Petition for Writ of Certiorari — South African Airways v. Brink's Ltd.
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OFFICE OF Te CER
IN THE
Supreme Court of the United States
OCTOBER TERM 1996
_>—
SOUTH AFRICAN AIRWAYS,
Petitioner,
—Vi—
BRINK’S LIMITED,
Respondent.
ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
FRANKLIN F. BASS
Counsel of Record
JOSEPH ZUCKERMAN
MICHAEL I. VERDE
ROSENMAN & COLIN LLP
575 Madison Avenue
New York, New York 10022
(212) 940-8800
Attorneys for Petitioner
South African Airways
i
QUESTION PRESENTED FOR REVIEW
Did the Court of Appeals err in construing Article 25 of the
Warsaw Convention, which requires, in order to avoid the
limitation of liability provisions of the Convention, that a
determination of “wilful misconduct” or equivalent default be
made “in accordance with the law of the Court to which the
case is submitted,” by holding that the law of the Republic cf
South Africa and not the substantive law of the forum New
York must be applied?
QUESTION PRESENTED FOR REVIEW
THE PARTIES
JURISDICTION
PROVISIONS OF LAW INVOLVED
STATEMENT OF THE CASE
THE OPINIONS BELOW
ARGUMENT
II.
III.
IV.
CONCLUSION
il
TABLE OF CONTENTS
The Decision of the Court of Appeals Below
Conflicts With Both the Language and Intent
of the Warsaw Convention and the Prior
Uniform Construction of “Wilful Misconduct”
ee 5 Sane pep Centr se ya ENTE CREE Ae aaa
The Analysis Adopted by the Court of Appeals
Forces Courts To Speculate Where the Wilful
Misconduct Occurred Before Hearing The
UNOS oid ook biben disobedient ee a
This Court Has Long Recognized the Conven-
tion’s Objective Of A Uniform Limitation of
Liability Role For Lost Cargo .......cccccscences
The Second Circuit Misapplied This Court’s
Decision in Zicherman v. Korean Air Lines Co...
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even eeev eee enweeees
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12
14
15
17
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TABLE OF AUTHORITIES
Federal Cases PAGE
In re Air Disaster at Lockerbie, Scotland on Decem-
ber 21, 1988, 37 F.3d 804 (2d Cir. 1994), cert.
denied sub nom., Pan Am. World Airways v.
Pagnucco, 115 S. Ct. 934, 130 L. Ed. 2d 880
Se ORES EES pee 1 a a Rea 9-10, 11, 13
Bank of Nova Scotia v. Pan American World Airways
16 Avi. 917,378, (S.D.N.Y. | ER RRR AR ee 1]
Brink’s Limited v. South African Airways, 93 F.3d
1022 (2d Cir. 1996) ...... SWRA PAP enh ean vicwdes in By SO
Chan v. Korean Air Lines, 490 U.S. 122, 109 S. Ct.
1676, 104 L. Ed. 2d 113 (1989)................... 7
Delgado v. Pan Am. World Airways, 16 Avi. 918,463
Se RI el Sea age area 1]
KLM Royal Dutch Airlines vy. Tuller, 292 F.2d 775
(D.C. Cir. 1961), cert. denied, 368 U.S. 921
| SERENE as MRE be an en ee ie 10
In re Korean Air Lines, 932 F.2d 1475 (D.C. Cir.
1991), cert. denied, Dooley v. Korean Air Line-.
502 U.S. 994, 112 S. Ct. 616, 116 L. Ed. 2d 638
EE NCS SENET: MS has ina ae a 10, 11
Ospina v. Trans World Airlines, 975 F.2d 35
(2d Cir. 1992), cert. denied sub nom., Estate of
Ospina By Coughlin v. Trans World Airlines, 507
U.S. 1051, 113 S. Ct. 1944, 123 L. Ed. 24 650
GRPR Peat cave skine ce ee kf Mwhshh dons 1]
Pekelis v. Transcontinental & Western Air, 187 F.2d
122 (2d Cir. 1951), cert. denied, 341 U.S. 951.
71S. Ct. 1020, 95 L. ma. 1374 (1951)............ 1]
iV
PAGE
Perera Co. v. Varig Brazilian Airlines, 775 F.2d 21
Cae Gees SE 06 bckanstveddvaksckdnecscssebasbiaeos 13
Republic Nat. Bank of New York v. Eastern Airlines,
Bie Cade ee ee Wes BHT irk bd votincdsensneeasees 11
Rocca v. Thompson, 223 U.S. 317, 32 S. Ct. 207,
Fe heels GOF CEO Rees vuveknndddckccverbavstidecnes 15
Trans World Airlines v. Franklin Mint Corp., 466
U.S. 243, 104 S. Ct. 1776, 80 L. Ed. 2d 273
CRI kiid tkcaddeidencdcccenieaiedias oo wnbeseranes 14,15
Williams v. Fidelity & Cas. Co. of New York,
442 F. Supp. 455 (E.D. La., 1977) ................ 12
Zicherman v. Korean Air Lines Co., ___ U.S. __.,
116 S. Ct. 629, 133 L. Ed. 2d 596 (1996)...... 6, 15, 16
State Cases
Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743,
SSE Fee eee Ae ines kb eaesccuntadecntensects 14
Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66, 595
N.Y.S.2d 919, 612 N.E.2d 277 (1993)............ 12
Istim, Inc. v. Chemical Bank, 78 N.Y.2d 342, 575
N.Y.S.2d 796, 581 N.E.2d 1042 (1991)........... 14
Poplar v. Bourjois, Inc., 298 N.Y. 62, 80 N.E.2d 334
CRIED hn ncn d edn s cncdnysehovedeeariaetsep bakes’ 14
Rymanowski v. Pan American World Airways, Inc.,
70 A.D.2d 738, 416 N.Y.S.2d 1018 (3d Dept.
1979), aff'd, 49 N.Y.2d 834, 427 N.Y.S.2d 795,
GOS Fi. TAwO CUTE heknkev cis vise cinelieccses ody Se
Statutes
ee es CE is nbcob wads rencbuddasobs ants. 1
ne ee ee
PAGE
Convention for the Unification of Certain Rules
Relating to International Transportation by Air,
49 Stat. 3000, T.S. No. 876 (1934), reprinted in
49 U.S.C. § 1502 note (the “Warsaw Con-
PE Bic itn 0) vc cin cindscnteedatbedadstbansaas tan passim
Death on the High Seas Act (“DOHSA” ), 46 U.S.C.A.
§§ 761, et seq...... Veudeb adehs dias ehikiveee aul eew 15, 16
Foreign Sovereign Immunities Act of 1976 (“FSIA”),
Be ee BO Bs G8 BOE, 6 nicciisis cab users cece: i
Miscellaneous
Mankiewicz, The Liability Regime of the International
Carrier, § 20, at pp. 15-16 (1981 ed.)............ 8
Miller, Liability in International Air Transport, at
i BP EEE FE QDs id ok enanieds ney dxcudsveriessads 8-9, 12
AE VR, CE Ry tg oth sath + hapa,
Petitioner South African Airways (“SAA”) respectfully
prays that a writ of certiorari be issued to review a decision of
the United States Court of Appeals for the Second Circuit
(Brink’s Limited v. South African Airways, 93 F.3d 1022 (2d
Cir. 1996)) which reversed a decision and judgment of the
United States District Court for the Southern District of New
York and remanded the matter for a determination of certain
issues under the laws of the Republic of South Africa. (A. la-
30a).* The District Court, pursuant to the limitation of lia-
bility provisions of Article 22(2) of the Warsaw Convention,
had granted partial summary judgment in favor of SAA and
had entered a judgment for plaintiff, Brink’s Limited
(“Brink’s”), limited to $1,522. The opinion of the United
States District Court is unofficially reported at 1995 WL
225602. (A. 31a-37a).
THE PARTIES
The only parties in this proceeding are those identified in
the caption. Petitioner SAA is a division of Transnet Limited,
which is wholly owned by the government of the Republic of
South Africa.
JURISDICTION
The judgment of the Court of Appeals was entered on
August 8, 1996. SAA’s petition for rehearing was denied by
order entered September 20, 1996. (A. 40a-41a). This Court’s
jurisdiction is invoked pursuant to 28 U.S.C. § 1254.
PROVISIONS OF LAW INVOLVED
This case raises the interpretation of Article 25 of the War-
saw Convention, known formally as the Convention for the
Unification of Certain Rules Relating to International Trans-
portation by Air, 49 Stat. 3000, T.S. No. 876 (1934), reprinted
in 49 U.S.C. § 1502 note (the “Warsaw Convention”).
° References to “(A. ”) are to the Appendix to the Petition.
Article 25 of the Warsaw Convention, as codified by 49
Stat. 3000 T.S. 876, states:
(1) The carrier shall not be entitled to avail himself of
the provisions of this Convention which exclude or limit
his liability, if the damage is caused by his wilful mis-
conduct or by such default on his part as, in accordance
with the law of the Court to which the case is submitted,
is considered to be equivalent to wilful mis-conduct.
(2) Similarly the carrier shall not be entitled to avail
himself of the said provisions, if the damage is caused
under the same circumstances by any agent of the carrier
acting within the scope of his employment.
Statement of the Case’
Jurisdiction in the federal court was predicated under the
Foreign Sovereign Immunities Act of 1976 (“FSIA”), 28
U.S.C. §§ 1602, et seg. because SAA is wholly owned by the
government of the Republic of South Africa. The Warsaw
Convention provided the basis for the cause of action.
Rustenburg Platinum Mines Limited (“Rustenburg”) con-
tracted for SAA to transport boxes of unrefined precious met-
als by air from Johannesburg, South Africa, to New York,
pursuant to an airway bill dated September 10, 1992; the air
waybill did not contain a declaration of the value of the cargo.
Rustenburg also contracted for Brink’s, a corporation orga-
nized under the laws of England and Wales, to provide secu-
rity for the shipment and to indemnify Rustenburg for any
losses. At some time between the arrival of thirty-four boxes
of the precious metals at approximately 1 p.m. on September
10, 1992 at SAA’s high value cargo vault at Jan Smuts Airport
in Johannesburg and the arrival of the shipment the next day
at a British Airways cargo facility at John F. Kennedy Airport
in New York, six boxes of precious metals worth nearly $1.8
]
This summary of the facts is based upon the recitation contained
in the opinion of the Court of Appeals.
i Ee
ET
3
million disappeared out of a locked and sealed air cargo con-
tainer.
Before being placed in the cargo vault at the Jan Smuts Air-
port, the thirty-four boxes were counted by the courier for the
shipment (Lt. Gen. Malan of the South African Police
(“SAP”), the SAP officer assigned to the vault (Sergeant
Engelbrecht), the vault foreman, another SAP officer, and an
employee of the freight forwarding company. Thereafter, the
boxes were marked with air waybill labels and placed in an
all-metal container, designated AVE 1617, bound for New
York.
After padlocks had been affixed to the container, Sergeant
Engelbrecht noticed that despite the padlocks, the door to
AVE 1617 still could be opened. He informed Lt. Gen. Malan
of the problem and asked the vault foreman to provide a con-
tainer that could be locked. The vault foreman advised him
that no other containers were available. Thereafter, SAP and
SAA personnel closed and locked the high value cargo vault.
That evening, SAA personnel opened ‘the vault, removed
container AVE 1617, loaded it on a dolly and transported it
from the cargo facility to SAA Flight 201, destined for New
York. An armed SAP escort, including Lt. Gen. Malan,
accompanied the container. Lt. Gen. Malan then departed,
leaving one SAP Constable planeside to guard the shipment.
Two SAA cargo loaders loaded the container on board.
Except for a two-to-three minute interval, a SAA loadmaster
supervised the loading process. After container AVE 1617
was loaded into the hold, the SAP Constable positioned him-
self where he allegedly could see the stowage location of the
container. It took 20 to 60 minutes to load the remaining
cargo into the hold, as a result of which container AVE 1617
was “buried” in the hold.
The aircraft departed Jan Smuts Airport at 8:08 p.m. It
made a regularly scheduled refueling stop at Ilha Do Sal in
the Cape Verde Islands. Although cargo was removed from
the front holds in Ilha Do Sal, no cargo was removed from the
hold containing AVE 1617. Except for a short period of time
while he was in the rest room, Lt. Gen. Malan observed the
rear cargo hatch to that hold and testified that it was not
opened at any time during the stopover.
The aircraft arrived at John F. Kennedy International Air-
port at approximately 6:30 the following morning. SAA secu-
rity personnel met the aircraft, obtained the padlock keys
from Lt. Gen. Malan, and proceeded rampside, where the hold
containing AVE 1617 had been opened but not off-loaded.
The SAA personnel observed the off-loading of AVE 1617
and confirmed that the locks and seals were intact. Both the
SAA personnel and Port Authority police escorted the con-
tainer to a cargo facility of another airline. There the con-
tainer was opened in the presence of Brink’s and SAA
representatives, who immediately determined that six boxes
of the precious metals, worth approximately $1,789,012.07,
were missing from the shipment.
The Port Authority police, SAA and the Gold and Dia-
monds Branch of the SAP have investigated the disappearance
of the six boxes. Despite an apparently thorough investiga-
tion, there have been no arrests or convictions and the boxes
have not been recovered. Although SAP bulletins posted an
award to refiners handling similar materials, no sale or
attempted sale was ever reported. In sum, neither the police
authorities nor anyone else has been able to determine when,
where or by whom the six boxes of precious metals weighing
approximately 170 pounds disappeared from the locked and
sealed container AVE 1617.
Under its agreement with Rustenburg, Brink’s indemnified
Rustenburg for the entire loss. The gravamen of Brink’s com-
plaint is that the six boxes were stolen while in the custody of
SAA and that the limitation of liability provisions of Article
22(2) of the Warsaw Convention,’ which would limit SAA’s
‘ Article 22(2) of the Convention provides:
In the transportation of checked baggage and of goods, the liabil-
ity of the carrier shall be limited to a sum of 250 francs per kilo-
eS =—
TN AS ny ht a I Sta ED BO A ant 6
Se ee a RN NR na
eS le SNNENN
5
liability to 250 francs per kilogram or approximately $9.07
per pound, are inapplicable by reason of the “wilful miscon-
duct” provisions of Article 25 of the Convention. Specifically,
Brink’s contends that SAA is not entitled to avail itself of the
limitation of liability provisions of Article 22(2) because SAA
and/or SAA’s employees engaged in wilful misconduct and
that such misconduct proximately caused the )ss
After extensive discovery, SAA moved for partial summary
judgment that its liability be limited to $1,522 in accordance
with Article 22(2) of the Convention.
THE OPINIONS BELOW
(i) The Opinion of the District Court.
In granting partial summary judgment in favor of SAA. the
District Court first noted that in order to avoid the liability
limitation of Article 22(2), Brink’s must plead and prove facts
showing (a) that SAA engaged in wilful misconduct and (b)
that this wilful misconduct was the proximate cause of the
loss of the six boxes. (A. 33a; 93 F.3d at 1027).
Even accepting for sake of argument Brink’s contention
that SAA employees stole the boxes, the District Court held
that under the law of New York—the forum—SAA did not
engage in wilful misconduct and thus is entitled to the pro-
tection of the Article 22(2) limitation of liability. In so doing,
the District Court relied on Rymanowski v. Pan American
World Airways, Inc., 70 A.D.2d. 738, 416 N.Y.S.2d 1018 (3d
Dept. 1979), aff'd, 49 N.Y.2d 834, 427 N.Y.S.2d 795, 404
N.E.2d 1336 (1980) and its federal court progeny which hold
gram, unless the consignor has made, at the time when the package
was handed over to the carrier, a special declaration of the value at
delivery 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 he proves that that sum is greater than the
actual value to the consignor at delivery.
As noted above, Rustenburg’s air waybill did not contain a declaration
of the value of the cargo.
that thefts by airline employees are not committed in fur-
therance of the employees’ duties and that SAA would not
lose its limitation of liability protection under the Warsaw
Convention even if it were proven that an SAA employee
stole the six boxes. (A. 34a). The District Court wrote:
Apparently, every American court to address this issue
has held that the wilful misconduct exception to the War-
saw Convention’s limitation of liability does not apply to
acts of theft committed by employees.
(A. 34a).
(ii) The Opinion of the Court of Appeals
After reciting the facts discussed above (pp. 2-5 supra), the
Second Circuit held that the plain language of Article 25 of
the Convention meant that “ ‘wilful misconduct’ [must be
determined] under the law of the forum jurisdiction.” (A. 10a;
93 F.3d at 1028). The Court of Appeals also rejected Brink’s
argument that there was an “international interpretation” of
Article 25 and instead wrote:
[W]e believe that the drafters of the Convention recog-
nized the possibility of conflicting national policies with
respect to imputing liability to a carrier, but unmistak-
ably resolved any conflict by deferring to the law of the
forum jurisdiction. . . . In short, the literal language of
Article 25 refers to the law of the forum jurisdiction for
a determination of what conduct constitutes wilful mis-
conduct by an air carrier. Moreover, even traditional
interpretive techniques, foreclosed by the clarity of Arti-
cle 25, would not produce a definitive, let alone contrary,
interpretation of Article 25. Thus, the law of the United
States determines what conduct will deprive an air car-
rier of limited liability protection.
(A. lla, 13a; 93 F 3d at 1028-9).
Citing this Court’s recent decision in Zicherman v. Korean
Air Lines Co., __ U.S. ___, 116 $.Ct. 629, 133 L. Ed. 2d 596
(1996), which interpreted Articles 17 and 24 of the Conven-
en ee
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7
tion, the Court of Appeals held that the Warsaw Convention
does not empower federal courts to develop some general fed-
eral common law in derogation of otherwise applicable law
(A. 14a; 93 F.3d at 1029). The Court of Appeals determined
that the Warsaw Convention deferred to United States law,
which in turn would apply the FSIA, which in turn would pass
through to the applicable state law, i.e., the law of the forum.
(A. 15a; 93 F.3d at 1030). The Court of Appeals concluded
that since New York law would control, New York choice of
law rules must also be applied. /d.
The Court of Appeals then reviewed New York’s contract
“grouping of contacts” approach and its “torts interest anal-
ysis” choice of law rules and concluded that South African
substantive law, not New York substantive law, should deter-
mine whether SAA was guilty of wilful misconduct. (A. 16a-
20a; 93 F.3d at 1030-32). Since the District Court had applied
New York substantive law in concluding that Brink’s had not
established SAA’s wilful misconduct, the Court of Appeals
remanded the matter for a determination of liability under
South African law.3 (A. 20a-21a; 93 F.3d at 1032).
ARGUMENT
I. The Decision of the Court of Appeals Below Conflicts
With Both the Language and Intent of the Warsaw
Convention and the Prior Uniform Construction of
“Wilful Misconduct” in Article 25.
In interpreting the Warsaw Convention, a court must be
governed by the text of the Convention where it is clear. Chan
v. Korean Air Lines, 490 U-S. 122, 109 S. Ct. 1676, 1864-5.
104 L. Ed. 2d 113 (1989).
; On other issues, the Court of Appeals affirmed the District
Court’s rulings in SAA’s favor that the air waybill satisfied the require-
ments of Articles 8 and 9 of the Warsaw Convention. (A. 29a; 93 F.3d at
1032-36).
In addition to Article 25, a number of other provisions of
the Warsaw Convention require the court to make determi-
nations in accordance with the provisions of the forum’s own
law. See, e.g., Article 21 (requiring application of the forum’s
“own law” to determine whether plaintiff’s contributory or
comparative negligence exonerates the carrier wholly or
partly from liability); Article 22(1) (allowing periodical pay-
ments of damages “in accordance with the law of the court to
which the case is submitted”); Article 28(2) (procedural
issues “shall be governed by the law of the Court to which the
case is submitted”); Article 29(2) (requiring statute of limi-
tations to be determined under the law of the forum).
Article 25’s use of the phrase “in accordance with the law
of the court to which the case is submitted” is similar to, or in
some instances identical with, the language of Articles 21,
22(1), 28(2) and 29(2). Since the Convention used the phrase
“shall be governed by the law of the court to which the case
is submitted” to ascertain “[q]uestions of procedure” in Arti-
cle 28, or to ascertain “[t]he method of calculating the period
of limitation” in Article 29(2), and used the identical phrase
in Article 25 to determine “wilful misconduct” or its equiv-
alent, the drafters clearly were looking at the lex fori without
reference to conflict rules.
Commentators on the Convention thus have repeatedly
pointed out that in the specific instances when the Convention
specifies that “applicable law of the forum be applied,” the
drafters of the Convention intended that the law must be sub-
stantive law of that court dealing with the case for “[o]ther-
wise, namely if the court were to refer to its conflict rules,
uncertainty of the law would again raise its ugly head and the
very purpose of the convention would be destroyed.”
Mankiewicz, The Liability Regime of the International Car-
rier, § 20, at pp. 15-16 (1981 ed.).
Accord Miller, Liability in International Air Transport, at
p. 169 (1977 ed.):
9
By providing that it is in ‘accordance with the provisions
of its own law’ that the court may exonerate the carrier
wholly or partly from his liability, Article 21 seems to
indicate that the applicable law will be the substantive
lex fori.
This interpretation is consistent with almost all of the
cases applying Article 21. It is the only interpretation
satisfying the purpose of the drafters of the Article, who
were afraid that the Convention might introduce provi-
sions contrary to the tradition of the lex fori. Article 21
was designed to allow the application of these traditions.
Miller also demonstrates that the drafters of the Convention for
Similar reasons insisted that the lex fori—the substantive law
of the forum without application of choice of law conflicts
rules—determine “wilful default” or its equivalent in common
law countries, or “dol” or its equivalent under the French text.
See, Miller, Liability in International Air Transport, supra at
79-80.
Petitioner respectfully asserts that the Court of Appeals
erred when it declared that it had to “pass-through” the War-
saw Convention to United States law, and then pass through
the FSIA to reach application of New York law. (93 F.3d at
1030). A strict reading of Article 25 does not require such a
lengthy journey. Article 25 does not call for wholesale appli-
cation of the law of the forum, but merely borrows and incor-
porates by reference one small! and discrete piece of the
forum’s jurisprudence—its definition of wilful misconduct or
such default as “is considered to be equivalent to willful mis-
conduct”. When that definition is incorporated within Article
25(2), there is no longer any need to “pass through” the Con-
vention to determine the basis for recovery under a different
law because the Convention itself adequately defines the basis
for recovery.
American courts prior to Brink’s have successfully done
this, applying a uniform American law definition of “wilful
misconduct”. As stated by Second Circuit in Jn re Air Dis-
10
aster at Lockerbie, Scotland on December 21, 1988, 37 F.3d
804, 812 (2d Cir. 1994) (Lockerbie II), cert. denied sub nom..,
Pan Am. World Airways v. Pagnucco, 115 S.Ct. 934, 130 L.Ed
2d 880 (1995):
Wilful misconduct under the Convention means that a
carrier must have acted either 1) with knowledge that its
actions would probably result in injury or death, or 2) in
conscious or reckless disregard of the fact that death or
injury would be the probable consequences of its actions.
Accord In re Korean Air Lines, 932 F.2d 1475 (D.C. Cir. 1991),
cert. denied, Dooley v. Korean Air Lines, 502 U.S. 994, 112
S. Ct. 616, 116 L. Ed. 2d 638 (1991).
No court prior to Brink’s ever took into account the forum’s
choice of law rules, or even looked to the substantive law of
the foreign country where the accident occurred, to the law of
the home country of a foreign airline, or to the citizenship of
the injured passengers to define wilful misconduct. Except for
the Brink’s decision, all determinations of “wilful miscon-
duct” or “such default as. . . is considered to be equivalent
to wilful misconduct”, were made only by applying the Amer-
ican definition of “wilful misconduct”, without any consid-
eration of whether conflict of law principles would otherwise
mandate the application of foreign substantive law.
For example, in KLM Royal Dutch Airlines v. Tuller, 292
F.2d 775 (D.C. Cir. 1961), cert. denied, 368 U.S. 921 (1961),
the Court of Appeals affirmed the jury’s finding that an air-
line had engaged in “wilful misconduct” because, among
other reasons, the crew had failed to properly instruct the pas-
sengers of the location of life vests and their use. While the
Court of Appeals noted that regulations of the Irish Govern-
ment did not require an airline to give instructions about the
use and location of life vests unless a flight is more than
30 minutes travel time from land and that the crash occurred
only seconds after the plane left the airport at Shannon, Ire-
land, no consideration was given as to whether or not the
forum’s choice of law principles should be taken into account
in deciding whether KLM was guilty of “wilful misconduct”
which caused the death of a passenger in Ireland.
In other airline crash cases occurring in other countries or
on foreign airlines, American courts uniformly have applied
the American definition of “wilful misconduct”, without anv
consideration as to whether choice of law principles should be
applied. E.g., Air Disaster at Lockerbie Scotland, supra; In re
Korean Air Lines, supra, 932 F.2d at 1479; Ospina v. Trans
World Airlines, 975 F.2d 35 (2d Cir. 1992), cert. denied sub
nom., Estate of Ospina By Coughlin v. Trans World Airlines.
507 U.S. 1051, 113 S.Ct. 1944, 123 L. Ed. 2d 650 (1993);
Pekelis v. Transcontinental & Western Air, 187 F.2d 122 (2d
Cir. 1951), cert. denied, 341 U-S. 951, 71 S. Ct. 1020, 95
L. Ed. 1374 (1951).
Furthermore, in the area of cargo loss, the cases prior to the
Court of Appeals decision in Brink’s made determinations of
“wilful misconduct” under Article 25 by applying the stan-
dard American definition, without consideration of choice of
law issues. See, e.g., Republic Nat. Bank of New York v. East-
ern Airlines, 815 F.2d 232 (2d Cir. 1987) (liability limited to
$634 despite disappearance of $2 million in cash during flight
from Miami to Peru because plaintiff failed to establish “wil-
ful misconduct” under standard American law definition);
Bank of Nova Scotia v. Pan American World Airways 16 Avi.
117,378, (S.D.N.Y. 1981) (American law of wilful miscon-
duct applied with respect to the theft of a shipment of gold
sent by a Canadian bank which disappeared during a flight
from Guatemala to San Salvador): Delgado v. Pan Am. World
Airways, 16 Avi. 918,463 (PR. Sup. Ct. 1982) (applying
American definition of “wilful misconduct” in holding that
recovery for a loss of thirty kilograms of personal belongings
removed from luggage somewhere in flight from Buenos
Aires to Caracas and on to Puerto Rico).
Similarly, Article 21 of the Convention States:
If the carrier proves that the damage was caused or con-
tributed to by the negligence of the injured person the
12
Court may, in accordance with the provisions of its own
law, exonerate the carrier wholly or partly from his lia-
bility.
(emphasis added).
Federal courts have applied the substantive law of the
forum without taking into account choice of law considera-
tions even where the allegedly contributing negligent plain-
tiff was injured abroad. See, e.g., Williams v. Fidelity & Cas.
Co. of New York, 442 F, Supp. 455 (E.D. La., 1977) (Louisi-
ana law of contributory negligence applied where plaintiff
slipped during disembarkation from an airplane in Germany).
Accord Miller, Liability in International Air Transport, supra,
at p.169.
II. The Analysis Adopted by the Court of Appeals Forces
Courts To Speculate Where the Wilful Misconduct
Occurred Before Hearing The Evidence
The analysis set forth by the Court of Appeals presents seri-
ous practical problems. The Court of Appeals acknowledged
that New York choice of law rules governing either tort or
contract claims could be applied in cases involving cargo
losses under the Warsaw Convention. (93 F.3d at 1031). The
Court declined to decide whether to apply tort or contract
rules in this case, finding either analysis would result in
application of South African law. Jd. Under a torts analysis,
however, the Court conceded that “the law of the jurisdiction
where the tort occurred will generally apply because that
jurisdiction has the greatest interest in regulating behavior
within its borders.” Jd. quoting Cooney v. Osgood Machinery,
Inc., 81 N.Y.2d 66, 72, 595 N.Y.S.2d 919, 922, 612 N.E.2d
277, 280 (1993). Using this analysis, the Court found that
under Brink’s “totality of the circumstances” theory of wilful!
misconduct, the majority of the SAA employees’ actions in
question would have occurred in South Africa, and therefore
South African law would apply. (93 F.3d at 1032). The Court
did this despite SAA’s vigorous objection that this was merely
Brink’s allegation, and that there was no proof where and how
this cargo disappeared.
a
13
Because of the very nature of cases involving international
transportation, the cause of the loss is frequently in dispute
and the possible locations of the actions contributing to the
loss tend to range over a number of countries. See, e.g., Air
Disaster at Lockerbie Scotland, supra; Rymanowski v. Pan
Am, supra; Perera Co. v. Varig Brazilian Airlines, 775 F.2d 21
(2d Cir. 1985). Where and how the loss occurred is often the
ultimate issue in the case and can only be determined after all
the evidence has been heard.
The approach imposed by the Court of Appeals, however.
would require a court hearing such a case to play “armchair
detective” and speculate where the activities causing the loss
probably occurred so as to determine which forum’s law to
apply.
Since New York’s JFK airport is the major international air
carrier hub on the eastern seaboard, the erroneous decision of
the Court of Appeals, unless reversed by this Court, will have
a profound impact on all future Warsaw Convention cases.
The precious metal cargo in this case, or lost or stolen cargos
in future cases, could just as easily have been on board an air-
plane which made multiple stops, through several foreign
countries, or could have been transferred from one Carrier to
another carrier en route. As the complexity of intercarrier
transportation around the world increases, so does the guess-
work forced upon the court.
If the court guesses wrong, the result could be the appli-
cation of the law of a forum that has little or no connection
with the claim. This is not a sound and rational basis for car-
rying out the Convention’s instruction for limited application
of the forum jurisdiction’s law because, as discussed below,
it further destabilizes the Convention’s goals of predictabil-
ity and uniformity—goals which the drafters of Article 25
expressed through those other provisions which instruct that
the “applicable law of the forum be applied in order to obtain
predictability and uniformity.”
14
Ill. This Court Has Long Recognized the Convention’s
Objective Of A Uniform Limitation of Liability Rule
For Lost Cargo
This Court addressed the cargo limitation of liability pro-
visions of Article 22 of the Convention in Trans World Air-
lines v. Franklin Mint Corp., 466 U.S. 243, 104 S. Ct. 1776,
80 L.Ed. 2d 273 (1984). That decision considered the impact
of America’s departure in the early 1970 from $35/per ounce
official domestic price of gold established in 1934. Specifi-
cally, this Court overturned a decision of the Second Circuit
which had held that the 1978 repeal of the Par Value Modi-
fication Act rendered the Convention’s cargo liability limit
unenforceable in the United States. In so doing, the Court
pointed out:
The Convention’s first and most obvious purpose was to
set some limit on a carrier’s liability for lost cargo. . . .
The Convention’s second objective was to set a stable,
predictable, and internationally uniform limit that would
encourage the growth of a fledgling industry.
466 U.S. at 256, 104 S. Ct. at 1784. (emphasis added).
The Convention’s objective “to set a stable, predictable,
and internationally uniform limit” will be destroyed if the
fifty states’ choice of law rules were to be engrafted upon
Article 25’s simple instruction to use the definition of wilful
misconduct used by the forum jurisdiction. Indeed, since
many states have changed their conflicts of law rules during
the nearly 70 years since the Convention was adopted,‘ the
. In New York State alone, the choice of law rules applicable to
tort matters have changed from the rule that substantive rights and lia-
bilities are determinable by the law of the place of the tort (Poplar v.
Bourjois, Inc., 298 N.Y. 62, 66, 80 N.E.2d 334, 335-6 (1948)) to a
“grouping of contacts” test (Babcock v. Jackson, 12 N.Y.2d 473, 481, 240
N.Y.S.2d 743, 749, 191 N.E.2d 279, 283-84 (1963)) to New York’s cur-
rent “interests” analysis—which State has the greater interest in having
its law applied. (/stim, Inc. v. Chemical Bank, 78 N.Y.2d 342, 575
N.Y.S.2d 796, 581 N.E.2d 1042 (1991)).
15
Brink’s decision has the effect of rewriting the Convention.
See, Rocca v. Thompson, 223 U.S. 317. 331-332, 32 S. Ct.
207, 210-211, 56 L.Ed. 453 (1912) (“treaties . . . are to be
read in the light of the conditions and circumstances existing
at the time. They were entered into, with a view to effecting
the objects and purposes of the States thereby contracting.”).
Instead of “the stable, predictable, and internationally uni-
form limit” which, as this Court observed in Franklin Mint,
the drafters of the Convention mandated, the Second Court’s
opinion here would replace stability, predictability and uni-
formity with the differing conflict of law rules of fifty
forums.
IV. The Second Circuit Misapplied This Court’s Decision
in Zicherman v. Korean Air Lines Co.
In its recent Zicherman decision, supra, this Court held that
since Articles 17 and 24 of the Convention did not specify the
type of damages that may be recoverable upon the death of
passengers in an airplane that crashes on the high seas, that
issue should be resolved by the law of the United States and
specifically by the provisions of Death on the High Seas Act
(“DOHSA” ), 46 U.S.C. A §8§ 761 et seq... U.S. __,, 116
S. Ct. at 637, 133 L. Ed. 2d at 609. In reaching that conclu-
sion, this Court noted that “both parties agree that if the issue
of compensable harm is (as we have determined) unresolved
by the Convention itself, it is governed in the present case by
the law of the United States.” 116 S. Ct. at 635, 133 L. Ed. 2d
at 607. The Court then ruled that plaintiffs could not recover
for loss of society damages when a crash occurs at sea
because such damages are not recoverable under DOHSA. 116
S. Ct. at 636, 133 L. Ed. 2d at 608.
This Court also noted that the Convention did not resolve
the questions of who may recover and what compensatory
damages they may recover—issues that were left open to “pri-
vate international law;” it also agreed with all of the expert
commentators that “compensable harm is to be determined by
domestic law.” 116 S. Ct. at 635, 116 L. Ed. 2d at 607. What
16
this Court specifically did not do is engage in a choice of law
inquiry to determine whether the crash of a Korean airliner in
the seas near Korea during a flight to Seoul should be gov-
erned by anything except American law. While rejecting the
Second Circuit's position that the courts should craft a federal
common law rule of damages applicable to all suits brought
under the Convention, it concluded that since the plane had
crashed at sea, the damage issues were governed by the fed-
eral DOHSA statute. 116 S. Ct. at 636, 116 L. Ed. 2d at 607-
608.
In Zicherman, this Court was forced to defer to a body of
law totally outside the Warsaw Convention because the Con-
vention was clearly silent on a particular issue concerning
measure of damages. The same analysis cannot be applied to
the instant case in which Article 25 both addresses and
resolves the burden of proof a plaintiff bears to obtain dam-
ages in excess of the limits set forth in Article 22(2). Article
25 merely incorporates by reference the definition of “wilful
misconduct” or “such default as . . . is considered to be
equivalent to wilful misconduct” used by the forum juris-
diction; it is not a “gap” in the Convention requiring appli-
cation of a different body of law, as was the situation in
Zicherman. The Court of Appeal’s wholesale deferral to New
York law, including its conflicts of law rules, to determine lia-
bility was therefore unnecessary and in derogation of the
plain language of the Convention.
The Court of Appeal’s decision in Brink’s turns Zicherman
and all prior American case law on its head by concluding
that determination of wilful misconduct “in accordance with
the law of the court to which the case is submitted” should
not be made in accordance with American or other domestic
laws, but instead should be determined in accordance with
the law of South Africa. (A. 18a-20a, 93 F.3d at 1031-32)
However, the Court of Appeals acknowledged early in its
opinion that “the law of the United States determines what
conduct will deprive an air carrier of limited liability pro-
tection.” (A. 13a; 93 F.3d at 1029.) The analysis applied by
17
the Court of Appeals in this case may only make sense in sit-
uations where it is unclear which state’s law should act as the
stand-in for United States law; using the analysis to reach the
conclusion that the law of a foreign country effectively
becomes the law of the United States is on its face an inap-
propriate result, and further points to the logical flaws of the
interpretation of Article 25 endorsed by the Court of Appeals.
CONCLUSION
For the foregoing reasons, South African Airways respect-
fully requests that this Court issue a writ of certiorari to
review the decision of the United States Court of Appeals for
the Second Circuit.
Dated: New York, New York
December 17, 1996
FRANKLIN F. BASS
Counsel of Record
JOSEPH ZUCKERMAN
MICHAEL I. VERDE
ROSENMAN & COLIN LLP
575 Madison Avenue
New York, New York
(212) 940-8800
Attorneys for Petitioner
South African Airways
APPENDIX
|
la
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
No. 1172—August Term, 1995
(Argued May 15, 1996 Decided August 8, 1996)
Docket No. 95-7872
BRINK’S LIMITED,
Plaintiff-Appellan:,
eV oe
SOUTH AFRICAN AIRWAYS,
Defendant-Appellee.
Before:
LUMBARD, MESKILL and MINER,
Circuit Judges.
Plaintiff-appellant Brink’s Limited appeals from a
judgment of the United States District Court for the
Southern District of New York, Baer, J., granting defen-
dant-appellee South African Airways’ motion for partial
a a
2a
summary judgment and entering judgment against South
African Airways in the amount of $1,522. We conclude
that the district court erred in applying New York law
under Article 25 of the Convention for Unification of
Certain Rules Relating to International Transportation by
Air, Oct. 12, 1929, 49 Stat. 3000, T.S. 876 (1934),
reprinted in note following 49 U.S.C.A. § 1502 (the
“Warsaw Convention”). We also conclude that the dis-
trict court erred in its application of Articles 8 and 9 of
the Warsaw Convention, but nevertheless reached the
proper conclusion as to liability under those articles.
Therefore, the judgment of the district court is affirmed
in part, reversed in part, and remanded for further pro-
ceedings consistent with this opinion.
CRAIG S. ENGLISH, New York City (Thomas
C. Murphy, Kennedy Lillis Schmidt &
English, New York City, of counsel), for
Appellant.
MICHAEL I. VERDE, New York City
(Franklin F. Bass, Kathleen E. Schaaf,
Rosenman & Colin, New York City, of
counsel), for Appellees.
Stephen J. Fearon, Michael J. Holland,
Katherine B. Posner, Robert J. Saville,
Condon & Forsyth, New York City, for
Amicus Curiae Qantas Airways Limited
and Finnair OY.
3a
MESKILL, Circuit Judge:
Plaintiff-appellant Brink’s Limited (Brink’s) appeals
from a decision of the United States District Court for
the Southern District of New York, Baer, J.. granting
defendant-appellee South African Airways’ motion for
partial summary judgment and entering judgment against
South African Airways (SAA) in the amount of $1,522.
We conclude that the district court erred in applying
New York law under Article 25 of the Convention for
Unification of Certain Rules Relating to International
Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T.S.
876 (1934), reprinted in note following 49 U.S.C.A.
§ 1502 (the “Warsaw Convention” or the “Convention”).
We also conclude that the district court erred in its appli-
cation of Articles 8 and 9 of the Warsaw Convention, but
nevertheless reached the proper conclusion as to liabil-
ity under those articles. Therefore, the judgment of the
district court is affirmed in part, reversed in part, and
remanded for further proceedings consistent with this
opinion.
BACKGROUND
Extensive discovery produced the following back-
ground information. Defendant-appellee SAA is a divi-
sion of Transnet Limited, which is wholly owned by the
government of the Republic of South Africa. Rustenberg
Platinum Mines Limited (Rustenberg) contracted for
SAA to transport certain precious metals by air from
Johannesburg to New York under an air waybill' dated
An air waybill is a written document describing the shipping arrange-
ment between the air carrier and the shipper. It includes, inter alia, the
point of origin and destination and a description of the goods included
in the shipment. See Warsaw Convention, Arts. 5-16; see also Black’s
Law Dictionary 1593 (6th ed. 1990).
4a
September 10, 1992. Rustenberg also contracted for
plaintiff-appellant Brink’s to provide security for the
shipment and to indemnify Rustenberg for any losses.
As consignee under the SAA-Rustenberg air waybill.
Brink’s commenced this action against SAA, contending
that six boxes of the shipment were stolen while in the
custody of SAA.?
On September 10, 1992, Rustenberg loaded an
armored car with the shipment of precious metals bound
for New York, London and another refinery within South
Africa. At approximately 1:10 p.m., the armored car
arrived at the high value cargo vault located within the
SAA cargo facility at Jan Smuts Airport in Johannes-
burg. There, an SAA employee unloaded the shipment
under the watch of the armored car driver and the South
African Police (SAP), which acted as security for SAA.
Thirty-four boxes were counted by the courier for the
shipment (General Malan), the SAP officer assigned to
the vault (Sergeant Engelbrecht), the vault foreman,
another SAP officer and an employee of the freight for-
warding company. Thereafter, the boxes were marked
with air waybill labels and placed in an all-metal con-
tainer, designated AVE 1617, bound for New York.
After padlocks were affixed to the container, Sergeant
Engelbrecht, who had previously complained to SAA
regarding poor locking mechanisms on the containers
used for high value shipments, noticed that despite the
padlock, the door to AVE 1617 still could be opened. He
informed General Malan of the problem and requested
the vault foreman to provide a container that could be
locked. The vault foreman advised him that no other
2 Article 13(3) authorizes the consignee “to put into force against the
carrier the rights which flow from the contract of transportation.” War-
saw Convention, Art. 13(3).
Sa
containers were available. Thereafter, SAP and SAA per-
sonnel closed and locked the high value cargo vault.
At approximately 6:15 that evening, SAA personnel
opened the vault, removed container AVE 1617, loaded
it on a dolly and transported it from the cargo facility to
SAA Flight 201, destined for New York. An armed SAP
escort, including General Malan, accompanied the con-
tainer. After arrival at the aircraft, General Malan.
allegedly in contravention of SAA procedures, returned
to the passenger lounge. After General Malan’s depar-
ture, only one security officer, Constable Ramoroka,
remained planeside to guard the shipment.
Constable Ramoroka had been guarding a gate at the
airport when he was directed to act as the armed guard at
the aircraft. He had never guarded a high value shipment
on the ramp or at planeside, and was not at all familiar
with the contents or appearance of this shipment.
SAA cargo loaders Jose Rheeder and Richard Capkey
loaded the shipment on board. Except for a two-to-three
minute interval, SAA loadmaster Scholtz Potgeiter
Supervised the loading process. After container AVE
1617 was loaded into the hold, Constable Ramoroka
positioned himself under the wing of the aircraft where
he allegedly could not see the stowage location of the
container. It took 20 to 60 minutes to load the remaining
cargo into the hold. Then container AVE 1617 was
“buried” in the hold.
The aircraft departed Jan Smuts Airport at 8:08 p.m. It
Stopped for a regularly scheduled refueling at Ilha Do
Sal in the Cape Verde Islands. Although Cargo was
3 Although the air waybill did not identify Ilha Do Sal specifically in
the “Routing and destination” space, the reverse side of the air waybill
provided, in part:
(footnote continued)
6a
removed from the front holds in Ilha Do Sal, no cargo
was removed from the hold containing AVE 1617.
Except for a two-to-three minute period, General Malan
continuously observed the hatch to that hold and verified
that it was not opened.
The aircraft arrived at John F. Kennedy International
Airport at approximately 6:30 the following morning.
SAA security personnel met the aircraft, obtained the
padlock keys from General Malan, and proceeded ramp-
side, where the hold containing AVE 1617 had been
opened but not off-loaded. The SAA personnel observed
the off-loading of AVE 1617 and confirmed that the
locks and seals were intact. Both the SAA personnel and
Port Authority police escorted the container to a cargo
facility, where Brink’s personnel opened the container
and immediately determined that six boxes of the pre-
cious metals, worth $1,789,012.67, were missing from
the shipment.
The Port Authority police, SAA and the Gold and Dia-
mond Branch of the SAP have investigated the disap-
pearance of the five boxes. Despite an apparently
thorough investigation, there have been no arrests or
convictions and the boxes have not been recovered.
Although SAP bulletins posted an award to refiners han-
dling similar materials, no sale or attempted sale was
ever reported. Under its agreement with Rustenberg,
Brink’s indemnified Rustenberg for the entire loss.
The agreed stopping places (which may be altered by Carrier in case
of necessity) are those places, except the place of departure and the
place of destination, set forth on the face hereof or shown in Carrier’s
timetables as scheduled stopping places for the route.
Brink’s concedes that the pertinent SAA timetable lists a stopover in the
Cape Verde Islands.
Ta
In the proceedings below, Brink’s sought to impose
liability for the entire loss on SAA. SAA admitted only
limited liability, and moved for partial summary judg-
ment to the extent that Brink’s sought damages above
the liability limitation imposed by Article 22(2) of the
Warsaw Convention. The district court granted partial
summary judgment to SAA and entered a final judgment
against SAA for $1,522, the limited liability amount.
This appeal followed.
DISCUSSION
This case is governed by the Warsaw Convention and
the Foreign Sovereign Immunities Act of 1976, 28
U.S.C. §§ 1602-1611 (FSIA).4 The Warsaw Convention
provides the cause of action, see Warsaw Convention,
Arts. 13(3) & 18, but the FSIA provides the sole basis of
federal court jurisdiction, Argentine Republic v. Amer-
ada Hess Shipping Corp., 488 U.S. 428, 443 (1989). We
apply the Warsaw Convention and the FSIA concur-
rently. Harris v. Polskie Linie Lotnicze, 820 F.2d 1000,
1002 (9th Cir. 1987). We have appellate jurisdiction
under 28 U.S.C. § 1291.
Brink’s contends that SAA is liable for the full value
of the missing cargo under three theories of liability.
First, Brink’s contends that the wilful misconduct of
SAA employees, in stealing the boxes, deprives SAA of
limited liability under Article 25 of the Convention.
‘ The FSIA confers jurisdiction over foreign states. See 28 U.S.C.
§ 1330 (granting jurisdiction over certain claims against foreign states).
Because SAA is an instrumentality of the government of South Africa,
or a separate legal entity owned by the Republic of South Africa and
not a citizen of the United States, SAA is a foreign state within the
meaning of the FSIA. 28 U.S.C. § 1603(b). The FSIA therefore applies
to this dispute.
8a
Second, Brink’s contends that even absent theft, the con-
duct of SAA employees constitutes wilful misconduct
under the totality of the circumstances and deprives SAA
of limited liability under Article 25 of the Convention.
Third, Brink’s contends that SAA’s failure to comply
with the requirements of Article 8 of the Convention
regarding air waybills also deprives SAA of limited lia-
bility under Article 9 of the Convention.
SAA’s response is threefold. First, SAA contends that
the evidence is insufficient to support the allegation of
theft by SAA employees and that even if theft could be
proven, employee theft is not wilful misconduct within
the meaning of Article 25. Second, SAA contends that
Brink’s’ “totality of the circumstances” claim is not suf-
ficient to create an inference of wilful misconduct.
Finally, SAA contends that its incorporation of certain
information by reference to documents outside the air
waybill satisfied the requirements of Article 8 of the
Convention.
Our interpretation of the Warsaw Convention must
begin “with the literal language.” Buonocore v. Trans
World Airlines, 900 F.2d 8, 9 (2d Cir. 1990). If the lan-
guage is “reasonably susceptible of only one interpre-
tation,” our task of interpretation ends there. /d. at 9-10;
see also Victoria Sales Corp. v. Emery Air Freight, 917
F.2d 705, 707 (2d Cir. 1990) (stating that “when the text
of a treaty is clear, a court shall not, through interpre-
tation, alter or amend the treaty” (citing Chan v. Korean
Air Lines, Ltd., 490 U.S. 122, 134 (1989))). We may
apply secondary tools of interpretation only when the
treaty text is ambiguous. Chan, 490 U.S. at 134.
er. a ee eee Pn Pee
9a
I. Wilful Misconduct
This appeal requires us to determine whether Article
2. of the Warsaw Convention—which deprives a carrier
of limited liability for damage caused by its “dol,” as the
original French text provides, or by its “wilful miscon-
duct,” as the English translation provides—embraces an
international standard of conduct or defers to the law of
the forum jurisdiction for its definition of wilful mis-
conduct. If Article 25 defers to the law of the forum
jurisdiction, in this case the United States, we must
determine whether a federal statute, federal common law
Or state law governs this controversy. We then must
apply the appropriate choice of law rules and determine
what law, in fact, defines the content of wilful miscon-
duct.
A. The “law of the court to which the case is
submitted”
Article 18 of the Warsaw Convention presumes an air
carrier liable for loss or damage to goods in transit, but
Article 22(2) limits that liability to 250 francs per kilo-
gram, or approximately $9.07 per pound. Warsaw Con-
vention, Arts. 18, 22(2). However, under Article 25(1)
and (2), the Convention eliminates the limitation of lia-
bility where the wilful misconduct of the carrier causes
the loss or damage. /d., Art. 25(1) & (2). Under that
Article, a complaining party must prove both wilful mis-
conduct and proximate cause in order to avoid the gen-
eral rule of limited liability.
Specifically, Article 25, as translated, states:
(1) The carrier shall not be entitled to avail him-
self of the provisions of this convention which
exclude or limit his liability, if the damage is caused
10a
by his wilful misconduct or by such default on his
part as, in accordance with the law of the court to
which the case is submitted, is considered to be
equivalent to wilful misconduct.
(2) Similarly the carrier shall not be entitled to
avail himself of the said provisions, if the damage is
caused under the same circumstances by any agent
of the carrier acting within the scope of his employ-
ment.
Id., Art. 25(1) & (2) (emphases added). Thus, Article
25(2) makes it clear that an air carrier is liable for the
wilful misconduct of its employees acting within the
scope of their employment. More pertinently, Article
25(1) makes it clear that wilful misconduct must be
defined “in accordance with the law of the court to
which the case is submitted.” Jd., Art. 25(1).
The language of Article 25(1), adopted in subsection
(2) by use of the word “similarly,” is clear. The only
reasonable interpretation of the reference to “the law of
the court to which the case is submitted” is as a refer-
ence to the law of the forum jurisdiction. More impor-
tantly, the only reasonable construction of Article 25’s
reference to the law of the forum jurisdiction is defer-
ence to that law for the purposes of defining “dol” or
“wilful misconduct.” In other words, Article 25 unam-
biguously deprives an air carrier of limited liability for
damage caused by its “dol,” or that which is “considered
to be equivalent” to “dol,” interpreted as “wilful mis-
conduct,” under the law of the forum jurisdiction. /d.,
Art. 25(1).
Because we conclude that the language of Article
25(1) clearly calls for the application of the law of the
forum jurisdiction, we must reject the “international”
lla
interpretation of Article 25 advanced by Brink’s. In
other words, because Article 25(1) unambiguously
defers to the law of the forum jurisdiction for the content
of “wilful misconduct,” we must reject any notion that
this language is merely a reference to local terminology
or, as Brink’s describes it, a vehicle for translating the
difficult civil concept of “dol.”
Although we recognize that the term “dol,” or “wilful
misconduct,” as we have translated it, is a civil law con-
cept, and one that is not readily capable of translation,
the conflict over the content of “wilful misconduct”
arises out of conflicting policies, not difficulty of trans-
lation. Compare Rustenberg Platinum Mines, Ltd. v.
South African Airways, [1979] 1 Lloyd’s Rep. 19, 23
(Eng. C.A.) (concluding that an employee who commits
theft while carrying out functions entrusted to him is act-
ing within the scope of his employment), with
Rymanowski v. Pan Am. World Airways, 70 A.D.2d 738,
739, 416 N.Y.S.2d 1018, 1020 (3d Dep’t 1979) (con-
cluding that an employee who commits theft is not act-
ing within the scope of his employment because acts
such as theft are not committed in furtherance of the
employee’s duties), aff’d, 49 N.Y.2d 834, 427 N.Y.S.2d
795, 404 N.E.2d 1336 (1980). In other words, we believe
that the drafters of the Convention recognized the
possibility of conflicting national policies with respect
to imputing liability to a carrier, but unmistakably
resolved any conflict by deferring to the law of the
forum jurisdiction.
Even were we to ignore the plain language of Article
25 and conclude that the difficulty of interpreting the
term “dol” alone justified resort to interpretive tech-
niques, traditional interpretive techniques do not support
the concept of an international standard advanced by
12a
Brink’s. First, the participants at the Warsaw Convention
were not ignorant of the widely divergent laws govern-
ing liability for the acts of servants. As one scholar
relied upon by Brink’s noted, the participants to the Con-
vention appreciated the difficulty of determining what
acts should be imputed to a carrier but did not draw any
lines. H. Drion, Limitation of Liabilities in International
Air Law 9f 205-206, at 248 (1954).
Second, the minutes of the Warsaw Convention offer
“little guidance” on the ultimate question presented
here—the liability of an employer for the acts of an
employee. /d. 4 206. Third, the international authorities
cited by Brink’s similarly offer little guidance to Amer-
ican courts. Although these authorities universally con-
clude that theft by an employee must be imputed to the
employer for purposes of liability, they do not address
the question of which body of law governs under Article
25, presumably because no real conflict arose in those
cases. See, e.g., Rustenberg Platinum Mines, Ltd. v.
South African Airways, [1979] 1 Lloyd’s Rep. 19, 23
(Eng. C.A.) (concluding that English courts share view
generally accepted in other countries that a master is
liable for the acts committed by a servant in the course
of carrying out the duties entrusted to him). Finally,
although the participants to the Warsaw Convention
desired uniformity, and although the opinions of sister
Signatories are entitled to considerable weight, Air
France v. Saks, 470 U.S. 392, 404 (1985) (quoting Ben-
jamins v. British European Airways, 572 F.2d 913, 919
(2d Cir. 1978), cert. denied, 439 U.S. 1114 (1979)), the
participants in the Convention recognized that unifor-
mity was not always possible, and thus, envisioned
application of local law to certain questions. See Zicher-
man Vv. Korean Air Lines Co., Ltd., 116 §.Ct. 629, 635
ee ee
13a
(1996) (noting incontrovertible application of national
law to certain issues and infeasibility of uniformity
under Article 24).
In short, the literal language of Article 25 refers to the
law of the forum jurisdiction for a determination of what
conduct constitutes wilful misconduct by an air carrier.
Moreover, even traditional interpretive techniques, fore-
closed by the clarity of Article 25, would not produce a
definitive, let alone contrary, interpretation of Article
25. Thus, the law of the United States determines what
conduct will deprive an air carrier of limited liability
protection.
B. United States Law for Purposes of Article 25
The next question we must answer is what is the law
of the United States for purposes of Article 25. The
United States Congress has not enacted any legislation
addressing the precise issue here. Thus, the question
becomes whether the courts of the United States should
develop and apply federal common law or whether state
law provides a governing rule. In making this determi-
nation, we are mindful that the Supreme Court recently
admonished lower courts to refrain from developing fed-
eral common law “under cover” of advancing the goal of
uniformity in Warsaw Convention cases. See Zicherman,
116 S.Ct. at 636.
In Zicherman, the Supreme Court interpreted Article
24 of the Convention as leaving the question of available
remedies unresolved. Jd. at 635. The Court held that
Article 24 defers to private international law for reso-
lution of those questions. Jd. More specifically, the
Court characterized Article 24 as a “pass-through,”
directing courts to apply the law that would govern in
the absence of the Warsaw Convention. Jd. at 636. In
l4a
Zicherman, a federal statute (the Death on the High Seas
Act) supplied the rule of law. Jd. at 636.
More pertinently, the Zicherman Court reversed this
Court’s holding that federal common law, specifically
general maritime law, governed such causes of action.
Id. at 636 (rev’g Zicherman v. Korean Air Lines Co.,
Ltd., 43 F.3d 18, 21 (2d Cir. 1994) (following In re Air
Disaster at Lockerbie, Scotland on Dec. 21, 1988, 928
F.2d 1267 (2d Cir.), cert. denied, 502 U.S. 920 (1991), &
In re Air Disaster at Lockerbie Scotland on Dec. 21,
1988, 37 F.3d 804 (2d Cir. 1994), cert. denied, 115 S.Ct.
934 (1995))). The Court cautioned that, notwithstanding
any desire for uniformity, the Warsaw Convention does
not empower United States federal courts “to develop
some common-law rule—under cover of general admi-
ralty law or otherwise—that will supersede the normal]
federal disposition.” Zicherman, 116 S.Ct. at 636.
Thus, the Warsaw Convention does not authorize
creation of an international or federal common law “in
derogation of otherwise applicable law.” Jd. Rather,
where the drafters declined to enact a substantive rule of
law within the Convention, the Convention merely acts
as a “pass-through,” directing courts to apply the law
that would govern in the absence of the Warsaw Con-
vention. Jd. Accordingly, we refrain from fashioning a
federal common law rule in this case.
In the ordinary diversity case, federal courts would
apply the law of the forum in which the court is located.
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). In
this case, however, the FSIA provides the sole basis of
federal court jurisdiction. Argentine Republic, 488 U.S.
at 443. Nevertheless, state law generally controls in
FSIA cases as well. Barkanic v. General Admin. of Civil
1Sa
Aviation of the People’s Republic of China, 923 F.2d
957, 959 (2d Cir. 1991). More specifically, “where state
law provides a rule of liability governing private indi-
viduals, the FSIA requires the application of that rule to
foreign states in like circumstances.” First Nat'l City
Bank v. Banco Para El Comercio Exterior De Cuba, 462
U.S. 611, 622 n.11 (1983).
Here, an international treaty governs liability between
the parties to this lawsuit. However, that treaty defers to
the law of the United States. Thus, we “pass-through”
the Warsaw Convention to United States law and, under
the FSIA, to state law for the rule of liability governing
this dispute. See Zicherman, 116 S.Ct. at 636 (suggest-
ing that where Warsaw Convention does not supply a
rule of law, the Warsaw Convention acts as a “pass-
through” to otherwise applicable law); First Nat’l City
Bank, 462 U.S. at 622 n.11 (concluding that the FSIA
requires application of state law if state law provides a
rule of liability).
In short, Article 25 of the Warsaw Convention defers
to the law of the forum jurisdiction for a determination
of what conduct constitutes “wilful misconduct” by an
air carrier. When a Warsaw Convention action is filed in
a United States district court and no federal statute gov-
erns, the law of the United States for purposes of Article
25 is the law of the state in which the district court sits.
In applying the law of the forum jurisdiction, federal
courts must also apply that state’s choice of law rules.
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496
(1941) (involving diversity case); see also Zicherman,
116 S.Ct. at 635 (noting that, in determining which
sovereign’'s law applies, “[c]hoice of law is, of course,
determined by the forum jurisdiction”); Barkanic, 923
l6a
F.2d at 961 (holding that the FSIA incorporates state
choice of law rules). But see Bickel v. Korean Air Lines
Co., Ltd., 83 F.3d 127, 130-31 (6th Cir. 1996) (devel-
oping and applying a federal choice of law rule to Arti-
cle 24 of the Warsaw Convention). Because this action
was instituted in the United States District Court for the
Southern District of New York, New York law, including
New York choice of law rules, controls.
C. Choice of Law
The next question for us is what law New York state
courts would apply to the issue in dispute. We need not
determine which particular New York choice of law rule,
tort or contract, applies in this context because we con-
clude that New York state courts would apply South
African law under either choice of law analysis.
Until the latter part of this century, New York courts
employed a “traditional, ‘territorially oriented’ approach
to choice-of-law issues which applied the law of the geo-
graphical place where one key event occurred, such as
the place of the wrong in tort cases or where an agree-
ment was entered into or performed in contract cases.”
Istim, Inc. v. Chemical Bank, 78 N.Y.2d 342, 347, 575
N.Y.S.2d 796, 798, 581 N.E.2d 1042, 1044 (1991). More
recently, however, New York courts, recognizing that
“{a] State may lack sufficient nexus with a case so that
choice of its law is arbitrary or fundamentally unfair,”
abandoned these rigid rules in favor of a more flexible
approach. Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66,
70-71, 595 N.Y.S.2d 919, 921, 612 N.E.2d 277, 279
(1993). Under this more flexible approach, New York
courts seek to apply the law of the jurisdiction with the
most significant interest in, or relationship to, the dis-
et i ee al Nhs
I cr NM inc Maa le aE ll I Ra AM Me
MOI I. ne Oa alt Rae Ae Pei
17a
pute. Babcock v. Jackson, 12 N.Y.2d 473, 481-82, 240
N.Y.S.2d 743, 749, 191 N.E.2d 279, 283-84 (1963).
In contract cases, New York courts now apply a “cen-
ter of gravity” or “grouping of contacts” approach. Jd.
Under this approach, courts may consider a spectrum of
significant contacts, including the place of contracting,
the places of negotiation and performance, the location
of the subject matter, and the domicile or place of busi-
ness of the contracting parties. Jn re Allstate Ins. Co. and
Stolarz, 81 N.Y.2d 219, 227, 597 N.Y.S.2d 904. 908, 613
N.E.2d 936, 940 (1993). New York courts may also con-
Sider public policy “where the policies underlying con-
flicting laws in a contract dispute are readily identifiable
and reflect strong governmental interests.” Jd. at 226,
579 N.Y.S.2d at 907, 613 N.E.2d at 939. The traditional
choice of law factors, the places of contracting and
performance, are given the heaviest weight in this anal-
ysis. Id.
In tort cases, New York courts apply an “interests”
analysis. Istim, Inc., 78 N.Y.2d at 347-48, 575 N.Y.S.2d
at 798, 581 N.E.2d at 1044. Courts must examine the
purposes and policies of the conflicting laws in the con-
text of the facts of the case. “If conflicting conduct-reg-
ulating laws are at issue, the law of the jurisdiction
where the tort occurred will generally apply because that
jurisdiction has the greatest interest in regulating behav-
ior within its borders.” Cooney, 81 N.Y.2d at 72, 595
N.Y.S.2d at 922, 612 N.E.2d at 280. If post-event reme-
dial rules, or loss-allocating rules, are at issue. “other
factors are taken into consideration, chiefly the parties’
domiciles.” Jd. In short, “interests analysis” determines
“which State has the greater interest in having its law
applied.” Istim, Inc., 78 N.Y.2d at 348, 575 N.Y.S.2d at
798, 581 N.E.2d at 1044.
18a
When choice of law analysis calls for application of
foreign law which would “ ‘violate some fundamental
principle of justice, some prevalent conception of good
morals, some deep-rooted tradition of the common weal’
. . , the court may refuse to enforce it.” Cooney, 81
N. Y.2d at 78, 595 N.Y.S.2d at 926, 612 N.E.2d at 284
(quoting Loucks v. Standard Oil Co., 224 N.Y. 99, 111,
120 N.E. 198, 202 (1918)). However, not all New York
Statutes or cases express fundamental public policy. Jd.
at 79, 595 N.Y.S.2d at 926, 612 N.E.2d at 284. “[RJesort
to the public policy exception should be reserved for
those foreign laws that are truly obnoxious.” Jd. at 79,
595 N.Y.S.2d at 927, 612 N.E.2d at 285. More perti-
nently, this exception applies “only when New York’s
nexus with the case is substantial enough [that apply-
ing the foreign law would] threaten [New York] public
policy.” Id. at 78, 595 N.Y.S.2d at 926, 612 N.E.2d
at 284.
This case, essentially an action for indemnification,
arises from a contract for carriage of goods between a
shipper and an air carrier. The Warsaw Convention, an
international treaty governing the liability of air carriers,
provides the cause of action. That treaty deprives an air
carrier of its limited liability protection for damage
caused by the wilful misconduct of its employees. How-
ever, that treaty refers to the law of the forum jurisdic-
tion for a determination of whether theft by an employee
acting within the scope of employment constitutes wil-
ful misconduct by the air carrier.
We need not decide whether this context requires
application of contract choice of law principles or tort
choice of law principles, or, assuming the latter, whether
the applicable law is one of conduct regulation or loss
allocation. Under any analysis, the Republic of South
——
f
ae oS <
ee
19a
Africa clearly is the center of gravity of this dispute, All-
state Ins., 81 N.Y.2d at 227, 597 N.Y.S.2d at 908, 613
N.E.2d at 940, and has the greatest interest in having its
law applied to this controversy, Istim, Inc., 78 N.Y.2d at
348, 575 N.Y.S.2d at 798, 581 N.E.2d at 1044.
Brink’s, the plaintiff and the intended consignee under
the contract of carriage, is a British company with a
satellite office in New Canaan, Connecticut. SAA is
a South African corporation with a local New York
office. SAA, as noted, is also an instrumentality of the
South African government. South Africa was the place
of contracting* and the primary place of performance.*®
Thus, while the Republic of South Africa is closely asso-
ciated to the contract of carriage, New York is not
associated with that contract at all.
With respect to Brink’s’ claim of theft, Brink’s’ theory
is that SAA employees stole the goods in South Africa.
With respect to Brink’s’ claim that the wilful misconduct
of SAA’s employees, under the totality of the circum-
stances, caused the loss to occur, all of the actions which
form the basis of this claim likely occurred in South
Africa. In other words, if any misconduct occurred at all,
it likely occurred in South Africa. The Republic of South
Africa certainly has a greater interest than New York in
5 Brink's seeks to recover as the consignee of the goods which were the
subject of the contract of carriage between SAA and Rustenberg, another
South African concern. In the absence of any contrary indication, we
presume that these two South African concerns formed their contract in
South Africa.
© SAA was responsible for transporting the Rustenberg precious met-
ais from Jan Smuts Airport to John F. Kennedy International Airport
without loss or damage. The bulk of SAA’s work with respect to the
Rustenberg cargo was guarding the cargo before loading, during loading,
and after loading until take-off
a Se
20a
the alleged wilful misconduct or gross negligence of
SAA, an instrumentality of its government, and the SAP.
SAA is the only party on this record with any rela-
tionship to New York, and that is only through a local
SAA office. The discovery at Kennedy Airport, that sev-
eral boxes of cargo were missing, is the only contact
New York has had with this dispute, and that contact is
of limited significance. Thus, New York’s nexus with
this case is not substantial.
In short, all significant relationships and events point
toward South Africa as the sovereign with the greatest
interest in having its law applied to this controversy.
South African law governing employer-employee lia-
bility may be in conflict with New York law. However,
New York’s nexus with this case is not so substantial
that application of South African law would threaten
public policy as expressed in New York’s common law
master-servant rule. Moreover, holding SAA liable for
employee theft would not be so “obnoxious” to New
York public policy. Cooney, 81 N.Y.2d at 79, 595
N.Y.S.2d at 927, 612 N.E.2d at 285. Thus, New York
choice of law doctrine requires application of South
African law to this controversy.
D. Remand
In accordance with the foregoing, we conclude that
Article 25 of the Warsaw Convention defers to the law
of the forum jurisdiction for a determination of what
conduct constitutes wilful misconduct by an air carrier.
In the United States federal courts, that law is the sub-
stantive law of the forum jurisdiction, including the
forum’s choice of law rules. In this case, New York
choice of law rules require application of South African
law.
2la
Thus, to the extent that the district court relied on
New York master-servant law in granting SAA partial
summary judgment, we reverse the judgment of the dis-
trict court and remand the cause for a determination of
liability under South African law. If theft by an
employee acting in the course of employment constitutes
wilful misconduct by an employer-air carrier under
South African law, the district court must determine, in
accordance with SAA’s motion, whether Brink’s has set
forth sufficient evidence of theft to defeat the motion for
summary judgment. Similarly, the district court must
determine whether, under South African law, Brink’s has
set forth a colorable claim that the conduct of SAA
employees, under the totality of the circumstances, con-
stituted wilful misconduct by SAA. Accordingly, the
judgment of the district court is reversed and the cause
remanded for further proceedings consistent with this
opinion.
II. The Air Waybill
The final issue we must decide is whether incorpora-
tion by reference satisfies the requirement of Articles 87
Article 8 provides, in pertinent part:
The air waybill shall contain the following particulars:
(c) The agreed stopping places, provided that the carrier may
reserve the right to alter the stopping places in case of necessity, and
that if he exercises that right the alteration shall not have the effect
of depriving the transportation of its international character;
(¢) The name and address of the first carrier;
(h) The number of packages, the method of packing, and the par-
ticular marks or numbers upon them;
(footnote continued)
22a
and 98 that an air waybill “contain” certain essential
information. Warsaw Convention, Arts. 8 & 9. More
specifically, we must determine whether an air waybill
that incorporates essential particulars by reference to
documents outside the waybill and to statements within
the waybill satisfies Articles 8 and 9.
The Warsaw Convention addresses three transportation
documents and the “particulars” which must be set forth
in each document. The three documents are passenger
tickets, baggage checks and air waybills. See Warsaw
Convention, Chap. II, Sec. I (passenger tickets), Chap.
II, Sec. Il (baggage checks), Chap. II, Sec. III (air way-
bills). The consequences for violating a “particular”
requirement depend upon which transportation document
and which “particular” are involved.
With respect to the air waybill, Article 8 of the Con-
vention requires that the waybill “shall contain” seven-
teen particulars. Warsaw Convention, Art. 8(a)-(q). Of
the seventeen particulars, ten are deemed essential—
including the “agreed stopping places” and the “name
and address of the first carrier.” J/d., Art. 8(c) & (e), Art.
9. Under Article 9, if the waybill does not “contain” the
essential particulars, the carrier may not avail itself of
the Convention’s limited liability protection. /d., Art. 9.
(i) The weight, the quantity, the volume, or dimensions of the
goods.
Warsaw Convention, Art. 8.
8 Article 9 provides:
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 his liability.
Warsa’v Convention, Art. 9.
23a
We examined Article 8 and Article 9 of the Conven-
tion in Exim Indus. v. Pan Am. World Airways, 754 F.2d
106, 108 (2d Cir. 1985). In that case, the carrier did not
include all of the particulars listed in subsections (h) and
(i) of Article 8. We first noted that the text of subsec-
tions (h) and (i) was ambiguous because it was not clear
whether the text should be read to require one or all of
the listed items. Jd.; see also n.7, supra. We therefore
turned to traditional interpretive techniques and con-
cluded that Article 9 does not deprive a carrier of limited
liability where the waybill omits a subsection (h) or (i)
particular unless the omission is of practical commercial
Significance. Jd.
Parties to litigation before this Court have argued
repeatedly that Chan, 490 U.S. 122, implicitly overruled
Exim. Each time, we rejected that argument. See, e.g.,
Maritime Ins. Co. Ltd. v. Emery Air Freight Corp., 983
F.2d 437, 440 (2d Cir. 1993); Distribuidora Dimsa v.
Linea Aerea del Cobre S.A., 976 F.2d 90, 95-96 (2d Cir.
1992). In both Maritime Ins. and Distribuidora Dimsa.
we explained that Exim did not violate the rule invoked
in Chan—that a treaty should be interpreted according to
its plain language—because Exim involved ambiguous
language. Maritime Ins., 983 F.2d at 440; Distribuidora
Dimsa, 976 F.2d at 96.
Although we limited Exim’s commercial significance
approach to subsections (h) and (i), Maritime Ins., 983
F.2d at 440, we did so only because the remaining sub-
sections of Article 8 did not contain the same conjunc-
tive-disjunctive ambiguity. While our language in so
limiting Exim concededly was broad, we also distin-
guished between omissions and deviations in language
and explained that Article 9 offers little guidance with
respect to deviations. Jd. We concluded that Article 9
24a
clearly and unambiguously deprives an air carrier of lim-
ited liability if its air waybill omits any other essential
Article 8 particular. Jd. However, Maritime Ins. does not
provide that deviations from the literal language of Arti-
cle 8 per se deprive an air carrier of limited liability
under Article 9.
We extract three rules from this pertinent body of case
law. First, if an air carrier omits any of the enumerated
particulars of subsections (h) and (i) of Article 8, Arti-
cle 9 deprives the carrier of limited liability protection
if the omitted particular is of commercial significance.
Exim, 754 F.2d at 108. Second, if an air carrier omits any
other essential particular from its air waybill, Article 9
deprives the air carrier of limited liability protection
regardless of commercial significance. Maritime Ins.,
983 F.2d at 440. Third, if an air waybill includes an
essential particular, but deviates in language or some
other respect, the question of whether or not Article 9
deprives the air carrier of limited liability may be deter-
mined with the assistance of traditional methods of inter-
pretation. /d.
In short, the operation of Articles 8 and 9 is relatively
clear with respect to pure omissions. However, the text
of Articles 8 and 9, when considered separately or
together, offers little guidance as to the manner in which
an air carrier must include the particulars in the air way-
bill. In other words, Article 9 does not address the con-
sequences of less than strict compliance with, but more
than pure omission of, the requirements of Article 8.
Thus, beyond the context of pure omissions, we may
consider sources outside of the text to determine whether
a particular air waybill satisfies Article 8. Proper sources
include the drafting history of the Convention and of the
25a
specific provisions in question, the decisions of other
courts interpreting the provisions in questicn, particu-
larly those of sister signatories to the Convention. and
other rules of construction. See, e.g., id. (stating that
“when language is unclear, courts are enjoined to con-
Strue treaties more liberally than private agreements”).
After considering these sources, we must determine
whether the manner of compliance, or the information
provided, satisfies the purpose of requiring the specified
particular to be included in the waybill.
The dispute in this case centers around subsections (c)
and (e) of Article 8. These provisions require an air car-
rier to include “[t]he agreed stopping places” and “[t]}he
name and address of the first carrier” within the air way-
bill. Warsaw Convention, Art. 8(c) & (e).
The SAA-Rustenberg air waybill did not identify Ilha
Do Sal as an agreed stopping place in the space provided
for routing information. Rather, on the back of the way-
bill, it included a statement that the agreed stopping
places were those shown in the carrier’s timetables. See
n.3, supra. With respect to the address of the first car-
rier, in this case SAA, the reverse side of the waybill
contained a statement that “[t]he first Carrier’s address
is the airport of departure shown on the face” of the
waybill. The front of the waybill identified JSA (Jan
Smuts Airport) as the airport of departure.
Our task with Article 8(c) requires us to look beyond
the plain language of that provision. Because the air
waybill does not specifically list the agreed stopping
places, we must determine whether reference to an air
carrier's timetables satisfies Article 8(c)’s requirement
that the waybill “contain” the information. In making
this determination, we turn to sources outside of the text
itself.
26a
The question posed is one of first impression in
this Court, and we have found no other decisions of
our sister circuits on point. However, courts of other
Warsaw signatory nations have approved of satisfy-
ing Article 8(c) by incorporating timetables into the air
waybill. See, e.g., Corecraft Ltd. v. Pan Am. World Air-
ways, [1969] | Q.B. 616, 628 (Q.B.D. 1968), rev'd on
other grounds, [1969] 1 Q.B. 648 (Eng. C.A. 1968)
(approving of incorporation of timetables in satisfaction
of Article 8(c)).
Lower federal courts and state courts within the United
States also have concluded, uniformly, that incorporation
by reference to readily available timetables satisfies
Article 8(c). See, e.g., Tai Ping Ins. Co. Ltd. v. North-
west Airlines, 897 F.Supp. 127, 130 (S.D.N.Y. 1995);
Kraus v. KLM, 92 N.Y.S.2d 315, 317 (Sup. Ct. 1949),
aff'd, 278 A.D. 811, 105 N.Y.S.2d 351 (1st Dep’t 1951).
The district court adopted this rule.
The purpose of Article 8(c) was to notify shippers
of the international character of the transportation and
the applicability of the Warsaw Convention. Minutes,
Second International Conference on Private International
Law, October 4-12, 1929, Warsaw 248-49 (R.C. Horner
& D. Legrez trans. 1975) (containing Report of the
International Technical Committee of Aeronautical
Legal Experts on the Preliminary Draft of a Conven-
tion relating to documents of air carriage by aircraft
(“The particulars indicating that a document covering
international carriage is involved, that is to say, those
provided for under letters (a) through (f), are indis-
pensable.” (emphasis added))) [hereinafter “Horner &
Legrez”’]; K.M. Beaumont, Need for Revision and Ampli-
fication of the Warsaw Convention, 16 J. of Air L. &
Com. 395, 398 (1949); Tai Ping, 897 F.Supp. at 130;
27a
American Smelting & Ref. Co. v. Philippine AirLines,
4 Av. Cas. (CCH) 17,413, 17,414 (N.Y. Sup. Ct. 1954),
aff'd mem., 285 A.D. 1119, 141 N.Y.S.2d 818 (ist Dep’t
1955), aff'd mem., 1 N.Y.2d 866, 153 N.Y.S.2d 900, 136
N.E.2d 14 (1956); Kraus, 92 N.Y.S.2d at 317; see also
Dr. Daniel Goedhuis, Nat’l Airlegislations and the War-
saw Convention 148-50 (1937) (referring to passenger
tickets). While the point of departure and destination
ordinarily would indicate the domestic or international
character of the flight, Article 8(c) recognizes the pos-
sibility of carriage within one sovereign with a stop-
over in another sovereign. See Horner & Legrez, supra,
at 247 (“The definition of international Carriage was
formulated in a broad sense, so that Carriage whose
point of departure and point of destination are situated in
the same State is, nonetheless, considered as interna-
tional when a stop is contemplated in another State.”):
Goedhius, supra, at 148-50 (“[T]he Carriage between
Marseilles and Dakar is internal carriage and. . . car-
riage between Marseilles and Dakar with a stop at
Barcelona is international within the meaning of the
Warsaw Convention.”); Beaumont, supra, at 398 (“The
object of inserting at least one agreed stopping place is
important when carriage between two territories of the
same State is involved because, unless there is an agreed
stopping place in another State, the carriage would not
be ‘international.’ ”).
Although Brink’s concedes that Article 8(c) was
intended to notify shippers of the international charac-
ter of the flight, Brink’s contends that Article 8(c) also
was intended to warn shippers of stops where their
goods might be placed at risk. Brink’s refers to minutes
of the Convention, which demonstrate that some par-
ticipants were concerned about possible seizures of
28a
goods at intermediate stops and therefore desired that
Article 8(c) also require inclusion of the route to be fol-
lowed within the waybill. We note, however, that the
participants ultimately declined to include a requirement
within subsection (c) that the waybill contain the route
to be followed. See Horner & Legrez, supra, at 158-59.
Instead, they included such a requirement within sub-
section (p), which they adopted as an optional] particular.
See Warsaw Convention, Art. 8(p) & Art. 9. Thus, as far
as this record reveals, the purpose of subsection (c) was
to provide notice of the international character of the
flight.
We believe that incorporation by reference satisfies
Article 8(c). An air waybill that refers the shipper to
readily available tiraetables provides sufficient infor-
mation to notify tne shipper of the agreed stopping
places, and therefore, of the international or non-interna-
tional character of the flight. More specifically, the
SAA-Rustenberg air waybill, which referred Rustenberg
to its published timetables for information regarding
stopovers, provided Rustenberg with sufficient infor-
mation to ascertain the regularly scheduled stopover in
the Cape Verde Islands. Thus, the SAA-Rustenberg
air waybill satisfies the requirements of Article 8(c), and
Article 9 does not operate to deprive SAA of limited
liability protection. In this respect, we affirm the judg-
ment of the district court.
Our task with Article 8(e) is an easy one. We need
examine only the text of Article 8(e) and the waybill
itself to conclude that the waybill “contains” the name
and address of the first carrier as required by Article
8(e). Warsaw Convention, Art. 8(e). The reverse side of
the waybill unmistakably identifies the airport of depar-
ture, shown on the face of the waybill, as the address of
29a
the first carrier. The face of the waybill identifies JSA
(Jan Smuts Airport) as the airport of departure. Article
8(e) does not designate any particular section of a way-
bill or any particular words which must be used to relay
the required information. An air waybill that identifies
the airport of departure as the address of the first carrier
within the air waybill itself is sufficient to relay the
required information. Thus, the SAA-Rustenberg air
waybill satisfies the requirements of Article 8(e), and
Article 9 does not operate to deprive SAA of limited lia-
bility protection.
The parties apparently did not refer the district court
to the language identifying the airport of departure as the
address of the first carrier. At least the district court did
not mention this language in its opinion, in which it con-
cluded that the waybill did not contain the address.
Nevertheless, the district court concluded that this over-
sight would not deprive SAA of limited liability pro-
tection because SAA’s address is readily available.
Although the district court erred, the error was harmless
because the district court reached the proper conclusion
as to liability. Thus, in this respect also, we affirm the
judgment of the district court.
In short, we conclude that the SAA-Rustenberg air
waybill satisfies the requirements of both Article 8(c)
and 8(e) and that Article 9 does not deprive SAA of lim-
ited liability protection. Our conclusion is consistent
with the rule of interpreting ambiguous treaty provisions
liberally, as well as with the decisions of both domestic
and foreign courts and, thus, fosters the goal of unifor-
mity advanced by the Warsaw Convention.
30a
CONCLUSION
To the extent that the district court granted partial
summary judgment to SAA on the basis of New York
law regarding employer-employee liability, the judgment
is reversed and the cause remanded for further pro-
ceedings consistent with this opinion. To the extent that
the district court granted partial summary judgment to
SAA on the basis that the air waybill satisfied the
requirements of Article 8 of the Warsaw Convention, the
judgment is affirmed.
3la
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
94 Civ. 1902 (HB)
BRINK'S LIMITED,
Plaintiff,
—against—
SOUTH AFRICAN AIRWAYS,
Defendant.
APPEARANCES:
Craig S. English, Thomas Murphy
Kennedy Lillis Schmidt & English
New York, New York, For Plaintiff.
Franklin Bass, Michael Verde
Rosenman & Colin
New York, New York, For Defendant.
Opinion and Order
Harold Baer, Jr., U.S.D.J.
Plaintiff Brink’s Limited (“Brink’s”) brings this action
against South African Airways (“SAA”), seeking the full
monetary value of six boxes of palladium and rhodium that
were allegedly stolen by SAA employees while in transit from
South Africa to New York.
SAA now moves for partial summary judgment to the
extent that plaintiff’s claim seeks damages over and above the
32a
liability limitation imposed by Article 22 of the Convention
for Unification of Certain Rules Relating to International
Transportation by Air, 49 Stat. (1934), reprinted in 49 U.S.C.
§ 1502 (the “Warsaw Convention”). Brinks contends that the
loss was caused by the “wilful misconduct” of SAA and
therefore is outside the purview of the Warsaw Convention.
If the liability limitation applies, plaintiff's damages would
be limited to approximately $1,520.00. Without the limitation,
plaintiff would be entitled to the full value of the lost cargo—
approximately $1,789,012.67.
For the reasons that follow, SAA’s motion is GRANTED.
§ Facts
The following factual recitation includes a summary of only
those events necessary to determine this motion. On Septem-
ber 10, 1992, plaintiff sent a shipment containing thirty-two
boxes of palladium and two boxes of rhodium from South
Africa to New York via SAA Flight 201. Upon arrival at John
F. Kennedy International Airport, a Brink’s employee dis-
covered that five boxes of palladium and one box of rhodium
were missing.
SAA, the Port Authority Police, and the Gold and Diamond
Branch of the South African Police each conducted an exten-
sive investigation. As of today, the palladium and rhodium
have not been found, nor have the police made any arrests in
connection with this incident.
Il. Discussion
Brink’s seeks the full value of its lost cargo. It contends
that SAA is not entitled to the limited liability protections
afforded to air carriers under the Warsaw Convention because
(1) SAA’s employees allegedly stole the lost cargo, thus con-
stituting wilful misconduct on the part of SAA; and (2) SAA
neglected to include required particulars in its air waybill.
Conversely, SAA argues that (1) theft by an employee does
not constitute wilful misconduct and therefore does not pre-
clude the liability limitation under the Convention; and (2) its
air waybill did not omit required particulars.
33a
A. Limitation of Liability
Plaintiff’s claim is controlled by the Warsaw Convention,
under which an air carrier is strictly liable for loss or damage
to goods sustained during international transport. Republic
Nat'l Bank of N.Y v. Eastern Airlines, Inc., 815 F.2d 232, 236
(2d Cir. 1987). The air carrier’s liability, however, is limited
to 250 francs per kilogram, or approximately $9.07 per
pound. Warsaw Convention, Art. 22(2); Williams Dental Co..
Inc. v. Air Express Int'l, 824 F. Supp. 435, 439 (S.D.N.Y.),
aff'd, 17 F.3d 392 (2d Cir. 1993). This quid pro quo is one of
the primary purposes of the Warsaw Convention. Republic
Nat'l Bank of N.Y., 815 F.2d at 236; Royal Ins. v. Amerford
Air Cargo, 654 F. Supp. 679, 684 (S.D.N.Y. 1987).
Article 25 of the Warsaw Convention creates an exception
to the Article 22(2) limitation of liability:
(1) The carrier shall not be entitled to avail himself of
the provisions of this convention which exclude or limit
his liability, if the damage is caused by his wilful mis-
conduct or by such default on his part as, in accordance
with the law of the court to which the case is submitted,
is considered to be equivalent to wilful misconduct.
(2) Similarly the carrier shall not be entitled to avail
himself of the said provisions, if the damage is caused
under the same circumstances by any agent of the carrier
acting within the scope of his employment.
Accordingly, to overcome the liability limitation, plaintiff
must plead and prove facts showing (a) that SAA engaged in
wilful misconduct, and (b) that this wilful misconduct was the
proximate cause of the loss of the six boxes. Victoria Sales
Corp. v. Emery Air Freight, Inc., 1989 WL 76227, *4
(S.D.N.Y. July 5, 1989).
SAA contends that theft by an employee cannot be deemed
to be an act “within the scope of his employment,” as is
required under Article 25(2). Therefore, even assuming that
plaintiff's allegations are true, SAA did not engage in wilful
misconduct and, thus, is entitled to Article 22(2)’s limitation
of liability.
34a
In the seminal American case on this issue, Rymanowski v.
Pan American World Airways, Inc., 416 N.Y.S.2d 1018 (3d
Dep’t 1979), aff'd, 49 N.Y.2d 834 (1980), plaintiff sued under
the Warsaw Convention for damages in excess of Article
22(2)°8 liability limits for the value of his luggage allegedly
stolen by defendant’s employee. Following New York law, the
court held that an employee acts within the scope of his
employment “ ‘when he is doing something in furtherance of
the duties he owes to his employer and where the employer is,
or could be, exercising some control, directly or indirectly,
over the employee’s activities.’ ” Jd. at 1020 (citation omit-
ted). According to the court, acts such as theft are not com-
mitted in furtherance of the employee’s duties. /d.
Similarly, in Baker v. Lansdell Protective Agency, Inc.,
1985 WL 3964 (S.D.N.Y. Nov. 22, 1985), plaintiff sought the
full value of jewelry allegedly stolen by defendant’s employee
at Kennedy International Airport. Relying on Rymanowski, the
court granted the defendant’s motion for summary judgment
and held that Article 25(2)’s limitation of liability exception
was inapplicable because theft was outside the scope of an
employee’s duties. /d. at *3.
Another court reached the same holding in Denby v.
Seaboard World Airlines, Inc., 575 F. Supp. 1134, 1148
(E.D.N.Y. 1983), rev’d on other grounds, 737 F.2d 172 (2d
Cir. 1984). In that case, the plaintiff sued an air carrier for the
market value of silver that was stolen by defendant’s
employee during air transit from England to New York. The
Denby court cited Rymanowski and held that the Warsaw Con-
vention’s limited liability exception was unavailable because
the employee’s theft fell outside scope of employment and,
therefore, did not amount to wilful misconduct on the part of
the airline carrier.
Apparently, every American court to address this issue has
held that the wilful misconduct exception to the Warsaw Con-
vention’s limitation of liability does not apply to acts of theft
committed by employees. Brink’s acknowledges this but nev-
ertheless argues that Rymanowski and its progeny were
wrongly decided because they erroneously applied American
tort law concepts to their interpretation of the Warsaw Con-
35a
vention. Brink’s cites decisions of foreign courts holding that
theft by an air carrier’s employee does constitute wilful mis-
conduct under the Convention. See, e.g., Rustenburg Platinum
Mines, Ltd. v. South African Airways, [1977] 1 Lloyd’s Rep.
564 (Queen’s Bench) (Commercial Court), aff’d, [1979] 1
Lloyd’s Rep. 19 (English Court of Appeal) (theft amounted to
wilful misconduct of air carrier under Warsaw Convention);
Air Canada v. Swiss Bank Corp. [1988] 1 F.C. 71 (Canadian
Federal Court of Appeals) (same).
Brink’s also cites a Second Circuit decision rendered sub-
sequent to the Rymanowski line of cases which states that the
Warsaw Convention was intended to serve as uniform, inter-
national law for air carrier liability. In re Air Disaster at
Lockerbie, Scotland on December 21, 1988, 928 F.2d 1267,
1287 (2d Cir.), cert. denied, 502 U.S. 920 (1991) (“Locker-
bie”). According to Brink’s, Lockerbie supports the propo-
sition that Rymanowski’s interpretation of wilful misconduct
frustrated the purpose of the Warsaw Convention by contra-
dicting the interpretation given to it by the international
community.
Part of the uniform scheme envisioned by the drafters of
the Warsaw Convention, however, was the application of local
laws to certain questions. See, e.g., Article 21 (allowing
application of local rules to determine contributory negli-
gence), Article 22(1) (allowing application of local law
regarding issue of periodic payment of damages); Article
28(1) (permitting the resolution of procedural issues under
local law); Article 29(2) (requiring statute of limitation issues
to be determined under local law).
In fact, Article 25(1) specifically states that the standard for
wilful misconduct is to be determined “in accordance with the
law of the court to which the case is submitted.” As a matter
of fundamental statutory construction, the word “similarly” at
the beginning of 25(2)—the applicable provision to the
instant action—indicates that this section should be read in
conjunction with the preceding provision, Article 25(1). Wil-
ful misconduct under 25(2) should therefore be determined in
the same manner as it is under 25(1)—by application of local
law. Accordingly, this Court finds no reason to disturb
36a
Rymanowski’s holding that theft by an air carrier’s employee
does not constitute wilful misconduct under the Warsaw
Convention.
B. Air Waybill
Brink’s next claims that SAA should not be entitled to the
Warsaw Convention’s limitation of liability because its air
waybill did not comply with the requirements of Article 8.
Article 8 states, in pertinent part, that:
The air waybill shall contain the following particulars:
(c) The agreed stopping places, provided that the carrier
may reserve the right to alter the stopping places in case
of necessity, and that if he exercises that right the alter-
ation shall not have the effect of depriving the trans-
portation of its international character;
(e) The name and address of the first carrier.
Article 9 covers violations of Article 8:
If the carrier accepts goods without an air waybill hav-
ing 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 his liability.
Plaintiff claims that SAA’s waybill violated Article 8(c) and
(e) by failing to mention the stopover in Ilha do Sal, the Cape
Verde Islands, and by failing to list SAA’s address.
To support its position, Brink’s cites Maritime Insurance
Co., Ltd. v. Emery Air Freight Corp., 983 F.2d 437 (2d Cir.
1993), where the court held that the defendant air carrier was
not entitled to Article 8’s liability limitation because its way-
bill did not contain four Article 8 particulars. /d. at 441. In
reaching its decision, the Maritime court stated that “[bJoth
precedent and reason counsel that courts refrain from altering
even slightly the plain, unambiguous language of a treaty
negotiated among diverse sovereign nations.” /d. at 440.
(tema me ee me a ea RE ae em nn en eR ee ee or
37a
Here, Brink’s alleges that SAA’s failed to list the stopover
in Ilha do Sal, which amounts to a violation of Article 8(c).
SAA’s waybill, however, states:
The first Carrier’s address is the airport of departure
shown on the face hereof. The agreed stopping places
(which may be altered by Carrier in case of necessity)
are those places, except the place of departure and the
place of destination, set forth on the face hereof or
shown in Carrier’s timetable as scheduled stopping
places for the route
As Ilha do Sal is a regularly scheduled stop on SAA Flight
201, this language satisfies the requirements of Article 8(c).
The only Article 9 particular, therefore, that SAA neglected
to include was its address on the waybill. SAA’s address is
easily ascertainable and this oversight alone should not and
will not preclude SAA from employing the Warsaw Conven-
tion’s liability limitation.
Ill. Conclusion
Consistent with this opinion, SAA’s motion for partial sum-
mary judgment is GRANTED.
SO ORDERED.
Dated: New York, New York
April 14, 1995
/s/ HAROLD BAER, Jr.
Haroid Baer, Jr.
United States District Judge
38a
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
94 Civ. 1902 (HB)
Filed: August 14, 1995
BRINK’S LIMITED,
Plaintiff,
-~—against—
SOUTH AFRICAN AIRWAYS,
Defendant.
JUDGMENT
The defendant, South African Airways, having moved on
March 27, 1995 for partial summary judgment limiting its lia-
bility to a maximum of $20.00 per kilo under Article 22 of the
Warsaw Convention and the Court on April 14, 1995 having
granted defendant’s motion; and the Court on July 17, 1995
having denied the motion of the plaintiff Brink’s Limited for
re-argument, and the defendant not having objected to the
entry of a judgment for its maximum liability under the War-
saw Convention, $1,522.00 (for the alleged loss of 76.12 kilos
of palladium and rhodium) it is hereby
ORDERED, ADJUDGED AND DECREED that the plaintiff,
Brink’s Limited, shall have judgment against the defendant,
South African Airways in the amount of $1,522.00.
39a
Dated: New York, New York
July 31, 1995
/s/ ILLEGIBLE
United States District Judge
40a
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
Filed: September 20, 1996
At a stated Term of the United States Court of Appeals for
the Second Circuit, held at the United States Courthouse,
Foley Square, in the City of New York, on the 20th day of
September one thousand nine hundred and ninety-six
Present:
Hon. J. Edward Lumbard
Hon. Thomas J. Meskill
Hon. Roger J. Miner
CIRCUIT JUDGES,
Brink’s Limited
Plaintiff-Appellant,
---\ et
South African Air
Defendant-Appellee
4la
A petition for rehearing having been filed herein by defen-
dant-appellee South African Airways,
Upon consideration thereof, it is
Ordered that said petition be and it hereby is DENIED
GEORGE LANGE III, Clerk
By: BETH J. MEADOR
Beth J. Meador,
Administrative Attorney
42a
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
Docket No: 95-7872
Filed: August 8, 1996
At a Stated Term of the United States Court of Appeals for
the Second Circuit, held at the United States Courthouse,
Foley Square, in the City of New York, on the 8th day of
August, one thousand nine hundred and ninety-six.
PRESENT: HON. J. Edward Lumbard
HON. Thomas J. Meskill
HON. Roger J. Miner
Circuit Judges
BRINK’S LIMITED,
Plaintiff-Appellant,
—_—V-——
SOUTH AFRICAN AIRWAYS,
Defendant-Appeliee.
43a
Appeal from United States District Court for the Southern
District of New York.
This cause came on to be heard on the transcript of record
from the Southern District of New York and was argued by
counsel.
ON CONSIDERATION WHEREOF, it is now hereby ORDERED,
ADJUDGED, and DECREED that the judgment of said district
court be and it hereby is affirmed in part, reversed in part, and
remanded to the said district court for further proceedings in
accordance with the opinion of this court.
For the Court
GEORGE LANGE III, Clerk
KATHLEEN BROUWER __
Kathleen Brouwer
Operations Manager
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.