Carrier Liability In International Air Passenger Carriage

The Convention for the Unification of Certain Rules Relating to International Carriage by Air, adopted at Warsaw in 1929(the “Warsaw Convention”), is the first private international treaty that provides unified comprehensive rules for carrier liability as applied to international air carriage. By creating a unified and mandatory liability system for international air carriers, the main purpose of the Warsaw Convention is to promote and protect the international aviation activity as an infant industry in the early 20 th century, and to provide adequate and fair compensation for the passengers and consignors. As aviation industry has been growing and maturing through the rapid development of the technology progress as applied in aircraft and transportation, and as the continuous raising of public awareness for consumers’ right, the stringent liability cap and the unbalanced protection towards air carrier under the Warsaw Convention are no longer fit for the contemporary aviation activity.Under this circumstance, several successor international treaties and non-treaty arrangements, such as the “intercarrier agreements”, have been adopted, with the purpose of modernizing and updating the inappropriate liability rules of the Warsaw Convention. As a consequence, in its 70 years’ application, the unified liability system of the Warsaw Convention has been gradually modified, supplemented, changed and deviated by different international treaties with differentiated State Parties, varied intercarrier agreements with differentiated air carriers, and domestic legislations with various contents. The multilateral treaties related are the Protocol to Amend the Warsaw Convention, adopted at the Hague in 1955(the “Hague Protocol”), the 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, adopted at Guadalajara in 1961(the “Guadalajara Convention”), and the 4 Additional Protocols of 1975(the “Montréal Additional Protocols”) to amend the Warsaw Convention and the Hague Protocols. The intercarrier agreements related include the Montréal Intercarrier Agreement of 1966, the so-called “Malta Agreement” of 1974, the so-caled “Japanese Initiative” of 1992, the IATA Intercarrier Agreement on Passenger Liability of 1995(the “IIA”), and the IATA Agreement on Measures to Implement the IATA Intercarrier Agreement on Passenger Liability of 1996(the “MIA”). The domestic legislations include the Constitution Order No. 274 of Italy, the EU Regulation(EC) No. 2027/97, Regulation(EC) No. 889/2004 and Regulation(EC) No. 261/2004. These legal instruments, i.e., both treaties and non-treaty arrangements, all together have constituted a complicated and inconsistent liability system for international air carriage, which is known as the “Warsaw System”.It is obvious that the scattered and monstrously complicated Warsaw System has deviated from the original goal set by the Warsaw Convention itself, which is to establish a unified, simplified and efficient private international instrument for carrier liability as applied to international air carriage. After 70 years’ application practice of the problematic Warsaw System, States have negotiated and agreed to create a new treaty, with the purpose of replacing the obsolete Warsaw System, and harmonizing and unifying the existing legal documents as related to international carrier liability. In 1999, the Convention for the Unification of Certain Rules for International Carriage by Air(the “Montréal Convention”) was adopted at Montréal, with a modernized set of liability rules and several other improvements, under the conceptions of protection of consumer rights, restitution and corrective justice.The Montréal Convention entered into force in 2003, with 103 ratifications including most of the important States that involved in international aviation activity. There is no doubt that the Montréal Convention has been playing a positive role in harmonizing and unifying liability rules applicable to international air carriage since its entry into force, and the problems under the Warsaw Convention has been largely alleviated. That said, the 10 years’ application practice and performance of the Montréal Convention are still not entirely as desired, and the Warsaw System has not been completely replaced by the Montréal Convention, either. At present, the international carrier liability is governed and regulated by both of the Warsaw System and the Montréal Convention, i.e., the international carrier liability is governed and regulated by the “Warsaw-Montréal System”.Under this context, this Thesis mainly focuses on the issue of air carrier liability under the Warsaw-Montréal System. In order to determine the carrier liability in a specific situation, there are 5 relevant factors which should be closely examined:(a) Which rules shall apply to determine the liability issue as related to damages caused in international carriage by air;(b) Whether the “accident” or “event” has happened within the duration of liability as provided in the liability rules under the Warsaw-Montréal System;(c) What kind of damages is compensable and what is not under the applicable rules;(d) The amount of the compensable damages under the relevant limitations of liability;(e) Which court has jurisdiction to accept and hear the case as related to international air carrier liability.Excluding the introduction part and the conclusion part, this Thesis is composed of 5 chapters and the paragraphs are taken in a progression from general to specific.The first chapter is about “the liability system of international air carrier”, which including:(a) the historical posture, evolution situation and present context of the Warsaw-Montréal System,(b) the exclusivity of the convention liability rules under the Warsaw-Montréal System,(c) the applicable scope and application conditions of the Warsaw-Montréal System, and(d) the specific situation of EU Regulation(EC) No. 2027/97 as related to the liability of the community air carrier.This chapter first introduces the legal and historical context of the Warsaw-Montréal System, including the development of the Warsaw System, the multilateral treaties which have amended and supplement the Warsaw Convention, the intercarrier agreements which have modified the Warsaw Convention, and the deviations of the Warsaw Convention as the status quo, then provides a detailed explanation of the relevant legal documents under the Warsaw-Montréal System, as well as their main features and differences. After that, this chapter analyses the exclusivity issue of the Warsaw Convention and the Montréal Convention, including the exclusive cause of action created under the relevant conventions and the preemptive effect of the convention liability rules. The exclusivity issue of the Warsaw Convention and the Montréal Convention is the most important theoretical and practical issue as related to the liability rules’ application. This chapter also explains today’s specific situation of EU, as the Union has provided its own domestic legislations that incorporated the liability rules under the IATA IIA rules and the Montréal Convention.The second chapter is about “carrier liability as related to death and injury of passengers in international air carriage”, which including:(a) the meaning of “accident” in international air passenger carriage under Article 17 of the Warsaw Convention and the Montréal Convention,(b) the duration of liability of the international air carrier,(c) the compensable damages of death and injury of passengers in international air carriage, and(d) the determination of carrier liability as related to death and injury of passengers in international air carriage.Article 17 of the Warsaw Convention and the Montréal Convention provides that the 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. As there is no provision specifically explaining what is an “accident” under Article 17, the interpretations developed by the domestic courts are relatively important, inter alia, the definition and explanation made by the U.S. courts have a significant influence. The understanding of the duration of liability is also developed by different domestic courts, and there are two main approaches to interpret the phrase “in the course of any of the operations of embarking or disembarking”, namely the “location test” and the “tripartite test”(also known as the “Day-Evangelinos’ s test”). In general, only physical injuries are compensable damages under the Warsaw-Montréal System, while mental injury as related to the bodily injury may be compensated in some cases. As for the liability regime, the Warsaw Convention has adopted the presumed fault liability, with a breakable limitations of liability; the Montréal Convention has adopted the so-called two-tire liability: under 113 100 Special Drawing Right(SDR), the air carrier is strictly liable for damages caused by an accident within the liability duration, and above 113 100 SDR the air carrier is under the presumed fault liability with no liability cap.The third chapter is about “carrier liability as related to damage to baggage in the international air carriage”, which including:(a) the differences between the checked baggage and the unchecked baggage(i.e., the carry-on baggage),(b) the differences between baggage carriage by air and cargo carriage by air,(c) the compensable damages sustained in case of destruction or loss of, or of damage to baggage in international air carriage, and(d) the determination of carrier liability as related to baggage damage.The Warsaw Convention and the Hague Protocol set detailed provisions related to the ticket rules of baggage, which are linked to the carrier’s liability cap and right of defence. The Montréal Convention has simplified the ticket rules as related to baggage, and it provides more detailed rules for the checked and unchecked baggage. Both of the Warsaw Convention and the Montréal Convention have adopted strict liability regime for the air carrier as related to the checked baggage, and the Montréal Convention has further created a fault liability regime for the unchecked baggage.The forth chapter is about “carrier liability as related to delay in the international air carriage”, which including:(a) damages occasioned by delay in the carriage by air of passengers and baggage,(b) carrier liability for damages occasioned by delay under the Warsaw-Montréal System, and(c) the EU Regulation(EC) No. 261/2004 and its application practice as related to delay in the international carriage by air.Pursuant to Article 19 of the Warsaw Convention and the Montréal Convention, the air carrier is liable for damage occasioned by delay in the carriage by air of passengers or baggage. Since the definition of the term “delay” is absent in the relevant conventions, the meaning of delay has been interpreted and developed by the local courts. However, it is well acknowledged that the event of delay itself is not a compensable damage under the Warsaw-Montréal System, for the reason that only damages “occasioned by delay” are recoverable. Due to the exclusivity and preemptive effect of the rules related to delay under the Warsaw-Montréal System, the remedy under Article 19 of the Warsaw Convention and the Montréal Convention is the only available remedy for the passenger in the situation of delay. That said, recently the exclusivity of the delay rules under the Warsaw-Montréal System has been strike and impaired by the EU Regulation(EC) No. 261/2004 and the application practice of the Court of Justice of the Europe Union(CJEU).The fifth chapter is about “the unified jurisdiction rules as related to international air carrier liability dispute”, which including:(a) the four kind of “traditional” jurisdictions as provided in the Warsaw Convention and the Montréal Convention, i.e., the court of the domicile of the carrier, the court of the carrier’s principal place of business, the court where the carrier has a place of business through which the contract has been made, and the court at the place of destination,(b) the so-called “fifth jurisdiction” added by the Montréal Convention and its limited practical influence,(c) the so-called “sixth(and seventh) jurisdiction” incorporated by the Montréal Convention from the Guadalajara Convention and their limited practical influence, and(d) the exclusivity of jurisdiction rules under the Warsaw-Montréal System and the “channeling of liability” effect in theory and practice. The main issues related to the unified jurisdiction rules of the Warsaw-Montréal System are(a) the scope of location of the domestic court with jurisdiction,(b) the differentiated understandings of the “fifth jurisdiction”, and(c) the limited “channeling of liability” effect in practice under the Montréal Convention.Just like the Warsaw Convention, the Montréal Convention fails to resolve several key issues as related to international air carriage, and the exclusivity of the liability rules are at risk. It is still not very clear how much of the Warsaw System’s thick body of jurisprudence and interpretation will endure under the contemporary Warsaw-Montréal System. Just as in the development and disintegration of the early Warsaw System, if domestic courts of different State Parties divide in their rulings, it may well be necessary for them to negotiate a new amendment, or even another new convention. That said, at this stage, it is much more important for domestic courts to interpret and apply the liability rules of the Warsaw-Montréal System in good faith, i.e., to implement the convention provisions in such a way that the purpose and objective of the conventions will not be undermined, and the exclusivity of liability rules will not be infringed. After all, the unified liability system as applied to international air carriage can only achieve its goal through the real-life domestic application practice.