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By Daniel Baxter |
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February 13, 2011 - Air New Zealand Engineering,
contracted with Menlo Worldwide Forwarding, Inc.
(“Menlo”) to ship a turbine aircraft engine from
Menlo, in turn, contracted with Qantas Airways, to
perform the actual carriage of the engine to its
destination. When the engine arrived in
It
had been damaged sometime during transportation and the
engine’s owner subsequently filed a claim with its
insurer, Chubb Insurance Co. of |
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On
November 14, 2006, Chubb brought a suit in federal district
court against Menlo’s successor-in-interest, UPS Supply Chain
Solutions, Inc. (“UPS”), seeking to recover the money that it
had paid to the engine’s owner. Chubb argued that UPS was liable
for the damage to the engine under the Montreal Convention,
which governs international air carriage of passengers, baggage,
and cargo. The parties eventually reached a settlement under
which UPS agreed to pay Chubb $80,000.
On
September 18, 2007, UPS filed a third-party complaint against
Qantas, for sums UPS had paid Chubb. UPS claimed that it was “in
no way responsible” for the damages alleged in Chubb’s action,
rather, UPS maintained, the engine was damaged as a “direct and
proximate result” of “negligent or other actionable conduct” by
Qantas.
The case
was heard in district court. However, the case was dismissed due
to the district court narrow interpolation of the “Montreal
Convention”. The court ruled that UPS failed to file a claim
with the court within two years from the date of the initial
claim. UPS then filed an appeal with U.S Court Of Appeals for
the ninth circuit.
The Montreal Convention governs the liability of air carriers in the “international carriage of persons, baggage or cargo.” Montreal Convention, Article 35 of the Montreal Convention states: “The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.” By its terms, Article 35 extinguishes only a single right: the “right to damages.” |
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Unless UPS’s
claims against Qantas assert such a right, they are not affected by
Article 35. The “right to damages” is not defined in Article 35, but its
contours become clear when the Convention is read as a whole. Articles
17 to 19 of the Convention set forth the circumstances in which a
carrier is “liable for damage.”
A carrier is
liable, under Article 17(1), for “damage sustained in case of death or
bodily injury of a passenger”; under Article 17(2), for “damage
sustained in case of destruction or loss of, or of damage to, checked
baggage”; under Article 18(1), for “damage sustained in the event of the
destruction or loss of, or damage to, cargo” and under Article 19, for
“damage occasioned by delay in the carriage by air of passengers,
baggage or cargo.”
Other Articles
establish limits on a carrier’s liability for damage, providing, for
example, that compensation for loss of cargo cannot exceed a specified
amount per kilogram. Still other Articles impose conditions on the
filing of an action for damages against a carrier. Article 31, for
instance, requires that in the case of damage to baggage or cargo, “the
person entitled to delivery must complain to the carrier” within a
specified time period “after the discovery of the damage.”
Construed against
this backdrop, the “right to damages” referenced in Article 35 is the
cause of action under the Montreal Convention by which a passenger or
consignor may hold a carrier liable for damage sustained to passengers,
baggage, or cargo. The |
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