Federal Insurance Company v. Yusen Air & Sea Service(s) Pte. Ltd. Doing Business as Yusen Air Cargo
Docket: 2000
Court: Court of Appeals for the Second Circuit; November 12, 2000; Federal Appellate Court
Federal Insurance Company appeals a judgment from the U.S. District Court for the Southern District of New York that limited its damages to $380. The Second Circuit, upon de novo review, reversed this limitation, concluding that Yusen Air Sea Service(s) Pte. Ltd.'s air waybill did not comply with Article 8(c) of the Warsaw Convention, thus disallowing the liability limitations under Article 22(2). The case originated from the loss of 6,000 pieces of integrated circuits, valued at $324,000, which were to be shipped by Yusen from Singapore to Massachusetts. After the cargo was picked up by Yusen on August 18, 1995, it was delivered to KLM Airlines, which subsequently reported that the cargo could not be located. Federal Insurance Company, as the subrogated underwriter for the cargo's purchaser, commenced this action against Yusen under the Warsaw Convention for the non-delivery of the cargo. Yusen had previously initiated a third-party action against KLM, which has since been settled.
After the plaintiff filed for summary judgment, Yusen sought partial summary judgment to limit the plaintiff's damages to $380, based on the cargo's weight and the limitation set forth in Article 22(2) of the Warsaw Convention. The district court granted Yusen's motion, capping its liability at $380. Subsequently, the plaintiff obtained summary judgment affirming Yusen's liability for the cargo loss, resulting in a judgment of $380 against Yusen. The plaintiff appealed the damage limitation, while Yusen did not contest its liability.
Article 22(2) of the Warsaw Convention limits a carrier's liability to $20.00 per kilogram unless the shipper declares a higher value and pays an additional fee. It was agreed that the shipper, NECX, did not declare a greater value or pay extra fees. However, the plaintiff contended that Article 9 of the Convention prevents Yusen from invoking this limitation because it accepted the cargo without an air waybill or the air waybill lacked required details as per Article 8(a)-(i) and 8(q).
The court agreed with the plaintiff that Yusen's Air Waybill did not meet Article 8(c) requirements, which mandate that it specify agreed stopping places. The court noted that while a carrier can reserve the right to change stopping places, any such changes must not affect the international nature of the transport. The district court found Yusen’s Air Waybill compliant with Article 8(c) by incorporating KLM’s timetables, providing sufficient information about the scheduled Amsterdam stopover. However, subsequent rulings clarified that the information must be accurate and complete to fulfill the requirements, suggesting the adequacy of the timetables was questionable under newer standards.
Yusen's Air Waybill does not list Amsterdam as a stopping point, and despite including flight details for KL838 and KL639, it fails to meet the court's requirement for accurate and complete flight information. Although KL838 from Singapore to Amsterdam is correctly identified, KL639 did not exist on the shipment date of August 20, 1995. Yusen contends that NECX could deduce Amsterdam as a stop based solely on flight KL838 and KLM's timetables, which reportedly indicated transport from Amsterdam to Boston on Flight 8039. This argument was previously considered and rejected, as the court emphasizes the necessity of accurate flight information without requiring shippers to infer details from incomplete listings. The precedent set in Intercargo mandates strict compliance with transfer information, which Yusen's Air Waybill fails to achieve due to the incorrect flight number. Consequently, the court reverses the district court's decision, stating that Yusen's Air Waybill does not comply with Article 8(c), rendering the liability limitation in Article 22(2) inapplicable. The case is remanded for a determination of damages owed by the defendant.
