1.

0 Introduction
There is only one legislation that governing the carriage by air in Malaysia, which is
Law of Malaysia Act 148, the Carriage by Air Act 1974. This act passed on 30 July 1974 and
come in force on 29 August 1974. Carriage by Air Act 1974 gives effect to certain
Conventions relating to carriage by air and to provide for matters connected therewith and
ancillary thereto. There are only fourteen sections in this Act.
Beside the Carriage by Air Act 1974, Malaysia also adopted the Warsaw Convention
1929 which entered into forced on 13 February 1933 and has been adopted by 151 states.
The Warsaw Convention 1929 is an international convention which regulates liability, in the
event of accident, for international carriage of persons, luggage or goods performed by
aircraft for reward.1 It was the first comprehensive legal framework governing aviation at the
international level, playing an essential role in supporting the development of the sector and
establishing a set of principles, most of which are still effective and constitute the basis of
modern aviation law.2 Under the interpretation of Carriage by Air Act 1974, Convention
means the Convention for the unification of certain rules relating to the international carriage
by air known the Warsaw Convention amended at The Hague 1955. There are three
schedules of Warsaw Convention have incorporated in Carriage by Air Act 1974.

2.0 Documentation
Under the first schedule of Warsaw Convention that incorporated in Carriage by Air
Act 1974, Article 8 sets out three information which an Air Waybill 3 must contain, firstly is
the places of departure and destination, secondly is at least an agreed stopping places and
thirdly is a notice to the consignor if the carriage involves an ultimate destination or stop in a
1 Article 1 (1) of Warsaw Convention 1929.
2 The postal history of ICAO: The Warsaw System on Air Carrier Liability.Retrived from
http://www.icao.int/secretariat/PostalHistory/the_warsaw_system_on_air_carriers_liability.htm

3 Warsaw Convention, Article 5 (1) Every carrier of cargo has the right to require the consignor to make out and
hand over to him a document called an air waybill; every consignor has the right to require the carrier to
accept this document.

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country other than the country of departure, the Warsaw Convention may be applicable. The
non-compliance of Article 8 (c) will result in the loss of the carrier's right to invoke the
liability limits of the Convention.
2.1 Deficient of cargo documentation
Under Warsaw Convention, Article 9 that incorporated in Carriage by Air Act 1974, if
the consignment note does not contain the notice mentioned in Article 8, it does not affect the
existence of validity of a contract of carriage but denies the carriers right to rely on the
liability limitations of the Convention under Article 22, paragraph (2).4

3.0 Liability of a Carrier

The liability of a carrier also mentioned in the first schedule of Warsaw Convention
that incorporated in Carriage by Air Act 1974. Those liabilities lied on the Chapter III, from
Article 17 until Article 30.
Under Warsaw Convention, Article 18 provides the liability when there is damage to
cargo. A carrier is strictly liable as long as the event which caused the damage took place
during the carriage by air. It is notable that there is major difference between cargo liability
under Article 185 and passenger liability under Article 17.6 Article 18 uses the term 'event'
whereas Article 17 uses 'accident'. Article 18 is therefore broader in scope than Article 17.

4 Article 22 of Warsaw Convention,2(a) In the carriage of registered baggage and of cargo, the liability
of the carrier is limited to a sum of two hundred and fifty francs per kilogramme unless the passenger or
consignor has made, at the time when the package was handed over to the carrier, a special declaration of
interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the
carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than
the passengers or consignors actual interest in delivery at destination.
2(b) In the case of loss, damage or delay of part of the registered baggage or cargo, or of any object
contained therein, the weight to be taken into consideration in determining the amount to which the carriers
liability is limited shall be only the total weight of the package concerned. Nevertheless, when the loss, damage
or delay of a part of the registered baggage or cargo, or of an object contained therein, affects the value of other
packages covered by the same baggage check or the same air waybill, the total weight of such package shall also
be taken into consideration in determining the limit of liability.

5 Article 18 of Warsaw Convention, (1) The carrier is liable for damage sustained in the event of the
destruction or loss of, or of damage to, any registered baggage or any cargo, if the occurrence which caused the
damage so sustained took place during the carriage by air.

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Article 19 of Warsaw Convention mentioned the liability for damage to cargo

occasioned by delay. In this event, carrier is liable however "all necessary measures" defence
may be used.
In is notable that the Warsaw Convention system state that any kind of questions
about delay, but does not give a definition of the term delay, but in law case it is assumed that
delay has to be unreasonable. Delay occurs in the air transport when passenger, baggage or
cargo do not arrive at their destination at the time that had indicated in the contract of
carriage. There is an interpretation by Arpad Szakal (2013),
It is submitted that the answer is to be found in the common law rule that, in the
absence of any express contract, a carrier is only bound to perform the carriage
within a reasonable time; accordingly delay means failure to complete the carriage
in a reasonable time.
According to the interpretation above, delay would happen when the passenger,
baggage or cargo are unsuccessfully delivered and completed on the time that had been
agreed at the destination. Delay also defined to include the carriers failure to timely handle
over cargo because it misplaced the shipping document. Therefore, the carrier is liable for
damage occurs by delay unless the carrier can establish the excepted reason or the carrier
does not any breach of duty on his part under Article 207 and Article 218, then he might not
liable for the delays.

6 Article 17 of Warsaw Convention provides that the carrier is liable for damage sustained in
the event of the death or wounding of a passenger or any bodily injury suffered by a
passenger, if the accident which caused the damage so sustained took place on board the
aircraft or in the course of any of the operations of embarking or disembarking.
7 Article 20 of Warsaw Convention provides that the carrier is not liable if he proves that he and his servants or
agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take
such measures.

8 Article 21 of Warsaw Convention provides that if the carrier proves that the damage was caused by or
contributed to by the negligence of the injured person the court may, in accordance with the provisions of its
own law, exonerate the carrier wholly or partly from his liability.

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Delay is a frequent occurrence in carriage by air. The most common cause of delay in
air transport is meteorological conditions like bad weathers. In addition, it might delay due to
some sense of operational matter like mechanical failure during the service even though the
ultimate cause of the failure can be traced back to poor maintenance beforehand (Arpad
Szakal, 2013).
In the case of Etonic Garment Manufacturing Sdn Bhd v. Kunn-G Freight Systems
(M) Sdn Bhd (Malaysian Airline System, third party),9 the plaintiff, a private limited company
carrying on business as a manufacturer of garments for the export market, claimed against the
defendant for damages and losses arising from the failure to deliver the garments (the
consignments) within a reasonable period of time. The plaintiff had used the airfreight
because of the delay in manufacturing the garments and the urgency of the new product
launch for the winter. The buyer only received 184 cartons instead of 461 cartons. The buyer
then cancelled their order for the remaining 277 cartons that were yet to be delivered. As a
result of the cancellation, the plaintiff claimed against the defendant for losses for unutilised
transportation fees, costs of production, general expenditure, loss of profits and loss of future
profits for the next five years. The defendant, a freight forwarder and licensed customs broker
who had been the plaintiffs freight forwarder since 1993, disputed the plaintiffs claim. The
defendant contended that their responsibility to the plaintiff was only to the extent of booking
a place in the plane for the goods and delivering the goods to the cargo area together with
proper documentation. The defendant contended that they had complied with its
responsibility when the cargo division of Malaysian Airline System acknowledged receipt of
the packages in good condition. It denied any negligence in carrying out its duties or that it
had caused the cancellation of the plaintiffs order or loss of future contracts.
The court dismissed the plaintiffs claim with cost and held that the defendant had
complied with its contractual obligations by delivering the consignment to MASkargo. It was
not responsible for transporting the goods to Dublin and as such cannot be held negligent for
not ensuring that the goods were transported in a timely manner. Accordingly, any damage,
loss or loss of profit suffered by the plaintiff could not be said to have arisen from the
negligence of the defendant. Since the plaintiffs case against the defendant failed, no order
can be made against MAS for indemnity as MAS was brought in as a third party.

9 [2011] 3 MLJ 98.

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Therefore, it is important to determine that a freight forwarder is a broker who

arranges consignments between the consignee and the carrier. The freight forwarder assists
the consignor to deliver the consignment into the hands of the carrier but has no liability to
ensure the cargo was delivered timely and was not the purpose of the Warsaw Convention.

4.0 Limitation of Liability

There is a presumption that the carrier is liable for any loss or damage to cargo.
However for delay, the carrier disposes of a number of narrowly defined defences to
exonerate him, wholly or partly, from liability. The burden of adducing the necessary
evidence in order to prove the defences is on the carrier. There are two defences available to a
carrier, which are firstly, the defence of all necessary measures 10 and secondly, the defence
that the claimant was contributory negligent.11
For the first mentioned defence is laid on the Article 20 of Warsaw Convention, the
carrier is not liable to pay any damages in the situation that he can prove that he and his
agents have taken all necessary measures to avoid the damage or it was impossible for him or
them to take such measures. The case law has generally interpreted this provision as requiring
only that all reasonable measures were taken. However, in order to meet this test the carrier
will probably be obliged to prove the cause of the loss or damage.
For the second mentioned defence is laid on the Article 21 of Warsaw Convention, the
carrier is not liable if he proves that there was contributory negligence on the part of the
injured persons. In this case the Court may, in accordance with the provisions of its own law,
exonerate the carrier from liability either wholly or partially. In order to rely upon this
provision, the carrier must establish both the plaintiff was negligent and that the plaintiffs
negligence caused the loss or damage.
According to Article 22 of the Warsaw Convention, it stated that Article 22 gives the
carrier a right to limit their liability which limit the air carrier's liability for loss, damage, or
delay to cargo to a certain maximum amount. For carriage of goods, the liability of a carrier is
10 Article 20 of Warsaw Convention.
11 Article 21 of Warsaw Convention.
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limited to a sum of 250 Francs per kilogram and is dependent whether the consignor has
made a declaration of value at the time of delivery and already paid extra sum. 12 In that case
the carrier will be liable to pay a sum not exceeding the declared sum.The declaration of
value should mentioned in the airway bill and the verbal statement of value made on phone
call not considered a special declaration.
The maximum amounts of damages payable by the carrier, as limited by the Act are
stated also. Franc means 65 milligram of gold and millesimal fineness 900. 13 Where the
liability of the carrier is limited to 2, 50,000 francs, the court may award it in a form of
periodical payment, with equivalent capital value of the above. The carrier may, by a special
agreement, increase his liability but cannot reduce it.
In the case of All Nippon Airways Co Ltd v. Tokai Marine& Trading Co Ltd, MAS
Kargo,14 the appellant's ('defendant') ground handling agent, had received 30 cartons of fresh
tuna ('the cargo') from the respondent ('plaintiff') in good condition. The cargo was under the
care and control of the defendant's agent. However, 20 cartons were crushed and damaged
and were unfit for human consumption. As a result, the plaintiff could only bill its consignee
in Japan for the ten intact cartons. This led to the plaintiff's action against the defendant in the
Sessions Court where the plaintiff obtained judgment against the defendant in the sum of
RM198,144.16. On appeal, the learned Judicial Commissioner ('JC') had affirmed the
Sessions Court's judgment. Dissatisfied with the said decision, the defendant appealed to this
court.
The appeal court held that the defendant's liability as a carrier was governed by art.
22(2)(a) of the Warsaw Convention whereby in the case of the carriage of registered cargo,
the carrier's liability was limited to a sum of 250 francs per kg unless the consignor has made,
at the time when the consignment was handed over to the carrier, a special declaration of
interest in delivery at destination and had paid a supplementary sum if the case so requires. In
the absence of a special declaration of interest in delivery at destination under art. 22(2)(a) of
the Warsaw Convention, there was no basis to invoke the second limb thereof which provides
12 Article 22 (2) (a) of Warsaw Convention.
13 Article 22 (5) of Warsaw Convention.
14 [2012] 9 CLJ 429
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for an exception to the general rule governing the limit of the carrier's liability under art.
22(2)(a). The court also held that based on the Carriage by Air (Ringgit Equivalent) Order
1978, the sum of 250 francs per kg has been fixed at RM48.00. The court allow this Appeal
in part, set aside the aforesaid order of the High and substitute it with a sum of
RM110,400.00 with interest from the date of the Sessions Court judgment to the date of
realization. Deposit to be refunded to the Defendant (Appellant).
Therefore, the quantity of damages must be complied with the Article laid down in
Warsaw Convention to secure the limitation of damages.

5.0 Exclusivity of remedy

Article 24(1) of Warsaw Convention provides that in cases covered by Article 18 and
Article 19 any action for damages, however founded, can only be brought subject to the
conditions and limits set out in this Convention. With specific reference to cargo claims, this
raises the question as to whether the true owner of goods may bring action under the
Convention because by Article 14,15 the rights specified in the Convention may only be
enforced by the Consignor or Consignee. The broad question of whether the owner of
damaged cargo is entitled to sue the carrier disguises two problems. Firstly, whether Warsaw
limits the cause of action within the Convention to the named consignor and consignee.
Secondly, if Warsaw does so restrict the cause of action, whether it also extinguishes the right
of the owner outside the Convention to sue on his/her title to the goods.
6.0 The procedure for damages
The person entitled to damages must complain to the carrier within 14 days of the date of
delivery in case of loss of or damage to goods and 21 days in cases where damages are
claimed for delay in transit.16 Suits may be filed in the court having jurisdiction over the place
of destination' or over the place of business or residence of the carrier. Suits must be filed
15 Article 14 of Warsaw Convention provides that the consignor and the consignee can respectively enforce all
the rights given them by Articles 12 and 13, each in his own name, whether he is acting in his own interest or in
the interest of another, provided that he carries out the obligations imposed by the contract.

16 Article 26 (2) of Warsaw Convention.

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within two years of the date of arrival of the carrier at the place of destination or the date on
which it should have arrived or the date on which the carriage stopped.17

7.0 Conclusion
In conclusion, as the development of e-commerce led to many new markets and hence
the air transportation demand growth along with the eonomic. According to Chief Operating
Officer of FedEx, Michael Ducker said that aircraft carries only 2 per cent of international
trade by volume but around 40 per cent by value. This shows that aircraft continued as one of
the important method of delivering cargo safer and faster. From time to time, Malaysia has
well- established the Carriage of Air Act 1974 by incorporating with amended Warsaw
Convention. The only thing is, aircraft brings harsh impact on the climate and environment
compared to other mode of carriage of goods. It would be hard for Malaysia to continue
relying on aircraft as the efficient mode of carriage like the developed country, for example
China as the fast growing cargo market in the industry.
Therefore, it is important to govern the environmental impacts by implementing
regulation policy measures, for example taxes and charges or emission trading scheme.

8.0 References
Arpad Szakal LL.M. (2013). Air carriers Liability in Cases of Delay. Retrieved from
http://www.aviationlaw.eu/wp/wp-content/uploads/2013/09/Air-Carriers-Liability-inCases-of-Delay.pdf
Carriage by Air Act 1974. Law of Malaysia. Retrieved from http://www.agc.gov.my/
Akta/Vol.%203/Act%20148.pdf
United Nations Conference on Trade and Development (UNCTAD). (2006). Carriage of
goods by air: A guide to the international legal framework. Retrieved from
http://unctad.org/en/Docs/sdtetlb20061_en.pdf

17 Article 29 of Warsaw Convention.

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Cases
All Nippon Airways Co Ltd v. Tokai Marine& Trading Co Ltd [2012] 9 CLJ 429.

Etonic Garment Manufacturing Sdn Bhd v. Kunn-G Freight Systems (M) Sdn Bhd (Malaysian
Airline System, third party) [2011] 3 MLJ 98.

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