South-Western Legal Studies in Business

Warsaw Convention Governs Estimation of Damages to Freight Shipment
Description Appeals court affirmed that under the Warsaw Convention, in an international shipment of goods not specifically covered by another insurance arrangement, the carrier was liable for damages based on the weight of the entire shipment, not just the weight of the portion of the goods being shipped that were actually damaged.
Topic International Law
Key Words Freight Forwarder Liability; Warsaw Convention
C A S E   S U M M A R Y
Facts Motorola hired K&N to transport a cellphone base station system worth $5 million from Dallas to Tokyo. The system was packed in 20 crates for shipping. One was damaged, requiring repairs of $470,000 to the system. Motorola sued the shipper for damages under the Warsaw Convention. The Warsaw Convention provides carrier liability to be limited to $20 per kilogram for the shipment, unless special arrangements have been made to insure the shipment for a greater value, which had not been done. K&N contended it was liable for damage based on the weight of the one container; Motorola contended the damages were based on the weight of the entire shipment. The trial court agreed with Motorola and awarded $244,000 in damages. K&N appealed.
Decision

Affirmed. Article 22 of the Warsaw Convention, which governs this matter, specifies the limits on damages. The evidence from other international law, including the Hague Protocol, indicates that the damages are to be based on the weight of an entire shipment, not just the part of the shipment actually damaged. Hence, the $20 per kilogram damage claim applies to the weight of the entire shipment of 20 crates, not just the one crate that was damaged.

Citation Motorola v. Federal Express Corp., 308 F.3d 995 (9th Cir., 2002)

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