The subrogated underwriter of Asco Industries, N.V. (Asco) attempted to recover damages from American Airlines, Inc. for its loss of four crates of goods on a flight from Belgium to Tulsa, Oklahoma. American Airlines argued that the Warsaw Convention limited its liability to $20 per kilogram. It

cited Article 22(2) of the original Convention for the Unification of Certain Rules Relating to International Transportation by Air, October 12, 1929, 49 Stat. 3000 (1934), T.S. 876; 137 L.N.T.S. 11; as amended: by the Hague Protocol of 28 September 1955 [478 U.N.T.S. 371]; and by the Montreal Protocol No. 4 of 1975.

The insurance company claimed that American Airlines had failed to comply with Articles 9 of the Hague Protocol (no limitation on liability if particulars not stated on waybill) and 8(c) (agreed stopping places must be listed on waybill). American Airlines responded that, when the waybill was issued on March 9, 2001, both the U.S. and Belgium adhered to the Convention as amended by The Hague Protocol of 1955, and that Article VI of the Protocol deleted most of the "air consignment note" requirements, including the listing of "agreed stopping places." The Court thus has to decide whether, as of that date, the U.S. was a party to The Hague Protocol of 1955 which amended the original Warsaw Convention of 1929.

The district court held that the U.S. had in fact acceded to The Hague Protocol when it ratified Montreal Protocol No. 4 in 1998, and denied the insurer's motion for partial summary judgment. The Second Circuit reverses and remands; it holds that the U.S. did not become a party to The Hague Protocol until after the Senate had consented to the Protocol's ratification after the issuance of the present waybill.

In determining whether a particular international agreement is binding upon the U.S., the Court looks mainly at two factors: (1) whether the U.S. has consented to be bound by that agreement, and (2) whether that agreement, by its terms, has entered into force for the U.S. as of the date in question. An otherwise "self- executing" treaty becomes the law of the land only after the Senate has consented and the President has ratified it.

"The Vienna Convention on the Law of Treaties, May 23, 1969, 1155 U.N.T.S. 331 ..., which we rely upon 'as an authoritative guide to the customary international law of treaties,' ..., defines ratification as one of 'the international act[s] ... whereby a State establishes on the international plane its consent to be bound by a treaty,' 1155 U.N.T.S. at 333, art. 2(b) ..." Article 14 of the Vienna Convention provides in relevant part that: The consent of a State to be bound by a treaty is expressed by ratification when: (a) the treaty provides for such consent to be expressed by means of ratification; (b) it is otherwise established that the negotiating States were agreed that ratification should be required; (c) the representative of the State has signed the treaty subject to ratification; or (d) the intention of the State to sign the treaty subject to ratification appears from the full powers of its representative or was expressed during the negotiation. 1155 U.N.T.S. at 335-36."

The Court then explains further. "The ratification process, in whatever form it may take, ... serves several functions. First and foremost, 'it affords a state the chance to scrutinize closely the provisions of a complicated agreement' after signing it. ... In addition, in the time between signing and ratification, States are able, inter alia, (1) to effect changes in domestic law that may be necessary for the implementation of a treaty, (2) to seek and obtain the consent of legislative bodies as may be required, and (3) to re-examine the relevant provisions before committing to them. ..." [Slip op. 6-7]

Because a State is bound by a treaty only after ratification, the next issue is whether the U.S. has ratified a treaty, or otherwise acceded to its provisions and, if so, as of what date. In addition to the consent to be bound, a treaty must have entered into force to bind a State. " ... Article 28 of the Vienna Convention confirms that, '[u]nless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party.' 1155 U.N.T.S. at 339 ... Accordingly, we have recognized that, '[o]rdinarily, a particular treaty does not govern conduct that took place before the treaty entered into force.' ..."

"Upon ratification, an international agreement comes into force in accordance with its terms. ... In all cases, however, we will look to see whether a treaty ratified by the President of the United States has entered into force in order to determine whether that treaty is binding on the United States and, by its terms or pursuant to action of the Senate and the President, enforceable in our courts." [Slip op. 7-8]

Applying these principles to the international agreements at issue, it is undisputed that the U.S. had not explicitly ratified The Hague Protocol as of March 9, 2001. The question then becomes whether the U.S. had implicitly acceded to this Protocol through its 1998 ratification of the Montreal Protocol.

The language of the Montreal Protocol is the best evidence. "'[T]the Warsaw Convention as amended at The Hague, 1955, and by Protocol No. 4 of Montreal, 1975' is clearly defined in Article XV as constituting 'one single instrument.' Applying that definition to Article XVII(2), it appears that ratification of Montreal Protocol No. 4 'by [a] State which is not a Party to the Warsaw Convention as amended at The Hague [in] 1955, such as the United States, '[has] the effect of accession to' 'one single instrument,' namely, 'the Warsaw Convention as amended at The Hague, 1955, and by Protocol No. 4 of Montreal, 1975.' Therefore, according to the plain terms of the treaty, by ratifying Montreal Protocol No. 4, a State consents to be bound by one instrument consisting of the combination of three related treaties (and not by an additional instrument consisting of a combination of two related treaties - The Hague Protocol and Montreal Protocol No. 4)." [Slip op. 11]

Thus, according to the plain language of the Montreal Protocol, the U.S. did not consent to be bound to The Hague Protocol (as a separate treaty) through the ratification of the Montreal Protocol. Here, the Senate consented to The Hague Protocol's ratification on July 31, 2003. See S. Treaty Doc. No. 107-14 (2003). Thus, when the waybill was issued, the U.S. was not bound by that Protocol.

Citation: Avero Belgium Ins. v. American Airlines, Inc., 423 F.3d 73 (2d Cir. 2005).