Montreal Convention and Air Carrier Liability Limits: A Practical Guide

What is the Montreal Convention and How It Protects Your Cargo

The 1999 Montreal Convention (MC99) is the primary international treaty governing air transport rules and establishing the limits of airline liability to shippers and consignees. For a logistics manager or procurement specialist dealing with imports to Kazakhstan from China, Europe, or the USA, understanding this convention is critical. It determines the amount you can recover from a carrier in the event of damage, loss, or delay of goods.

It is important to understand that air carrier liability is not unlimited. Unlike cargo insurance, where a payout can cover the full invoice value, compensation under the Montreal Convention is tied to the weight of the cargo and calculated in special units. KAZLOGIST.KZ specialists always remind clients that the Air Waybill (AWB) is issued in strict accordance with these international standards.

Liability Limits: Understanding SDR

Air carrier liability is measured in SDR (Special Drawing Rights). This is an artificial reserve and payment instrument, the rate of which is recalculated daily based on a basket of major currencies. According to the Montreal Convention, the liability limit for cargo damage or loss is 22 SDR per kilogram of gross weight.

How it works in practice:

• If you are transporting equipment weighing 100 kg with a value of $50,000, and it is completely lost, the carrier's liability limit will be 2200 SDR (22 SDR × 100 kg).
• The payout amount in dollars or tenge will depend on the current SDR exchange rate, but it will almost always be significantly lower than the actual value of high-end electronics or spare parts.
• The liability limit applies to the gross weight specified in the Air Waybill.

This is why when shipping high-value cargo through KAZLOGIST.KZ, we recommend considering additional protection mechanisms, such as a Declaration of Value (Valuation Charge) or separate insurance.

When the Carrier is Exempt from Liability

The Montreal Convention establishes the principle of strict liability; however, there are exceptions. The carrier is not obliged to compensate for damage if it proves that the damage to the cargo resulted from:

• Inherent vice of the goods: if the cargo deteriorated due to its own internal properties.
• Defective packaging: if the packaging was performed by the shipper and was inadequate for air transport.
• Acts of war or armed conflict: force majeure circumstances of a global scale.
• Acts of public authority: such as delays or damage during customs inspections or entry/exit procedures.

The KAZLOGIST.KZ team helps minimize these risks. We check packaging and documents (invoice, packing list) before departure to eliminate potential claims from airlines regarding improper cargo preparation.

Procedures Upon Discovering Damage

If you discover damage to the packaging or a shortage upon receiving the cargo at the destination airport (e.g., Almaty), you must act immediately. The deadlines for filing claims under the Montreal Convention are very strict:

• In case of cargo damage: a written claim must be filed immediately after discovery, but no later than 14 days from the date of receipt.
• In case of cargo delay: a claim must be filed within 21 days from the date the cargo was placed at the disposal of the recipient.
• In case of cargo loss: the period is calculated from the moment the cargo should have arrived.

The first step is to draw up a Cargo Damage Report (Commercial Act) directly at the airport terminal before the cargo leaves the customs control zone. Without this document, proving the airline's fault is virtually impossible. KAZLOGIST.KZ specialists support the cargo release process and help document all discrepancies.

If you are planning a shipment and would like to receive a calculation of air freight costs, taking into account all the nuances of liability and documentation, contact KAZLOGIST.KZ managers for a precise quote.