Aviation

• Author: International Law Group

In 1995, Asiana Airlines, a South Korean corporation, entered into an agreement with Samsung Electronics Co. Ltd., also of South Korea. The deal was that Asiana would ship seventeen parcels of computer chips from Seoul to its subsidiary, Samsung Semiconductor, in San Francisco on Asiana air waybill No. 988-0497-2951 (Waybill) for Asiana Flight 214 on August 10, 1995, apparently a non-stop flight.

When Asiana actually got the shipment, however, it had run out of room on Flight 214. Asiana "solved" the problem by sending it out, without notice to Samsung, on Flight 202 to Los Angeles and by trucking it to San Francisco. The shipment arrived, however, missing two parcels containing $583,000 worth of chips. Chubb & Sons, Inc., the cargo insurer, paid Samsung Semiconductor the full amount of the loss.

As subrogee of Samsung, Chubb sued Asiana in New York federal court to recover the amounts it had paid out. Both sides moved for partial summary judgment on the issue of whether Asiana could invoke Article 22(2) of the Original Warsaw convention (OWC). Article 22(2) limits an international air carrier's liability to $20.00 per kilogram of lost cargo, here $706.00. Chubb replied by pointing out that Asiana had not complied with Article 8(c) of the OWC in that the Waybill failed to list Los Angeles as an agreed upon stopping-place.

While the OWC waybill issue was still sub judice, Asiana got leave to file a supplemental motion challenging the court's subject matter jurisdiction under 28 U.S.C. Section 1331. Asiana contended that the U.S. and South Korea were not in an OWC treaty relation. It noted that the U.S. belonged only to the OWC. Korea on the other hand had adhered only to the Hague Protocol, being a party only to the amended version or "Truncated" Warsaw Convention (TWC).

Spurning the jurisdictional attack, the district court held that the two countries were parties to the articles common to both the OWC and the Hague Protocol, i.e. the TWC, which did not include Article 8(c) on the mandatory contents of waybills. This reading would limit Asiana's liability to $706.00. Reviewing the jurisdiction question under the Interlocutory Appeals Act, 28 U.S.C. Section 1292(b), the U.S. Court of Appeals for the Second Circuit reverses and remands.

The Court first points out that, after the President had ratified the OWC, it went into force for the U.S. on October 29, 1934. As a boost to the then-fledgling air industry, Article 22 limited international...