Lloyd's Maritime and Commercial Law Quarterly
Book review - RECOVERY UNDER THE WARSAW CONVENTION FOR LOSS OF VALUABLE AIR CARGO
Stanley H. Solomon*
Steven E. Goldman**
The recent decision of the United States District Court for the Southern District of New York in the case of The Bank of Nova Scotia v. Pan American World Airways, Inc.1 has served to illustrate handsomely the singular difficulty confronting a cargo shipper and its underwriters in their common effort to recover against an international air carrier for loss of valuable property while in transit aboard a flight. More happily, the case may also contain the promise of a new judicial disposition to hold the international air carriers fully liable for the negligence and flagrant omissions of their employees when this results in the loss or unexplained disappearance of extremely valuable cargo. Protected by the provisions of the Warsaw Convention (or more properly the Convention for the Unification of Certain Rules Relating to International Transportation by Air)2 and the Hague Protocol of 1955,3 the great international carriers by air have traditionally enjoyed the benefit of provisions limiting their liability which have aroused the understandable envy of carriers by sea and by road.
Sometimes explained as a necessary expedient to protect and foster the fledgling air carriers in the early years of their development during the 1930s4 the Warsaw Convention’s often harsh limitation of liability is today an anachronistic privilege which all too often is utilized by great commercial and governmental institutions as a shield against the efforts of shippers to recover for the consequences of the air carriers’ flagrant negligence.
Specifically, the shield affording protection to international air carriers comprises the provisions of art. 22 of the Warsaw Convention, limiting such carriers’ liability
* B.A. Columbia University, J.D. Stanford University; Member of Standard, Weisberg, Heckerling & Rosow, P.C., New York, N.Y. and counsel of record for plaintiff in Bank of Nova Scotia v. Pan American World Airways, Inc.
** B.A., M.A. Boston University, J.D. Tulane University; Associate with Standard, Weisberg, Heckerling & Rosow, P.C., New York, N.Y.
1 16 Avi. (CCH) 17, 378 (S.D.N.Y. 1981).
2 49 Stat. 3000, 49 U.S.C., s. 1502.
3 Although the Hague Protocol has never been enacted by the U.S. Senate, the court pointed out in Bank of Nova Scotia v. Pan Am that the only American objection to the Protocol was its failure to adequately increase the limitation of liability for personal injury and death, a problem which was resolved in the more recent Montreal Agreement. Thus, it would appear that American courts would not refuse to apply the provisions of the Protocol, including one defining wilful misconduct.
4 See, e.g. Kreindler, Aviation Accident Law (Revised edn. 1981) wherein it was stated “Probably the principal problem facing the budding international airlines was the securing of capital in the face of what appeared to be enormous hazards. In the absence of a limitation of liability one disaster might sweep away a large capital investment. It was in this atmosphere and era that the Warsaw Convention was enacted. Its most important provision was a limitation of liability for personal injury and death to passengers, to 125,000.00 Poincare French francs …” section 11.01 [2].
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