United States District Court, Southern District of New York
June 27, 1991
DISTRIBUIDORA DIMSA S.A., PLAINTIFF,
LINEA AEREA DEL COBRE S.A., D/B/A LADECO, DEFENDANT.
The opinion of the court was delivered by: Mukasey, District Judge.
OPINION AND ORDER
This motion for summary judgment raises one issue: whether
the defendant is barred from raising the liability limitation
of the Warsaw Convention ("the Convention") under Article 9 of
the Convention because the two air waybills accepted by
defendant do not comply precisely with the requirements of
Article 8. Plaintiff's motion to bar defendant's Affirmative
Defense based on Article 9 of the Warsaw Convention is denied.
This case arises out of two shipments of electronic
equipment from Florida to Chile. Plaintiff DIMSA was the
consignee of the shipments, transported by defendant LINEA
AEREA DEL COBRE S.A. d/b/a LADECO. Plaintiff alleges that the
shipments were partially missing and damaged, and sues
defendant for the full value of its consequent loss. The
parties agree that the shipments in dispute moved by air from
the United States to Chile, both of which are signatories to
the Convention, and, accordingly, liability is governed by the
Article 8 states in relevant part:
The air waybill shall contain the following
particulars: . . .
(h) The number of packages, the method of
packing, and the particular marks or numbers upon
(i) The weight, the quantity, the volume, or
dimensions of the goods;
Chan v. Korean Air Lines, Ltd., 490 U.S. 122
, 109 S.Ct. 1676,
1682 n. 4, 104 L.Ed.2d 113 (1989). Article 9 provides that:
If the carrier accepts goods without an air
waybill having been made out, or if the air
waybill does not contain all the particulars set
out in article 8(a) to (i), inclusive, and (q),
the carrier shall not be entitled to avail
himself of the provisions of this convention
which exclude or limit liability.
Id., 109 S.Ct. at 1682-83 n. 4.
It is undisputed that although the air waybills governing
the shipments at issue showed the weight of the two shipments
and the number of pieces, there was no indication on either
waybill as to the method of packing or as to particular marks
or numbers on the packages. The air waybills also lacked
information about the volume or dimensions of the shipments.
The issue here is how, following the recent Supreme Court
decision in Chan, supra, Article 8 is to be interpreted.
Prior to Chan, the law of the Second Circuit was clear that
failure to comply with Article 8 did not prevent a carrier from
limiting liability where the omissions were commercially
insubstantial and non-prejudicial. Exim Industries, Inc. v. Pan
America World Airways, Inc., 754 F.2d 106, 108 (2d Cir. 1985);
Republic National Bank v. Eastern Airlines, Inc., 815 F.2d 232
(2d Cir. 1987). The air waybills in question in Exim were
missing the method of packing, the numbers on the packages and
a properly worded notice of the Warsaw Convention's
applicability. Nevertheless, the Circuit held that the
Convention applied to limit the defendant's liability. The
Court reasoned that the omissions were technical and
non-prejudicial to the plaintiff under the facts of the case.
The plaintiff there, like plaintiff here, received adequate
notice of the applicability of the Convention and its
limitation on recovery for losses, and accordingly had an
opportunity to pay a higher shipping rate in order to insure
itself to the full value of the shipment. Having chosen not to
do so and paid a lower rate, a plaintiff may not later claim
that the waybills were technically defective in order to evade
the loss limitations of the Convention.
The Second Circuit in Exim relied on the reasoning of an
English case in the House of Lords to support its commercial
interpretation of Article 8 of the Convention. The English
interpreted Article 8, sections (h) and (i), using two
different texts, the official French text and the English
translation. Determining that both texts were ambiguous, and
that neither the English nor the French version, literally
translated, made sense, the House of Lords relied on
commercial reasonableness to fix the meaning of both sections.
It held that "weight" is the measure that is generally most
important, and therefore necessary whenever appropriate, and
that so long as weight is given, the other particulars in
section (i) need be listed only if they are necessary or
useful in a particular case. The air waybill must include only
those particulars in Article 8 which are "necessary or useful
to determine the amount of the freight, or to determine any
other condition upon which the parties were prepared to enter
into the contract." Corocraft Ltd. v. Pan American Airways,
Inc.,  1 Q.B. 616. The law Lords specifically
acknowledged that they were not applying a literal
interpretation of either the French or the English text. Id. at
672; see also id. at 675 (Widgery, L.J., concurring). The
Second Circuit adopted this approach in Exim, 754 F.2d at 108,
and reaffirmed it in Republic National, 815 F.2d at 238.
In Chan, the Supreme Court resolved a conflict in circuit
decisions over whether air carriers must give their passengers
clearly legible notice that the Convention applies before those
carriers may limit their liability under Article 3 of the
Convention, which reads in relevant part as follows:
(1) For the transportation of passengers the
carriers must deliver a passenger ticket which
shall contain the following particulars:
(e) A statement that the transportation is
subject to the rules relating to liability
established by this convention.
(2) The absence, irregularity, or loss of the
passenger ticket shall not affect the existence
or the validity of the contract of
transportation, which shall none the less be
subject to the rules of this convention.
Nevertheless, if the carrier accepts a passenger
without a passenger ticket having been delivered
he shall not be entitled to avail himself of
those provisions of this convention which exclude
or limit his liability.
Chan, 109 S.Ct. at 1679-80.
Rejecting the view of this Circuit and others which held
that the ticket had to provide clearly legible notice, the
Court reasoned as follows: "We cannot accept this
interpretation. All that the second sentence of Article 3(2)
requires in order to avoid its sanction is the `deliver[y]' of
`a passenger ticket.' Expanding this to mean `a passenger
ticket in compliance with the requirements of this Convention'
is rendered implausible by the first sentence of Article 3(2),
which specifies that `[t]he . . . irregularity . . . of the
passenger ticket shall not affect the existence of the
validity of the contract of transportation, which shall none
the less be subject to the rules of this convention.'"
Id., 109 S.Ct. at 1680.
The Court found further support for its interpretation by
contrasting Section I, which contains Article 3, with Sections
II and III, which contain Articles 4 and 8 respectively: "But,
unlike Section I, Sections II and III also specifically impose
the latter sanction [elimination of a defense based on clauses
limiting or excluding liability] for failure to include in the
documents certain particulars." Id. at 1682 (emphasis in
original). "We must thus be governed by the text — solemnly
adopted by the government of many separate nations — whatever
conclusions might be drawn from the intricate drafting history
that petitioners and the Solicitor General have brought to our
attention. The latter may of course be consulted to elucidate a
text that is ambiguous. . . . But where the text is clear, as
it is here, we have no power to insert an amendment. As Justice
Story wrote for the Court more than a century and a half ago:
`[T]o alter, amend, or add to any treaty, by
inserting any clause, whether small or great,
important or trivial, would be on our part an
usurpation of power, and not
an exercise of judicial functions. It would be to
make, and not to construe a treaty. Neither can
this Court supply a casus omissus in a treaty, any
more than in a law. We are to find out the
intention of the parties by just rules of
interpretation applied to the subject matter; and
having found that, our duty is to follow it as far
as it goes, and to stop where that stops —
whatever may be the imperfections or difficulties
which it leaves behind.'"
Id. at 1683-84.
Although several Second Circuit Warsaw Convention cases have
been decided since Chan, none has required the majority of the
Court to determine whether the Supreme Court's holding in Chan
has affected the Exim line of cases. Judge Van Graafeiland
reached that issue in dissent in Victoria Sales Corp. v. Emery
Air Freight, Inc., 917 F.2d 705 (2d Cir. 1990), and found that
Chan did not overrule Exim. The majority did not have occasion
to consider the issue, having found that the district court
erred in determining that the Convention applied at all,
because the loss in dispute occurred at an airport warehouse a
short distance outside the perimeters of the airport, rather
than inside it.
Although the Emery majority did not specifically reexamine
the Exim line of cases, its reasoning bears somewhat on the
issue at hand. The majority recognized the commercial realities
of modern day airports, where airport warehouses may be located
just outside the perimeters rather than in it, but then wrote:
"Although cognizant of the commercial realities that may force
the location of a warehouse outside of the actual confines of
an airport, we must reject the proposed interpretation of
Article 18 because it has no support in the language of the
Convention. Our interpretation of Article 18 must begin `with
the literal language of the provision. . . . Furthermore, when
the text of a treaty is clear, a court shall not, through
interpretation, alter or amend the treaty.'" Id., 917 F.2d at
707 (citing Chan).
At first glance, the Circuit's reasoning in Emery appears to
contradict, and therefore implicitly to overrule, its reasoning
in Exim. The Court adhered strictly to the text of the
Convention rather than construe it to reflect commercial
realities. However, when further considered, the Circuit's
opinion in Emery does not conflict with Exim. The provision of
the Convention construed in Emery was unambiguous. Construction
of the provision to reflect considerations other than its text
meant rewriting the treaty, a task not vouchsafed to the
judiciary. Exim involved an interpretation of provisions that
are ambiguously drafted. Interpretation of an ambiguous treaty
provision necessarily requires consideration of factors other
than its text. Emery does not therefore compel a finding that
the reasoning of Exim has been implicitly overruled.
A district court has no authority to reject a doctrine
developed by a higher court unless subsequent events make it
"almost certain that the higher court would repudiate the
doctrine if given a chance to do so." Olson v. Paine, Webber,
Jackson & Curtis, Inc., 806 F.2d 731, 734 (7th Cir. 1986). I
believe that because there are grounds to find that the Supreme
Court's decision in Chan would not cause the Second Circuit to
reexamine its interpretation of Article 8, sections (h) and
(i), I am bound to find that the waybills in dispute here do
contain all of the particulars required by that Article, and
that defendant may therefore invoke the limitations on
liability of the Warsaw Convention.
Unlike the provisions of the Warsaw Convention interpreted
in Chan and in Emery, and despite the apparent clarity of the
text of sections (h) and (i) as cited, but not ruled on, in
Chan, both sections are ambiguously drafted. Although the
English translation of section (h) states unequivocally that
the waybill must include the number, method of packing and
either the particular marks or numbers upon them, "[b]ecause
the only authentic text of the Warsaw Convention is in French,
the French text must guide our analysis." Eastern Airlines,
Inc. v. Floyd, ___ U.S. ___, 111 S.Ct. 1489, 1493, 113 L.Ed.2d
(1991). The official French text is as follows:
(h) Le nombre, le mode d'emballage, les marques
particulieres ou les numeros des colis.
(i) Le poids, la quantitie, le volume ou les
dimensions de la marchandise.
Corocraft, supra, at 667.*fn1 The official French text
contains the conjunction "ou" or "or," which has made the text
susceptible to various reasonable interpretations, including
that the "or" connotes a choice only between the last two
listed alternatives while the first two are required, or that
any of the listed alternatives is sufficient. See Corocraft v.
Pan American Airways,  1 Q.B. 622, 1969 U.S.Av.R. 676,
691-92, rev'd  1 Q.B. 616. Absent binding precedent to
the contrary I would be inclined to interpret both sections to
require inclusion of three of the four particulars. "Volume"
and "dimensions" operate as alternative means for giving
essentially equivalent information, just as a package can
reasonably be described by either "particular marks" or
"numbers" on it. On the other hand, to my mind, the other
particulars required by these sections do not operate as
alternatives. Each conveys information not provided by the
others. Therefore, I would interpret sections (h) and (i) to
require only three of the four particulars listed: the first
two, and a choice, depending upon the circumstances, between
the final two — in other words, I would read the clause as if
the conjunction "or" applied only to the final two particulars;
both sections should have been translated to include the
conjunction "and" between the second and third particulars.
Nevertheless, either section can reasonably be read wholly in
the disjunctive — that is, to require only one of the four
particulars mentioned in each section.
The Supreme Court recently reaffirmed the principle that
when passages are ambiguous, "treaties are construed more
liberally than private agreements, and to ascertain their
meaning we may look beyond the written words to the history of
the treaty, the negotiations, and the practical construction
adopted by the parties." Eastern Airlines, 111 S.Ct. at 1493.
Achieving international uniformity in rules governing claims
arising from air transportation was the stated objective of
the Convention. Id., 111 S.Ct. at 1502; see Reed v. Wiser,
555 F.2d 1079 (2d Cir.), cert. denied, 434 U.S. 922, 98 S.Ct. 399,
54 L.Ed.2d 279 (1977); Denby v. Seaboard World Airlines, Inc.,
737 F.2d 172, 175 (2d Cir. 1984). If this Court were to adopt a
construction of Article 8, sections (h) and (i), that required
that all of the particulars mentioned in those sections be
included in air waybills before the loss limitation provisions
of the Convention could be invoked, that construction would put
this country in conflict with many other signatories of the
Convention. See Corocraft, supra; Dico Handel-en Industrie Mij.
N.V. v. Garuda Indonesian Airways, P.N., No. 83 Schip en Schade
1970, 199 (Dist.Ct. Amsterdam, Oct. 29, 1969); Black Sea &
Baltic General Insurance Co. Ltd. v. Scandinavian Airlines
System (Zurich High Court, 2d Civ. Chamber (March 4, 1966)).
Inconsistency of interpretation is particularly undesirable
where, as here, the decision affects commercial behavior;
despite less demanding interpretations of these sections
prevailing elsewhere, parties who deal with U.S. shippers would
be forced to conform to the stricter standard, in anticipation
of being sued in courts where U.S. law applies.
If this result were required by the text, the issue would be
one for Congress and not the court. The text, however, does
not demand such an interpretation. When possible,
interpretations that yield anomalous results should be
avoided. National Foods, Inc. v. Rubin, 936 F.2d 656 (2d Cir.
1991). Faced with an ambiguous text and the international
acceptance accorded the interpretation adopted in Exim, I
not and do not find that Chan has had the effect of overturning
For the reasons discussed above, plaintiff's motion for
partial summary judgment striking defendant's affirmative
defenses based on the applicability of Article 9 of the Warsaw
Convention is denied.