000 francs poincaré (about US$ 16,600). For the air carriers a new provision was incorporated to simplify the requirements for passenger tickets and baggage checks. Furthermore in article 23 of the convention a new paragraph was added to relieve the carrier of liability if the loss or damage resulted from inherent defect, quality or vice of the cargo carried.,⁴ The next step to uniform air law was laid down in the Guadalajara Convention, which was created to draw up rules designed specifically for air charter arrangements. The convention is supplementary to the Warsaw Convention, because back in 1929 this area of law was not covered due to a lack of air charter. The Guadalajara Convention was the result of two drafts (Tokyo and Montreal draft) and adopted in 1961 at the Guadalajara Diplomatic Conference. Within the convention the carriers are distinguished between the one, who concludes the agreement and the carrier, who carries out the flight partly or wholly. In liability terms the actual carrier is also liable to that extent that the aggregate of the amounts of money recoverable from both carriers can not exceed the total limits which are specified in the Warsaw Convention.⁵ In 1966 a new agreement between a number of airlines and the US Civil Aeronautics Board was concluded. It was called the Montreal Agreement, which aimed at changing the fault liability of the carrier into a risk liability.⁶ The United States were dissatisfied with the Warsaw liability limits and submitted a notice of denunciation of the Warsaw Convention in 1965. But before it came into effect, a private voluntary agreement was signed by all major foreign and U.S carriers serving the United States. This agreement ensured that accident victims are compensated up to USD 75,000. Until now all foreign carriers operating services to or from the United States accepted the terms of the Montreal Inter-carrier Agreement.⁷ The next addition to the Warsaw System is the Guatemala City Protocol. It was signed in 1971 by 21 nations. As the ratification of 30 states is necessary, it is not sure yet, if it actually will come into force. The innovation of the Guatemala City Protocol is the possibility of a national system to supplement the limitation amount per passenger. Furthermore there is no provision to be found, which states that there is an unlimited liability for the air carrier in case of grave default or non-fulfillment of formal requirements for the passenger ticket. The limitation for liability, independent of the circumstances, should not exceed 100,000 US$.⁸ After four more years another set of protocols was added to the Warsaw System. The four Montreal Protocols were adopted in Montreal in 1975. The first protocol deals with the change of franc poincaré into the International Monetary Fund value of Special Drawing Rights (SDR). Thus payment in currency calculated with SDR was now possible. The second protocol replaces the limits set in the Hague Protocol of 1955 by limits expressed in SDR. Protocol no.3 deals with the same issue, but replaces the 1,500,000 franc pointcaré with 100,000 SDR in the Guatemala City Protocol.⁹ Protocol no. 4 regulates the liability of goods. The fault liability is changed into a risk liability, where the carrier has four options to exclude itself from the liability. These are inherent defect, quality or vice of the cargo, defective packaging of cargo performed by an external person, an act of war or armed conflict and an act of public authority.¹⁰ Protocol no.1, 2 and 4 entered into force, leaving the question if protocol no.3 will become valid within the future. The next improvement for passengers flying from Europe to Japan was installed in 1975 in Malta. The Malta Agreement was an undertaking of the major European airlines and Japan to increase the limit of liability according to Art. 22, paragraph 1 under the Warsaw Convention. The liability fees are equal to the amount agreed to in the Montreal Agreement of 1966 for places of departures or destinations inside the U.S.A.. The further development of air law was governed under the presssure of the U.S.A. and major international air carriers. The IATA Intercarrier Agreement from 31st of October 1995 is in this case no civil contract between the member states, but a voluntary agreement, between a list of prominent international air carriers, e.g. German Lufthansa. They agreed upon new generally-accepted conditions of carriage, which stated an unlimited liability for the air carrier, as well as to abandon the burden of proof in case that damage was not higher than 100,000 SDR.¹¹ As the air law increased in its complexity with more and more international travellers, it became visible that there must be again a common ground, where disputes can be settled. Newly efforts were made and resulted in a Diplomatic Conference in Montreal in 1999. The goal of the new convention was to install a modernized framework, which integrates all the given amendments, protocols and the important statutes of the Warsaw Agreement and applies those onto the new circumstances. The Montreal Convention was adopted in 1999, within the German context it was ratified in 2004. The convention itself is now the leading international regulatory framework for private international air law.¹² To assure a general understanding of the liability concepts of the Warsaw System and the Montreal Convention of 1999, the next sections will give an overview about the scope and application, the general content and the uniformity of law of both conventions.

2.2 The Warsaw System and its conten

Today, more than 70 years after the ratification of the Warsaw Convention with its amendments, it is still of major importance. It established the following major elements of the agreement. In Chapter I the scope of the convention is fixed. It applies to the international carriage of persons, baggage or cargo performed by an aircraft for reward.¹³ Chapter II deals with the documents of carriage, including the passenger ticket, baggage check and the air waybill. Chapter III includes all information on liability regulations for the air carrier. In Chapter IV provisions of a combined carriage are laid down. Chapters V & VI contain the general and final provisions, including articles on arbitration.

The main achievements of 1929 include the mandatory nature of the convention, which results in a uniformity of contractual application for the ratifying states. The Convention contains detailed rules about the format and legal significance of the documents of carriage as well as for the regime of liability, which represents the core subject of the Warsaw Convention. The most relevant sources of information for international air traffic are therefore Chapter II and III of the Convention.

As for the documents of carriage the following agreements were made and laid down in the Warsaw Convention of 1929. The carrier is under the obligation to issue a passenger ticket, with the following details. The place and date of issue, points of departure and destination, intermediate stops - if any -, name and address of carrier and the notice that carriage is subject to the provisions of the Warsaw Convention. Today the passenger ticket is a worldwide known document, which every airline issues. In which kind of form issued, if created electronically or in paper form was subject to legal discussion in early history. To minimize conflicts based on issuing electronic tickets, the method of electronic ticketing was first adapted in the Montreal Convention of 1999.

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¹ Cf. Diedericks-Verschoor, I.(2001), p. 4.

² Cf. Diedericks-Verschoor, I.(2001), p. 2.

³ Cf. Clarke, M.(2002), p. 13.

⁴ Cf. Hague Protocol(1955), § 23 para. 2.

⁵ Cf. Diedericks-Verschoor, I.(2001), p. 101.

⁶ Cf. Diedericks-Verschoor, I.(2001), p. 105.

⁷ Cf. Countryman & McDaniel (1998)

⁸ Cf. Hjalsted, F.(1982), p. 95.

⁹ Cf. ibid(1982), p. 98.

¹⁰ Cf. Diedericks-Verschoor, I.(2001), p. 112 f.

¹¹ Cf. Ruhwedel, E.(1997), p. 1.

¹² Cf. Schladebach, M.(2007), p 59.

¹³ Cf. Warsaw Convention(1929), Art. 1.