Opinion ID: 1240913
Heading Depth: 2
Heading Rank: 1

Heading: The Warsaw ConventionHistory and Purpose

Text: The Warsaw Convention [4] was the product of two international conferences that occurred between 1925 and 1929, while the airline industry was in its infancy. The Convention, largely a response to fears of airline carrier bankruptcy, had two primary goals: (1) to establish uniformity in the aviation industry regarding the procedural and substantive law applicable to claims arising out of international air travel; and (2) to limit air carriers' potential liability in the event of an accident. [5] The Warsaw Convention set out a scheme for limiting an air carrier's liability. It established a presumption of liability against the air carrier for accidents arising out of international air travel. Warsaw Convention, arts. 17-19. Potential plaintiffs received the benefit of presumptive liability against the carrier, but they also were subject to certain affirmative defenses and a strict damages ceiling. Id., arts. 20-22. The original Convention set the liability cap at $8,500 for personal injury and approximately $20 per kilogram for damage to goods, thus protecting the airlines from the risk of catastrophic damages. Id., art. 22. As the fledgling airline industry matured, it became clear that the liability limitations of the Warsaw Convention were far too low. Largely at the insistence of the United States, the Warsaw Convention signatories reconvened in 1955 at the Hague to amend the Convention. See Paul Dempsey & Michael Milde, International Air Carrier Liability: The Montreal Convention of 1999, at 17 (2005). Among other alterations, the Hague Protocol increased the liability cap to approximately $16,500 for personal injuries. Id. at 20. The United States ultimately refused to ratify the Hague Protocol, in part because it saw the amended liability cap as still too low. Id. at 20-21. Recognizing the harsh results of the unamended Warsaw Convention for potential plaintiffs, in 1965 the United States gave notice of its denunciation of the Convention. Id. at 29. Shortly before the denunciation was to take effect, however, a large number of private air carriers entered into an interim agreement, in which they voluntarily increased their personal injury liability limitation to $75,000. This voluntary action by the airlines became known as the Montreal Agreement. [6] Consequently, the United States' denunciation was withdrawn. Efforts to modernize the Convention continued, and a number of different amendments, most notably the Montreal Protocols, were developed to address formally concerns about under-compensation for plaintiffs. In 1998, the United States ratified Montreal Protocol No. 4 (MP4), [7] which raised the liability cap for damage to cargo to 17 SDRs per kilogram. At the time of ratification, this equaled approximately $25 per kilogram. Id. at 28. The MP4 went into effect in the United States on March 4, 1999. Prior to 2003, then, a complex interplay of conventions, treaties and domestic laws governed international air carrier liability. See Dempsey & Milde, supra, at 1-2. The Montreal Convention [8] (not to be confused with the MP4 or Montreal Agreement) was the product of a United Nations effort to reform the Warsaw Convention so as to harmonize the hodgepodge of supplementary amendments and intercarrier agreements of which the Warsaw Convention system of liability consists. Ehrlich v. American Airlines, Inc., 360 F.3d 366, 371 n. 4 (2d Cir.2004). In May 1999, representatives of 121 nations gathered in Montreal, Canada to negotiate and adopt a new treaty that would replace the Warsaw Convention. Id. At the end of a three-week conference, the delegates approved the Montreal Convention, and fifty-two countries, including the United States, immediately signed the treaty. Id. The new treaty unifies and replaces the system of liability that derives from the Warsaw Convention, id., explicitly recognizing the importance of ensuring protection of the interests of consumers in international carriage by air and the need for equitable compensation based on the principle of restitution. Montreal Convention, pmbl. It establishes strict liability for personal injury claims up to 100,000 SDRs, and presumptive liability without limit above that amount. Montreal Convention, art. 21. This Convention seems to have reversed one of the premises of the original Warsaw Convention, which favored the airlines at the expense of consumers. Ehrlich, 360 F.3d at 371 n. 4. Nevertheless, the Montreal Convention did not alter the original Warsaw Convention goal of maintaining limited and predictable damage amounts for airlines. The United States Senate ratified the treaty on July 31, 2003, and it entered into force on September 5, 2003. In this case, the incident giving rise to Sompo's claim took place on December 28, 2000after the ratification of MP4 but several years before the Montreal Convention became effective in the United States. Therefore, NCA's liability here is governed by the Warsaw Convention as amended by the MP4, not by the new Montreal Convention. Under Article 18 of the Warsaw Convention, NCA is presumptively liable for any damage sustained to goods while they are in the airline's custody. Under Article 22(2), however, NCA's potential liability is limited to 17 SDRs per kilogram of damaged goods, or approximately $74,450.84 in this case.