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Will the Warsaw Convention Apply to a Freight Forwarder?
Adv. Peggy Sharon and Adv. Moshe Abady
Introduction
The freight forwarder may act in several capacities - sometimes just as an agent for its clients for the coordination of the shipment, without issuing an Airway Bill but sometimes it issues an airway bill and undertakes to deliver the shipment from point A to point B.
The liability of an air carrier is provided by the Warsaw Convention which was enacted into the Israeli law by the Israeli Carriage by Air Law - 1980.
The question is whether the liability of the freight forwarder is also governed by the Warsaw Convention?
The Decision in the Promedico Claim
In a recent decision given on 23rd February 2009 by the Tel Aviv Magistrates Court, the Court referred to the applicability of the two year limitation period under the Warsaw Convention to a claim against a freight forwarder which did not issue an Airway Bill (C.C. 44699/07 Promedico Ltd. v. Noga International Forwarding Ltd.).
Facts
In December 2007 Promedico Ltd. (hereinafter: Promedico) filed a claim in the Tel Aviv Magistrates Court pursuant to damage caused to a certain consignment shipped in June 2005 from Switzerland to Israel. The Airway Bill was issued by a Swiss company which acted as the contracting carrier (hereinafter: the Swiss contracting carrier). The claim was originally filed against, inter alia the Israeli freight forwarder as well as against the Swiss contracting carrier.
In view of the two year limitation period which had already elapsed on the date of filing the claim, Promedico agreed to dismiss the claim against the Swiss contracting carrier.
The Israeli freight forwarder filed a motion to dismiss the claim against it arguing that it had served as an agent of the Swiss contracting carrier and hence it should also benefit from the two year limitation period.
Discussion
Relying on the parties' arguments, the Court ruled that there is no dispute that the Israeli freight forwarder served as an agent of the Swiss contracting carrier. However, it was alleged by Promedico that it also served as its agent. The Court determined that as long as the claim relates to the shipping stage, then the freight forwarder may benefit from the short limitation period under the Warsaw Convention, as it served as an agent for the Swiss contracting carrier.
However, the cause of action detailed in the claim refers mainly to wrongful acts allegedly perpetrated by the Israeli freight forwarder during stages after the shipment's arrival in Israel. The Court determined that as the Convention does not apply to the stage which preceded the carriage and/or the stage after it was completed, the Israeli freight forwarder cannot benefit from the shorter limitation period under the Convention.
The Court referred to the Magistrates Court's judgement in the matter of Eden Meira v. Bank Hapoalim (C.C. 51761/03). In this claim DHL served as a freight forwarder for a certain shipment which was damaged. DHL wished to rely on the Airway Bill issued by it, in which its liability was limited according to the Warsaw Convention. The Court rejected DHL's argument as it determined that it did not serve as a carrier, but rather as a freight forwarder and hence, it cannot benefit from the provisions of the Convention.
While referring to this judgement, the Judge refrained from adopting this broad position, and stated that if the freight forwarder issued an Airway Bill and undertook to transport the shipment, it would have benefited from the provisions of the Convention.
The motion to dismiss was denied, nevertheless the Court was willing to re-discuss the applicability of the Convention during the hearing of evidence stage, upon factual evidence which will be presented in respect of the Israeli freight forwarder's role in the carriage.
Previous Judgement - The Transclal Decision
In the matter of C.C. 7029/99 the Tribunal of Standard Contracts was requested by Transclal (an Israeli freight forwarder) to approve a standard contract applying the FIATA model rules for freight forwarding services to Transclal also where it acts as an agent for its clients. The Court declined this request, determining that in this capacity the freight forwarder does not act as a carrier or as an agent for the carrier.
Notwithstanding the above the Tribunal stated that in cases where the freight forwarder acts as a contracting carrier (principal) its legal status is similar to that of the air carrier.
Conclusion
The question under discussion has not yet been dealt with by the Supreme Court. Review of Lower Court judgements leads to the conclusion that the Court will usually apply the Convention on a freight forwarder which issued an Airway Bill and acted as a contracting carrier. However, in the absence of an Airway Bill or in the event the claim is based on causes of action relating to tasks of the freight forwarder not connected to the actual transportation phrase, the Court will tend not to apply the Convention.
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