15th Sep 2025 | Articles & Newsletters
In Wealmoor Limited v KLM Royal Dutch Airlines [2025] EWHC 1706 (Comm), 11 July 2025, the High Court handed down judgment in a case concerning the shipment of 500 boxes of prime Peruvian asparagus from Lima to London.
Under the carrier’s “Fresh 2” service, it was contractually agreed that the asparagus required refrigeration at temperatures between 2-8°C. The refrigeration was turned off during aircraft descent and at stopovers, exposing the asparagus spears to ambient temperatures exceeding 10°C for over 7 hours. The asparagus therefore arrived severely deteriorated. The owner of the asparagus accordingly brought a claim for damages against the carrier pursuant to article 18 (Damage to Cargo) of the Montreal Convention.
Article 18(1) and (2) of the Convention provide:
a) inherent defect, quality or vice of that cargo;
b) defective packing of that cargo performed by a person other than the carrier or its servants or agents;
c) an act of war or an armed conflict;
d) an act of public authority carried out in connection with the entry, exit or transit of the cargo.
As part of its defence, the carrier argued that an “event” meant something external and fortuitous happening at a particular time and place and that the turning off of the registration did not constitute an event.
David Elvin KC (sitting as a Deputy High Court Judge), applying the obiter dicta found in Re Deep Vein Thrombosis [2006] 1 AC 495, held that while an event is ‘something which happens at a particular time, at a particular place, in a particular way’, it need not be fortuitous, unexpected or unusual [105], unlike the definition of “accident” found in Article 17(1). The deliberate turning off of refrigeration therefore constituted an “event” within the meaning of Article 18(1) [123].
The carrier further argued that there was an inherent vice under Article 18(2)(a) in that asparagus naturally deteriorates above its optimal 0-2°C. Applying principles from The Albacora [1966] 2 Lloyd’s Rep. 53, the judge held that inherent vice must be assessed against the contracted service [143]. Since 2-8°C was contractually agreed, it was standard commercial practice, and asparagus would not deteriorate within that range, no inherent vice existed [145-147].
The carrier also relied on a defective packaging defence (Article 18(2)(b)), arguing that the mesh wrapping on the asparagus prevented cooling. The judge similarly rejected this, finding that the use of mesh had been standard practice since 2010, was known to the carrier on receipt of the cargo, and that other asparagus consignments on the same flight used identical wrapping without complaint [153-154].
The decision provides perhaps chilly confirmation to cargo carriers that an “event” under Article 18 is deliberately broader than “accident” under Article 17. Further, once cargo arrives damaged after being received in good condition, the evidential burden shifts to the carrier to disprove that a damage-causing event occurred or prove an Article 18(2) exception applies. It is therefore vital for carriers to ensure what contractual obligations they have agreed to and to check and record both the packaging and condition of received cargo.
In AD v Iberia Airlines (C-292/24, 5 June 2025), the Court of Justice for the European Union (“CJEU”) handed down judgment concerning the interpretation of the reporting deadlines set out in Article 31(2) of the Montreal Convention in cases of delayed baggage.
Article 31(2) provides, so far as relevant, that:
‘… In the case of delay, the complaint must be made at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his or her disposal.’
The case concerned passengers travelling from Frankfurt am Main (Germany) to Panama City (Panama), with a layover in Madrid (Spain). The passengers reported to Iberia that their checked baggage had not been delivered and was therefore lost. They further informed that unless they received an update within three days, they would buy replacement items and continue with their travel plans – which they ultimately did. The passengers’ baggage was eventually delivered to Panama City with a delay of five days. The passengers subsequently sought reimbursement for the cost of replacement items, additional travel expenses, and rebooked return flights purchased as a result of the baggage delay.
The key issue was whether Article 31(2) permitted passengers to claim compensation for damage caused by a baggage delay before the baggage is returned, or whether the passengers could only claim after they received the baggage given the full scope of their damage might only then materialise.
Rather unsurprisingly, the CJEU adopted an interpretation of Article 31(2) favourable to passengers as it held that passengers may submit claims for damages arising from delayed baggage before the baggage is returned. The Court held that the 21-period specified in Article 31(2) marks the latest possible time to file a complaint, not the earliest [20]. By applying a literal interpretation of the article, the CJEU found that passengers are entitled to submit a claim for compensation at any time between the moment their baggage is delayed and before the expiry of the 21-day period following the return of the baggage [21].
Whilst the CJEU’s interpretation clearly benefits passengers, the Court noted that it also benefitted air carriers given that early notification allows them to investigate complaints promptly, potentially mitigating the damage, and to collect evidence to demonstrate that they took all reasonable steps to prevent the damage [29-30].
Although the CJEU’s interpretation is not binding on UK courts, it is certainly persuasive were there to be any (unlikely) dispute in this jurisdiction as to Article 31(2)’s meaning.
In Evans v Air Canada [2025] HCA 22 (14 May 2025), the High Court of Australia dismissed an appeal against a decision of the New South Wales Court of Appeal concerning the interpretation of Article 21(2) of the Montreal Convention and Air Canada’s conditions of carriage.
The proceedings arose from turbulence experienced on a flight from Montreal to Sydney. The claimant passengers sought damages under Article 17(1) of the Montreal Convention for spinal and psychological injury allegedly caused by the turbulence. The issue was whether Air Canada could rely on a partial defence contained in Article 21(2) to limit the sum of recoverable damages.
Air Canada relied upon a partial defence in Article 21(2), available where the damage complained of was not due to negligence or any other wrongful act or omission by the carrier or its servants or agents. Under Article 21(2), damages would be subject to a cap that limited the extent of the passengers’ recovery to 113,100 Special Drawing Rights (“SDRs”) each.
The appellant passengers replied that Air Canada had waived the partial defence in Article 21(2), pursuant to Article 25 of the Convention, because Air Canada’s International Passenger Rules and Fares Tariff (“the Air Canada Tariff”) provided in rule 105(C)(1)(a) that ‘[t]here are no financial limits in respect of death or bodily injury’.
Article 21 provides:
‘Article 21. Compensation in Case of Death or Injury of Passengers
(a) such damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or
(b) such damage was solely due to the negligence or other wrongful act or omission of a third party.’
Article 25 provides:
‘Article 25. Stipulation on Limits
A carrier may stipulate that the contract of carriage shall be subject to higher limits of liability than those provided for in this Convention or to no limits of liability whatsoever.’
The High Court firstly held that rule 105(C)(1)(a) provided an accurate statement of the meaning of Article 17 of the Montreal Convention as the travaux préparatoires to the Convention were replete with references to liability for personal injury or death within the terms of Art 17 being ‘unlimited’ [50]. The Court therefore determined that rule 105(C)(1)(a) was concerned with the subject matter of death or bodily injury, not with the limit or threshold for the application of the Article 21(2) defence [50].
The Court also held, inter alia, that rule 105(C)(1)(a) immediately preceded rule 105(B)(5) which provided that the liability rules of the Montreal Convention were ‘fully incorporated’ in the Air Canada Tariff, even to the extent of providing that those liability rules prevailed over any inconsistent provisions of the Air Canada Tariff [53]. The Article 21(2) defence was therefore found to have been retained, despite the wording of rule 105(C)(1)(a).
Accordingly, High Court (Gageler CJ, Edelman, Steward, Gleeson and Beech-Jones JJ) held that while Article 25 empowered Air Canada to waive the partial defence under Article 21(2), Air Canada did not do so – as the NSW Court of Appeal had concluded (Leeming JA with whom Payne JA and Griffiths AJA agreed).
It is somewhat surprising that the dispute, as to the meaning and effect of Article 21(1) and Air Canada’s Tariff, was subject to a initial ruling and then two subsequent appeals. It is certainly a cautionary tale for carriers to ensure that there is no ambiguity in their terms and conditions or conditions of carriage concerning liability.
In SMT Global Logistics Ltd v Georgian Airlines LLC [2025] EWHC 739 (Comm), 24 February 2025, the defendant airline challenged the court’s jurisdiction to hear the claimant logistics company’s claim for damages for breach of a contract for the carriage of goods by air. The claimant applied for permission to serve the claim form on the defendant out of the jurisdiction.
The defendant purported to terminate the contract, which the claimant treated as repudiation. The claimant had prepaid for flights, but the defendant only repaid a partial amount.
One of the issues the High Court was asked to resolve was whether the Montreal Convention applied such that the English court lacked jurisdiction.
Bryan J held, inter alia, that the Montreal Convention did not apply. The Convention was concerned with the carriage of passengers, baggage and cargo, not any other claims under a contract of carriage.
The judge found that the claimant was seeking the repayment of payments that it has made, damages in respect of a failure to return a piece of equipment and other consequential losses including loss of profits for the defendant’s failure to carry the goods at all. Such claims were not within the scope of the Montreal Convention and nor was the clamant making a claim for damage to cargo, for death or bodily injury, or for damage occasioned by delay in the carriage by air of passengers, baggage or cargo [34] and [46].
Article 29 provides that:
‘In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. In any such action, punitive, exemplary or any other non-compensatory damages shall not be recoverable.’
In examining Article 29, the judge found that there were three recognisable strands of authority where the Convention did not apply. First, cases concerned with non-performance rather than delay (so called “bump” or denied boarding cases). Secondly, personal injury claims where the claims were for declaratory relief (e.g. in relation to disability, though not for damages). Thirdly, claims for compensation under EU Regulation 261/2004 which is ‘out-with the Convention regime’ [37].
Article 33(1) states that:
‘An action for damages must be brought, at the option of the plaintiff, in the territory of one of the States Parties, either before the court of the domicile of the carrier or of its principal place of business, or where it has a place of business through which the contract has been made or before the court at the place of destination.’
In looking at Article 33(1), the judge held that it did not relate to any and all claims that may be made between two contracting parties, one of whom is an airline and the other of whom is contracting for services under a contract. The judge considered that Master McCloud had been right in Silverman v Ryanair [2021] EWHC 2955 (QB) to draw a distinction at [64] between a ‘claim for damages for breach of the Convention’ and ‘a claim in the law of contract’. This was supported by the decision of the United States District Court for the Southern District of New York in Weiss v. El Al Israel Airlines, Ltd, 433 F. Supp. 2d 361, 369 (S.D.N.Y. 2006) in which it was held that the Montreal Convention governed delays in furnishing transportation but did not cover total breach of contract involving denial of transportation where a passenger is “bumped” by the airline.
The Court also drew assistance from Shawcross and Beaumont: Air Law VII at [410]: ‘The Convention did not purport to deal with all matters relating to contracts of international carriage by air’ [42].
The judge lastly held that, if contrary to the conclusions he had reached, and the Montreal Convention were to be applicable to any of the claims advanced, on the defendant’s own case, the Court would have jurisdiction under Article 33(1) in respect of any claims where London Stansted was the intended destination and such claims were advanced in the claim. The Court would, on that hypothesis, have jurisdiction in respect of those claims in any event [47].
Although the defendant’s arguments on the application of the Convention were, to put it mildly, ambitious, the judgment provides a welcome view of the authorities on the exclusivity of the Convention. The case also serves as a timely reminder for parties to consider including express exclusions for potential causes of action or statutory provisions (as is typical to see, for example, with the Sale of Goods Act or the Contracts (Rights of Third Parties) Act).
In Brink’s v Air Canada [2025] FC 110 (20 January 2025), security company Brink’s sued Air Canada after a shipment of banknotes and 6,600 gold bars from Zurich, Switzerland, was stolen on 17 April 2023, when someone presented a forged document to collect the goods from an Air Canada holding facility at the airport.
Brink’s argued it was due almost US$15 million after Air Canada failed to properly secure the cargo and failed to properly examine and authenticate the document used to access and steal the goods. Brink’s said it made a “special declaration of interest” when it booked the cargo using the airline’s AC Secure, a service provided by the airline for the transportation of valuable cargo. By selecting a process which purportedly recognised that high-value items required unique handling, Brink’s argued that it had implicitly conveyed its special interest in the cargo and thus Air Canada’s liability was unlimited.
In its defence Air Canada claimed that Brink’s had failed to declare the monetary value of the cargo on its waybill, and therefore failed to make a special declaration of interest, and thereby its liability was limited by Article 22(3) of the Montreal Convention to 8,811 Special Drawing Rights (“SDRs”) for the gold bars and 1,177 SDRs for the banknotes.
Article 22(3) provides as follows:
‘In the carriage of cargo, the liability of the carrier in the case of destruction, loss, damage or delay is limited to a sum of 26 Special Drawing Rights per kilogramme, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the consignor’s actual interest in delivery at destination.’
Justice Cecily Strickland held that a plain reading of Article 22(3) indicated that a consignor’s “interest” must be, or at least include, the declared monetary value of the cargo. That is because Article 22(3) contemplated a comparative exercise between “the declared sum” and the consignor’s “actual interest”, to determine which is “greater” for the purposes of discerning the carrier’s liability. The judge held that this exercise would be ‘impossible’ if there were no declared sum and if a monetary value was not also attached to the consignor’s “actual interest” [93].
Whilst the Court held that the declaration of value need not necessarily be on the face of the air waybill, the monetary value of the cargo must be provided in writing to the carrier in order to trigger the higher limits found in Article 22(3) [94].
The Federal Court of Canada ruled that while the evidence confirmed that Brink’s did convey to Air Canada that what they were shipping was considered “valuable,” it did not provide the carrier with the monetary value of the cargo.
Whilst documents containing the words ‘Valuable’, ‘SECURED’ and ‘SPECIAL SUPERVISION’ had been communicated to Air Canada, and Brink’s had booked the transport of the cargo through AC Secure, this evidence on its own did not amount to a “special declaration of interest” for the purposes of Article 22(3) because it did not incorporate a monetary value of the cargo [155].
Brink’s further argued that has the declared value of the cargo had been put in the Customs declaration of the air waybills, this declared value for Customs amounted to a “special declaration of interest” to the carrier.
The judge also rejected this argument, holding that a “Declared Value for Carriage” box and a separate “Declared Value for Customs” box of the air waybills suggested that these two values address different purposes [166]. The declaration of value triggers how Air Canada would respond to the request for carriage, while declaring a value for Customs had ‘little bearing on the carrier-shipper relationship’ [169].
Furthermore, the judge held that a declaration of value for carriage was between the carrier and the shipper in respect of the applicable freight rate and charges for the carriage of the shipment. In contrast, a special declaration of interest in delivery at destination directly implicates the carrier-shipper relationship as it notifies carriers of the nature of the cargo and the worth imported onto it by the consignor, which in turn informed how the carrier was to handle the cargo in the air carriage process [168].
Justice Cecily Strickland therefore held that Brink’s had failed to establish that it made a special declaration of interest in delivery at destination for the shipments and had failed to establish that it paid a supplementary sum when it booked the transportation of the shipments with Air Canada. Air Canada was duly ordered to pay Brink’s just 9,988 in Special Drawing Rights, worth approximately $19,000 Canadian dollars.
The case represent a stark warning to consignors / cargo owners to ensure the correct and express information is provided to carriers, particularly the monetary value of the cargo. Proforma documents must be checked careful to ensure that express declarations of value, and other important information such as storage and minimum security arrangements, are provided for the carriers’ attention and govern their obligations.
[1] Although the cap/limit has now been increased to 128,821 SDRs,
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