Cargo carried internationally by air is generally subject to one of the followinginternational conventions:

• Warsaw Convention of 1929 (“WC”);
• Warsaw Convention as amended by the Hague Protocol (also known as the Amended Convention) of 1955 (“AWC”);
• Montreal IV Protocol to the Warsaw Convention of 1975 (“MAP4”)
• Montreal Convention of 1999 (“MC99”).

These conventions all impose duties and responsibilities on air carriers. One of the most critical duties is to deliver the cargo to the consignee in the same condition as received. While the cargo is under the control of the carrier, the conventions make the carrier responsible for any loss of or damage to the cargo. Generally this responsibility begins when the carrier or its agent receives the cargo and continues until the cargo is delivered to the consignee at the airport of destination. In return for imposing almost strict liability on carriers for cargo lost or damaged while in their care, the conventions impose limits on a carrier’s liability. These limits are calculated by reference to the weight of the cargo.

When a carrier or its agent takes receipt of the cargo, the conventions stipulate that the shipper must provide the carrier with an AWB. In practice the AWB is usually prepared by the carrier or its agent, typically a forwarder, based on information provided by the shipper. The conventions stipulate details which must be included on the AWB. In the case of the WC, failure to include specifi c details will prevent a carrier from relying on the limits of liability in the convention. The AWC also requires a notice stating that carriage may be subject to this convention and its limits of liability. In recognition of the evolution of the air cargo industry and the way AWBs are now prepared and used, MAP4 and MC99 substantially reduce the details which need to be included on the AWB.

The AWB is evidence of the contract of carriage and the terms of that contract. In addition to complying with the requirements of the applicable convention, it is also important to ensure that the carrier’s terms and conditions of carriage, which are typically set out in its General Conditions of Carriage (GCC), form part of the contract. As a carrier’s GCC are usually quite lengthy it is not practical to include all of them on the reverse of an AWB.

However the GCC can generally be incorporated into the contract by stipulating on the face of the AWB or in the terms on the reverse that carriage is subject to the carrier’s GCC and inviting the shipper to obtain a copy of the GCC from the carrier. The carrier’s GCC will apply to carriage which is not subject to one of the Conventions, for example, shipments to or from Taiwan or Thailand, and for matters not covered by the conventions.

To prevent carriers from being exposed to the risk of unlimited liability, it is important for the GCC to include a limit of liability for such carriage and for situations which are not covered by the conventions.

A carrier’s GCC should also deal with other aspects of the carriage and with the commercial freight transaction. The GCC should include the right to seize and sell cargo to settle outstanding freight or storage charges, or where the consignee has not collected the cargo within a stipulated time period, particularly for perishable cargo.

Carriers should also ensure that they reserve the right to charge interest on unpaid amounts and to vary freight rates. It is also advisable to ensure that freight must be paid on delivery of the cargo to the carrier and that freight is deemed earned on receipt of the cargo by the carrier, even if the cargo is not delivered to the airport of destination.

Carriers should also reserve the right to carry the cargo from the airport of departure to the airport of destination by any means, including by sea or land. In addition, the GCC should make it clear that all fl ight timings and fl ight details, including routings, are indicative only. These provisions allow the carrier maximum fl exibility in its operations.

MAP4 and MC99 allow for electronic AWBs or any other means of recording the information which would otherwise be included on a paper AWB. When a paper AWB is not issued, carriers should ensure that their GCC are either part of the electronic AWB or are brought to the attention of the shipper before the shipper books cargo space. This can be done in a similar way to the methods used by airlines when passengers book e-tickets on their websites. In addition, it is advisable to also stipulate that carriage is subject to the carrier’s GCC on all booking forms and quotations and in any emails to the shipper or its agent.

The AWB is also evidence that the carrier has received the cargo. It is not evidence that the carrier received the cargo in good order and condition except where the carrier or its agent has inspected the cargo. If cargo is delivered damaged to the consignee or the consignee’s agent, the shipper will still need to show that the cargo was received by the carrier without any of the damage noted on delivery. It is relatively straightforward to show damage on delivery to a consignee or at the airport of destination, for example by relying on survey reports.

However, there are usually no photographs of cargo taken before delivery to a carrier so it can be more diffi cult to prove the condition of the cargo on delivery to the carrier. Often damage to the outer packaging of the cargo will implicate the carrier.

Whether a paper AWB or an electronic equivalent is issued, an AWB still plays a vital role in air cargo for shippers, consignees, forwarders and air carriers.

Alan Polivnick is a UK and Australian admitted solicitor in the Singapore offi ce of Clyde & Co, Beaumont & Son Aviation. Alan specialises in aviation law across the Asia-Pacifi c, advising airlines, forwarders and their insurers. This article is intended to provide general information on issues which may be of interest. It is not intended to provide specifi c legal advice. Further advice should be taken before relying on the contents of this summary. Under Singapore law no comment on Singapore law is permitted and nothing in this article should be construed as any comment on Singapore law. No part of this summary may be used, reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photo-copying, reading or otherwise without the permission of Clyde & Co. Regulated by the Law Society © Clyde & Co 2007