3. Under the Montreal Convention

Right of Disposition of Cargo

Subject to its liability to carry out all its obligations under the contract of carriage, the consignor has the right to dispose of the cargo by:

• Withdrawing it at the airport of departure or destination; or by
• Stopping it in the course of the journey on any landing; or by
• Calling for it to be delivered at the place of destination or in the course of the journey to a person other than the consignee originally designated; or by
• Requiring it to be returned to the airport of departure. (Art. 12, MC)¹

The consignor must not exercise this right of disposition in such a way as to prejudice the carrier or other consignors and must reimburse any expenses occasioned by the exercise of this right. (Ibid.)

If it is impossible to carry out the instructions of the consignor, the carrier must so inform the consignor forthwith. (Ibid.)

If the carrier carries out the instructions of the consignor for the disposition of the cargo without requiring the production of the part of the air waybill or the cargo receipt delivered to the latter, the carrier will be liable, without prejudice to its right of recovery from the consignor, for any damage which may be caused thereby to any person who is lawfully in possession of that part of the air waybill or the cargo receipt. (Ibid.)

The right conferred on the consignor ceases at the moment when that of the consignee begins in accordance with the Convention’s provisions on delivery of the cargo. Nevertheless, if the consignee declines to accept the cargo, or cannot be communicated with, the consignor resumes its right of disposition. (Ibid.)

Where the supervisor of the consignee signed the delivery receipt for the goods shipped, the consignee cannot sue the shipping company for non-delivery of the goods. (National Trucking and Forwarding Corporation v. Lorenzo Shipping Corporation, G.R. No. 153563, 7 February 2005)²

EXTENT OF LIABILITY OF AIR CARRIER

Destruction, Loss or Damage to Checked and Unchecked Baggage

Damage sustained in case of destruction or loss of, or of damage to, checked baggage upon condition only that the event which caused the destruction, loss or damage took place on board the aircraft or during any period within which the checked baggage was in the charge of the carrier. (Art. 17(2), MC)³

NOTE: The carrier is not liable if and to the extent that the damage resulted from the inherent defect, quality or vice of the baggage. In the case of unchecked baggage, including personal items, the carrier is liable if the damage resulted from its fault or that of its servants or agents. (Ibid.)⁴

If the carrier admits the loss of the checked baggage, or if the checked baggage has not arrived at the expiration of twenty-one days after the date on which it ought to have arrived, the passenger is entitled to enforce against the carrier the rights which flow from the contract of carriage. (Art. 17(3), MC)⁵

Unless otherwise specified in the Montreal Convention, the term “baggage” means both checked baggage and unchecked baggage. (Art. 17(4), MC)⁶

Damage to Cargo

Damage sustained in the event of the destruction or loss of, or damage to, cargo upon condition only that the event which caused the damage so sustained took place during the carriage by air. (Art. 18(1), MC)⁷

NOTE: The carrier is not liable if and to the extent it proves that the destruction, or loss of, or damage to, the cargo resulted from one or more of the following:

• Inherent defect, quality or vice of that cargo;
• Defective packing of that cargo performed by a person other than the carrier or its servants or agents;
• An act of war or an armed conflict; or
• An act of public authority carried out in connection with the entry, exit or transit of the cargo. (Art. 18(2), MC)⁸

For purposes of Art. 18(1) of MC⁹, carriage by air comprises the period during which the cargo is in the charge of the carrier. (Art. 18(3), MC)¹⁰

The period of the carriage by air does not extend to any carriage by land, by sea or by inland waterway performed outside an airport. If, however, such carriage takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air. If a carrier, without the consent of the consignor, substitutes carriage by another mode of transport for the whole or part of a carriage intended by the agreement between the parties to be carriage by air, such carriage by another mode of transport is deemed to be within the period of carriage by air. (Art. 18(4), MC)¹¹

Arbitration

The parties to the contract of carriage for cargo may stipulate that any dispute relating to the liability of the carrier under this Convention shall be settled by arbitration. Such agreement shall be in writing. (Art. 34(1), MC)¹²