1. Eastern Mediterranean University
BANK406
Corporate Banking Law and Practice
CHP 5

2. Carriage by Air
● Carriage by air is regulated by two international conventions that are Warsaw Convention of 1929 (the original convention) and Warsaw Convention of 1995 (the amended convention). Application of Warsaw Convention of 1929; This convention is applicable when destination and departure points in two states that are both parties to this convention but not parties to the amended convention. The Convention is about carrier’s liability. Carrier is liable while the goods are in his charge, whether at an airport or not. Carrier’s liability is not extended to carriage incidentally and outside an airport. The air way-bill is the document prepared by the consignor. Either the carrier requests or the consignor prepares it and requires the carrier to accept it. Separate air way-bills must be prepared for separate packages.

3. ● The air way-bill is the document prepared by the consignor
● The air way-bill is the document prepared by the consignor. Either the carrier requests or the consignor prepares it and requires the carrier to accept it. Separate air way-bills must be prepared for separate packages. * Absence of air-way bill will not affect the validity of the contract or the application of the Convention but it may prevent the carrier from enjoying the benefit of limitations of liability. ● Items that must appear on the air way-bill are; -Nature of the goods -The method of packing and marks or numbers on them -The weight -Quantity and volume/dimensions -The apparent condition of the goods and their packaging -Statement that carriage is subject to the Convention rules on liability of the carrier *Absence of any of the items mean the carrier would not enjoy limitations of liability and the consignor is responsible for the accuracy of the items including damages because of omission or inaccuracy.

4. ● The carrier’s liability; Carrier is liable for loss or damage while he is in charge. If loss or damage happens as a result of delay, the carrier is liable unless he proves that he has taken all necessary measures to prevent delay. Also the carrier is not liable if he proves that the damage is caused by negligent pilotage. ● Successive Carriers; The carrier may sub-contract the whole or parts of the carriage to other carriers. Each successive carrier is the actual carrier of that part of the carriage and is responsible. As a result the consignor has right of action against both the first carrier and the actual carrier. ● Limitation of action; The consignee should give written notice within 7 days. Action should be brought within 2 years after date of arrival or date when the goods should have arrived or the date when the carriage terminated.

5. Application of Warsaw Convention 1955; States of departure and destination points must be party to the convention. It should be noted that flights outside the normal course of the carrier’s business are also within this convention. * The air way-bill includes departure and destination points, stopping points and a warning that the carrier’s liability can be limited if this convention is applied. ● Carrier is liable if he has intention to cause damage. The carrier is also liable if he causes damage recklessly and with knowledge that damage would occur. It should be noted that a servant or agent also enjoys these limitations.

6. Carriage by Land
● Road; International carriage by land is regulated by CMR Convention 1956 (full title: Convention on the Contract for the International Carriage of Goods by Road). This Convention is applicable when place of taking over and designated place of delivery are in two different countries and at least one of these countries is party to the Convention. The consignment note; It is the name given to the document prepared for this mode of carriage. Sender is liable for loss or damage caused as a result of inadequacy or inaccuracy of information written on this document. If there is no statement on the document about the convention, the carrier cannot enjoy the limitations of liability included in the CMR Convention Although the consignment note is not a document of title, it is evidence of the carriage contract and receipt of the goods.

7. ● Right of Disposal; The consigner has the right to dispose by asking the carrier; to stop goods in transit, to change the place at which delivery is to be made, to deliver the goods to a consignee other than the one designated in the consignment note. The consignor is responsible for loss or expense occasioned by his exercise of this right must not interfere with the carrier’s operations or prejudice other senders or consignees. ● Successive Carriers; Each successive carrier under a single contract for international road carriage is responsible for the whole operation and each of them is a party to the contract of carriage. ● The Carrier’s Liability; The carrier is liable for loss of or damage to the goods including loss caused by delay. In some cases, which the carrier could not avoid and he was unable to prevent the damage and the consequences, he cannot be held liable. It is carrier’s duty to prove these points.

8. ● Limitation of Action; The consignee must give notice to the carrier at the time of deliver in cases of apparent loss or damage. The notice must be given within 7 days of delivery if the loss or damage is not apparent. On the other hand in cases of loss caused by delay, the notice should be given within 21 days. As a principle limitation of action is 1 year. In case of willful misconduct of the carrier this period is 3 years. ● Sale Contracts based on Road Carriage; Such contracts permit door-to-door transport by a single vehicle. Contracts are usually made on ex-works or free-delivered. In international road carriage, contracts are frequently made on the terms free delivered frontier (the frontier of the seller’s country) in which property and risk will pass to the buyer at this point.

9. ●Carriage by Rail; Application of CIM (full title : Convention concerning International Carriage of Goods by Rail) Convention 1970.This convention can be applied to carriage of goods through consignment note for carriage over the territories of at least 2 contracting states on railway lines designated as international. Carriers Liability; The carrier is liable for loss of or damage to the goods including loss caused by delay. In some cases, which the carrier could not avoid and he was unable to prevent the damage and the consequences, he cannot be held liable. It is carrier’s duty to prove these points. Limitation of Action; Limitation of action is one year. In cases of willful misconduct or fraud this period is 2 years.

10. ● Sale contracts based on rail carriage; Contracts are usually made on free on rail. This is like ex-works but here the seller should deliver the goods into the charge of a railway carrier and pays all the expenses up to this point including the cost of packing. After that point, all risks and expenses pass to the buyer.

11. End of the chapter -5