The 2013 case of Durunna v. Air Canada brings up several issues that affect both the consignor and consignee. Durunna was a case where a consignment of 10 laptop computers carried by air from Canada to Nigeria disappeared during carriage. The defendant Air Canada invoked the limitation of liability of the carrier guaranteed by the Montreal Convention of 1999, whereas the plaintiff claimed the total value of the computers along with shipping costs.
On the flimsiest and most tenuous of reasons imaginable, the court awarded judgment to the plaintiff Durunna as claimed, on the ground that Air Canada did not give sufficient notice to the plaintiff of its limitation of liability, and therefore the limitation provisions of the Convention did not apply.
For one, there is no provision in the Montreal Convention that requires notice by the carrier to the consignor that limitation of liability provisions would apply to the carriage of cargo. More compellingly, Article 9 of the Convention is explicit in that even in the absence of documents of carriage of whatever nature, the contract of carriage will remain valid and that limitations of liability will apply. The only window of opportunity the plaintiff would have had to justify his claim for the full value of cargo would have been for him to show that he had declared the value of the cargo as a basis for compensation for loss, as was decided in the 2003 case of MDSI Mobile Data Solutions Inc. v. Federal Express, where the plaintiff had declared the value of cargo as US$214,000, which the court interpreted to have replaced the limited liability of 250 francs per kilogram.
The Durunna decision, which was incorrect, focuses our attention to a more serious issue: cargo theft that leaves the hapless consignor with compensation of 17 Special Drawing Rights per kilogram under the Montreal Convention – unless the consignor makes, at the time of delivery of the cargo to the carrier, a special declaration of interest at delivery to destination and pays a supplementary sum if required. It is only this measure that obligates the carrier to pay the declared sum, unless the carrier proves that the sum is greater than the consignor’s actual interest in delivery at the destination.
Unlike in the context of liability for damage sustained by the passenger or his checked baggage, where a two-tier liability system operates where the carrier’s liability exceeds the 100,000 Special Drawing Rights of the first tier, unless the carrier proves that the damage was not due to the negligence of the carrier or his servants or that there was negligence on the part of the plaintiff or other wrongful act or omission of a third party. There is no such stringent onus placed on the carrier in case of loss or damage to cargo.
There is no room for doubt that cargo crimes, including theft of cargo, is prolific. The Congressional Research Service Report for Congress on Air Cargo Security, updated in 2007, places the extent of cargo theft in the U.S. for all forms of transportation at US$10 billion to US$25 billion per annum. The same report voices concern about cargo theft rings at JFK International, Logan International in Boston and Miami International Airports. It identifies the insider threat as the most ominous where cargo workers assist in cargo theft, and calls for more background checks and the enhancement of security of cargo operations.
Lack of effective cargo theft reporting; weaknesses in transportation crime laws; lack of understanding of the nature of cargo carriers; and the need to improve expertise in countering cargo theft are some of the issues raised.
From the 1983 Franklin Mint case involving the carriage of coins valued at US$250,000 until now, the liability regime regarding the carriage of cargo has caused much debate. The solution seems to lie both at law and at containment of the crime. It is time to take another look.