Legal overview of China’s international air freight industry

The Montreal Convention is an international air carriage convention introduced by the International Civil Aviation Organization in 1999, which took effect in China (and Macau) on 31 July 2005, automatically superceding its predecessor the Warsaw Convention. The Hong Kong SAR government also became a signatory on 15 December 2006. The convention governs only international carriage in which of the points of both departure and destination, with or without a break in carriage or a trans-shipment, are situated either within the territories of two party states, or within the territory of a single party state if there is an agreed stopping place within the territory of another state, even if that state is not a party state.

Under Article 142(2) of the PRC General Principles of Civil Law, any inconsistencies between international treaties to which China is a party and the Chinese civil law should be resolved in favour of the international treaties. The Montreal Convention is therefore the governing law relating to international air carriage of goods in China.

Application of the convention

In practice, the Montreal Convention has been applied only a handful of times by Chinese courts. One of these was in the case of Geologistics v. Societe Air France and others. Geologistics is a logistics service provider. In September 2005, it was commissioned by engine-maker General Electric to transport an aircraft engine from London to Shanghai. It hired Air France to transport the goods. The master air waybill listed the consignor as Geologistics and the consignee as a Shanghai-based logistics service provider named Donghuan. The house air waybill listed the consignor as General Electric and the consignee as China Eastern Airlines. The terms on the back of both air waybills stipulated that the Warsaw Convention applied.

A first instance court in Shanghai held that the party states involved in the performance of the contract under both the Warsaw and Montreal conventions were China and Britain, while Article 55 of the Montreal Convention provided that that treaty should be applied to the transaction (notwithstanding that the air waybills specified the Warsaw Convention as the operative treaty).

Chen Weidong is a senior partner and Pan Rui is a lawyer in the Shanghai office of Dacheng Law Offices

Dacheng Law Offices LLP, Shanghai

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