December 22 2010
On June 28 2010 the Magistrates Court of Tel Aviv handed down a judgment on the applicability of the Warsaw Convention to a carrier's agent.(1) The court examined whether the convention applied not just to the carrier, but also to the forwarder of the shipments and to the entity which stored the shipment at the airport, as agents of the carrier.
Two claims were filed in respect of cargo which was shipped by Taga Electronic Components - one by Taga and the other by Israel Phoenix Insurance Co. The two claims were heard together.
The claims were filed against:
The plaintiffs alleged that the shipments were lost or stolen by Gal before reaching their final destination and that the defendants were liable for the full amount of the shipments.
The plaintiffs further alleged that the shipments were stolen due to the defendants' negligence while the shipments were in their possession or under their responsibility, and that the defendants breached the contract between the parties by not delivering the shipments to their final destination.
The main defence argument was based on the applicability of the convention and hence the restriction of liability for an air carrier and its agents under the convention. The plaintiffs denied that the convention applies to the defendants in this claim.
The departure and destination of both shipments were in countries that are party to the convention. Therefore, the main question dealt with by the court was whether the convention should apply not only to DHL International (the carrier), but also to the other defendants as agents of the carrier. In order to answer this question, the court analysed the role of each defendant.
Maman Cargo Ltd
The court decided that, under the circumstances of this case, Maman should be considered to be the air carrier's agent, as its services - storage, unloading and dispatching the cargo to and from the aircraft - were part of the services provided by the carrier in the framework of the air carriage.
Accordingly, the court reached the conclusion that Maman's liability was limited under the Warsaw Convention.
The court cited a previous judgment which had been handed down in the matter of Maman v Orman.(2) In this case the court ruled that as the operator of the cargo terminal Maman should be considered to be an agent for the air carrier. The services rendered by Maman were as an accompaniment to the services of the air carrier and were "in the furtherance of the contract of carriage".
This ruling contradicts a previous judgment handed down by the District Court of Tel Aviv,(3) in which it was determined that Maman should not be considered to be the air carrier's agent.
The court concluded that as DHL Israel's services as a carrier were carried out in furtherance of the contract of carriage up until its final destination, it should also be considered to be an agent of the air carrier and, therefore, the convention should also apply to DHL Israel.
The plaintiffs argued that Gal - who stole the shipments - was an employee of DHL Israel and hence, in view of Clause 25 of the convention (wilful misconduct), DHL's liability should not be limited under the convention. The court did not accept this argument as the theft by Gal was not made in his role as employee of DHL, and therefore DHL did not have vicarious liability for his acts. Accordingly, the court ruled that DHL Israel's liability was also subject to the limitations under the convention.
As a result of his conviction for theft, the court ruled that Gal was obliged to compensate the plaintiffs for the full claimed amount.
An appeal has been filed before the district court and, in view of the broad findings of the Magistrates Court, the appellate court's judgment will be interesting.
For further information on this topic please contact Moshe Abady or Keren Marco at Levitan, Sharon & Co by telephone (+972 3 688 6768), fax (+972 3 688 6769) or email (email@example.com or firstname.lastname@example.org).
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