Liability of the Air Carrier in Goods Transport under the 1999 Montreal Convention: What You Need to Know

International air freight is fast, but legally complex when it comes to liability. If goods are lost, damaged, or delivered late, the question immediately arises whether and to what extent the air carrier is liable. In many cases, the governing instrument is the 1999 Montreal Convention. The Convention provides a uniform liability regime for international carriage by air and establishes, specifically for the transport of goods, an independent liability system comprising liability requirements, grounds for exoneration, liability limits, notice obligations, and jurisdiction rules. Turkey is a State Party to the Convention.

Table of contents

• What is the legal basis for liability in air freight?
• For which types of damage is the air carrier liable in goods transport?
• When does the air carrier's custody period begin and end?
• Is the air carrier also liable for delay?
• When can the air carrier be exonerated?
• What liability limits apply to cargo damage and delay?
• How can higher liability be achieved through a declaration of value?
• What role do the air waybill and freight documentation play?
• What must be observed regarding damage notices and limitation periods?
• Which court has jurisdiction for cargo claims?
• What does this mean in practice for shippers, consignees, and cargo insurers?
• What applies under Turkish law?
• Legal advice

What is the legal basis for liability in air freight?

The 1999 Montreal Convention (MC) applies to the international carriage of passengers, baggage, and cargo by aircraft for reward. For goods transport, the decisive question is whether the specific carriage qualifies as international carriage by air within the meaning of the Convention. Where the Convention applies, it generally displaces other bases for claims, as actions for damages may only be brought subject to the conditions and liability limits of the MC.

Carriage is considered international where, according to the contractual arrangements of the parties, the place of departure and the place of destination are situated in the territories of two different States Parties to the MC, or where the place of departure and the place of destination are in the territory of a single State Party but an agreed stopping place is located in the territory of another State.

Special Rules for EU Air Carriers

Within the European Union, the liability regime of the MC has been extended to all EU air carriers by Regulation (EC) No 2027/97 as amended by Regulation (EC) No 889/2002. As a result, the liability rules of the MC apply to these carriers even for purely domestic flights. This does not constitute a direct application of the Convention to domestic flights but rather an EU-level measure ensuring a uniform liability regime within the Union.

Mandatory Law

The liability regime of the MC is mandatory law (Art. 26 and 47 MC). Contractual provisions that reduce the carrier's liability below the limits set out in the MC are void. However, Art. 27 MC permits the air carrier to waive defences available to it under the Convention — that is, to agree to liability extensions to its own detriment.

For which types of damage Is the air carrier liable in goods transport?

Under Art. 18 MC, the air carrier is liable for destruction, loss, or damage to cargo, provided that the event causing the damage occurred during the carriage by air. In addition, Art. 19 MC imposes liability for delay damages. The liability system thus distinguishes between physical damage to the goods on the one hand and delay-related losses on the other.

Liability for destruction, loss, or damage under Art. 18 MC is a strict custody-based liability. The air carrier is held liable solely on the basis that the damage occurred during the period in which the goods were in its charge. Whether the carrier was at fault is irrelevant. As a counterbalance to this strict liability, the obligation to compensate is subject to monetary limits.

When does the air carrier's custody period begin and end?

Liability under Art. 18 MC requires that the goods were in the charge of the air carrier at the time the damage occurred. "Charge" refers to the period during which the cargo, having been taken over by the air carrier, is subject to its actual control and responsibility. Accordingly, custody does not begin only with the departure of the aircraft but may commence with the acceptance of the goods at the airport, their storage in the cargo area, or preparations for loading. Likewise, it does not end upon landing but generally only upon the proper handover of the consignment at the place of destination.

Land, sea, or inland waterway transport carried out outside an airport does not, as a rule, fall within the scope of carriage by air under the Montreal Convention. However, where such transport takes place in the performance of a contract of carriage by air for the purpose of loading, delivery, or transhipment, there is a presumption in favour of the claimant that any established damage occurred during the carriage by air, unless the contrary is proved. In practice, the precise delineation of the custody period is often decisive, which is why the acceptance, storage, handling, and delivery of goods should be documented as thoroughly as possible.

Is the air carrier also liable for delay?

Art. 19 MC expressly provides that the air carrier is also liable for damage occasioned by delay in the carriage of cargo by air. Unlike loss, destruction, or damage to the goods, this concerns not physical damage to the cargo itself but the economic consequences of late delivery. Additional costs, production losses, contractual penalties, or other financial disadvantages arising specifically from the consignment not arriving at the place of destination on time may fall within this scope. However, the claimed damage must be specifically substantiated and proved; the burden of proof rests with the injured party.

When can the air aarrier be exonerated?

The air carrier's liability for cargo damage under Art. 18 MC is not unlimited. Art. 18(2) MC expressly provides that the carrier is not liable if it proves that the destruction, loss, or damage to the cargo is attributable to one of the enumerated grounds for exoneration. These include, in particular, an inherent defect, quality, or vice of the cargo; defective packing by a person other than the carrier or its servants; an act of war or armed conflict; and acts of public authority carried out in connection with the entry, exit, or transit of the cargo.

Liability in cases of delay is likewise not unlimited. The carrier may be exonerated if it proves that it and its servants took all reasonable measures to avoid the damage or that it was impossible to take such measures. In practice, each individual case must be examined to determine the cause of the delay, whether it lay within the carrier's sphere of influence, and whether a compensable financial loss has actually been incurred. Not every delivery delay automatically gives rise to a claim; the decisive factor is whether the delay has caused a demonstrable economic disadvantage through a causal link.

In addition, Art. 20 MC must be considered. Under this provision, the carrier's liability may be wholly or partly excluded if it proves that the damage was caused or contributed to by the negligence or other wrongful act or omission of the claimant or the person from whom the claimant derives its rights. In practice, this means that each individual case requires an examination of whether the damage falls entirely within the carrier's sphere of responsibility or whether statutory grounds for exoneration or contributory conduct on the part of the claimant apply.

What liability limits apply to cargo damage and delay?

Under Art. 22(3) MC, the air carrier's liability for destruction, loss, or damage to cargo as well as for delay is, as a general rule, limited in amount. The relevant measure is a maximum liability amount per kilogram of the affected cargo. The limit originally provided for in the Convention of 17 Special Drawing Rights (SDR) per kilogram has been increased through the revision mechanism under Art. 24 MC and stands at 26 SDR per kilogram as of 28 December 2024. This limit also applies to delay damages, unless a higher liability has been validly agreed upon or a special declaration of interest has been made.

The weight of the affected cargo is generally decisive for calculating the liability limit. In the case of partial damage, the weight of the damaged or late-delivered packages is relevant. However, where the diminution in value also extends to other packages carried under the same air waybill, their weight may also be taken into account. In the case of delay, it is not the delay as such that is compensated but only the concretely proven financial loss, which is likewise subject to the statutory liability ceiling.

How can higher liability be achieved through a declaration of value?

The shipper may raise the statutory liability limit by making a special declaration of interest in delivery at the place of destination at the time of handing over the cargo to the air carrier. This requires the specification of a concrete amount and a timely declaration — that is, at the time of handover to the carrier; the carrier may in turn demand payment of a supplementary charge. In this case, the carrier is liable up to the amount of the declared interest, unless it proves that the declared amount exceeds the shipper's actual interest in delivery.

The declaration of value is particularly relevant where the potential damage could exceed the statutory liability limit. This may be the case for goods of high value or for consignments whose late or damaged arrival would cause significant economic disadvantage.

What role do the air waybill and freight documentation play?

Freight documentation is of considerable importance in the event of a dispute. The air waybill (AWB) serves as prima facie evidence of the conclusion of the contract of carriage, the acceptance of the cargo, and the agreed conditions of carriage.

Particular attention should be paid to the declaration of value in the AWB ("Declared Value for Carriage"). Where the entry "NVD" (No Value Declared) is made, the standard liability limit of 26 SDR per kilogram applies. If the shipper wishes to increase the carrier's liability through a declaration of value, this value must be entered as an amount in the AWB.

At the same time, the shipper bears responsibility for the accuracy of the information and documents it provides, particularly in connection with customs and official formalities. Incorrect or incomplete information may therefore give rise to the shipper's own liability risks.

What must be observed regarding damage notices and limitation periods?

In the case of damage in air cargo transport, particular care must be taken with notice and limitation periods, as failure to comply can result in significant legal disadvantages. Under Art. 31 MC, damage to cargo must be notified in writing, promptly upon discovery, and no later than 14 days from receipt of the goods. For delay damages, the period is 21 days from the date on which the cargo was placed at the disposal of the consignee. The notice must be in writing; for evidentiary purposes, it should describe the damage as specifically as possible and be transmitted in a verifiable manner.

If notice of damage is not given within the prescribed period, an action against the air carrier is generally barred, unless fraud is involved. Distinct from the notice obligation is the limitation period under Art. 35 MC: the right to damages is extinguished if an action is not brought within two years. The starting point depends on the circumstances — the date of arrival at the destination, the date the aircraft should have arrived, or the date on which the carriage was interrupted. This period is a substantive limitation period (Ausschlussfrist), not a prescriptive period. In practice, this means that damages must not only be documented and notified without delay but that legal proceedings must also be assessed and initiated in a timely manner.

Which court has jurisdiction for cargo claims?

Actions for damages arising from the transport of goods may, pursuant to Art. 33(1) MC, be brought in the territory of a State Party, at the option of the claimant, before the court of:

• the place where the air carrier is domiciled;
• the place of its principal place of business;
• the place of business through which the contract was made; or
• the place of destination of the carriage.

The fifth jurisdiction at the domicile of the passenger (Art. 33(2) MC), created additionally for personal injury claims, does not apply to cargo claims.

What does this mean in practice for shippers, consignees, and cargo insurers?

For shippers and consignees, immediate preservation of evidence is paramount. Upon delivery, packaging, condition, weight, shortages, temperature deviations, and externally visible damage should be documented without delay. In addition, the air waybill, handover protocols, correspondence, invoices, and other damage-related documents should be secured. It should also be assessed at an early stage whether the carrier's statutory liability limit covers the actual value of the goods or whether a declaration of value or supplementary cargo insurance is required.

For cargo insurers, the liability regime is particularly significant in the context of subrogation. Where the insurer indemnifies its policyholder, the question typically arises as to whether and to what extent recourse against the air carrier is possible. In this regard, the liability requirements under the 1999 Montreal Convention, the statutory liability limits, possible grounds for exoneration, and the notice and limitation periods must be carefully observed. Failure to comply with time limits or inadequate damage documentation can significantly impede or entirely preclude subrogation claims.

What applies under Turkish Law?

Turkey ratified the 1999 Montreal Convention on 14 April 2009 (see our article "The Montreal Convention at a Glance"). The Convention therefore applies in full to international carriage by air to and from Turkey, including cargo transport liability under Art. 18 et seq. MC.

Domestic Air Freight

For domestic air freight within Turkey, Art. 106 of the Turkish Civil Aviation Act No. 2920 (Türk Sivil Havacılık Kanunu) refers to the provisions of international conventions. The liability limits of Art. 22(3) MC therefore also apply to domestic Turkish air freight.

Enforcement and Jurisdiction

Actions arising from cargo transport damage on flights with a connection to Turkey may, under Art. 33 MC, be brought before Turkish courts, in particular where the place of destination or the principal place of business of the air carrier is located in Turkey. In practice, the enforcement of cargo claims before Turkish courts is well established; liability amounts are calculated in Turkish Lira (TRY) on the basis of the SDR exchange rate on the date of the judgment or payment.

Legal Advice on Air Freight Liability

For individual legal advice on the liability of the air carrier in goods transport, the Montreal Convention, and declarations of value, please contact our law firm directly. We advise air carriers, freight forwarders, shippers, consignees, and insurers on all aspects of air freight law.

Do you have a different concern in the field of aviation law? Find out more about our aviation law service portfolio.