The most significant change is that for the first time cargo will be subject to an unbreakable liability limit, which under MD99 is SDRs 19 per kilogram for cargo loss, damage or delay claims. As Thailand was not a party to the Warsaw or Warsaw-Hague Conventions, their liability limits did not apply. Carriers were forced to rely only their contractual clauses limiting their liability. Thai law required the express consent of the shipper to these contractual liability limits.
This was not always easy to demonstrate, particularly for cargo consolidated under a master AWB, or where the AWB was executed by the agent on behalf of the shipper. Interpretation by the Thai courts was uncertain, time consuming and not always consistent and Thai courts also refused to enforce clauses limiting liability including where these were not translated into Thai on the AWB, even where the shipper was not Thai, the terms were in very small print or where there was no space for a signature.
This resulted in cargo claims being settled for being 60 and 75% of their invoice value, reflecting the uncertainty over the application of contractual provisions limiting liability. The disparity between the weight and invoice value of many types of cargo has resulted in claims being settled at much higher limits than if the Warsaw, Warsaw-Hague or MC99 limits applied.
“In any event, carriers should respond to cargo claims in the same way as in other jurisdictions where MC99 applies”
Provided that the Thai courts accept that the SDRs 19/kg limit overrides any requirement to obtain the written consent of the shipper, the liability exposure of carriers to cargo claims should be reduced and claims handling simplified. Carriers should ensure that the SDRs 19/kg limit is applied to all claims arising on or after 2 October. It is possible that cargo interests may seek to challenge the application of the liability limit and its relationship to the requirement for written consent in the Thai courts as MC99 does not expressly remove this requirement. Decisions of Thai courts do not create binding precedent. In any event, carriers should respond to cargo claims in the same way as in other jurisdictions where MC99 applies.
“Carriers should now apply a 2 year limitation and written notice must be given within 14 days of delivery”
A related benefit is that carriers can now use e-AWBs in the same way as they are used in other countries which have ratified MC99, provided the courts accept that the requirement for express consent can be given electronically and not in writing, as has been the practice to date. In handling claims, carriers should now apply a 2 year limitation period to claims, which is an increase from the current limitation period of 1 year. Written notice must be given within 14 days of delivery. This changes the current requirement to provide notice of damage or loss within 8 days of delivery.
“One issue to consider is potential customs duties and other taxes where cargo is delivered to a party when in transit in Thailand”
Although the Act gives effect to the provisions of MC99 in relation to disposal of cargo, it is not clear how smoothly this will be implemented in view of existing procedures and practices, particularly where delivery is to a party other than the named consignee. One issue to consider is potential customs duties and other taxes where cargo is delivered to a party when in transit in Thailand. Although the consignor is liable for any expenses resulting from the exercise of the right of disposition, airlines may face pressure to meet customs duties and any storage and handling charges, particularly where the consignor is not based in Thailand.
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