Your goods were damaged in transit. You have the evidence, the photographs, and the surveyor's report. The airline's liability is clear. And then your lawyer tells you: the claim is gone. The time limit expired three weeks ago.
This happens. It happens because most traders and freight managers do not know that international air cargo liability is governed by a 1999 international treaty — the Montreal Convention — and that treaty imposes strict, unforgiving time limits that have nothing to do with the usual rules of contract law or the Limitation Acts they are accustomed to.
What the Montreal Convention is
The Convention for the Unification of Certain Rules for International Carriage by Air, signed in Montreal in 1999, replaced the earlier Warsaw Convention system and now governs most international air freight. Australia is a contracting state. If goods move by air between Australia and another contracting state — and almost all of Australia's major trading partners are contracting states — the Convention applies.
The Convention determines three things: the maximum compensation payable for lost or damaged cargo; the procedural requirements for making a claim; and the time limits within which claims must be brought. On all three, the Convention overrides your contract and your national law.
The liability limits
The Montreal Convention caps liability for cargo loss or damage at 22 Special Drawing Rights per kilogram. SDRs are the IMF's unit of account; at current rates, 22 SDRs translates to approximately AUD 43–46 per kilogram, depending on exchange rates. For low-value bulk cargo, this may be adequate. For high-value electronics, pharmaceuticals, or specialised equipment, it is not.
The limits can be broken if the claimant proves that the carrier acted with intent to cause damage, or recklessly and with knowledge that damage would probably result. In practice, this threshold is difficult to meet. The practical response is cargo insurance that covers the excess above the treaty limit.
The claim time limits
This is where traders most often lose their claims.
For damaged cargo: written notice must be given to the carrier within 14 days of the date of receipt of the cargo. If notice is not given within 14 days, no action will lie against the carrier — with one narrow exception for cases where fraud is established.
For delayed cargo: written notice must be given within 21 days of the date on which the cargo was placed at the disposal of the consignee.
For lost cargo: the action must be brought within two years of the date of arrival, or from the date the aircraft ought to have arrived, or from the date carriage stopped. This is the outer time limit for legal proceedings; the notice requirements for damage and delay are additional and earlier.
Notice for damage and delay must be in writing. An oral complaint or a phone call does not satisfy the requirement. The notice must be given to the carrier — not to the freight forwarder, not to the insurer, but to the airline.
What to do when goods arrive damaged
Inspect on receipt. Note any external damage on the delivery document before signing. Request a damage report from the airline or ground handler. Photograph everything.
Give written notice to the airline immediately — do not wait for a survey report, do not wait to quantify the loss. A short notice preserving your claim position can be sent within hours of discovering the damage, with a detailed claim to follow. The 14-day clock runs from receipt of the cargo, not from discovery of the damage.
Retain all documents: the air waybill, the commercial invoice, the packing list, the delivery receipt, the photographs, and all correspondence with the carrier.
Notify your cargo insurer as soon as possible. Your policy likely requires prompt notification as a condition of coverage.
The carrier's defences
The Montreal Convention allows the carrier to escape liability if it proves that the damage resulted from: the inherent defect, quality or vice of the cargo; defective packing performed by someone other than the carrier; an act of war or armed conflict; or an act of public authority carried out in connection with the entry, exit, or transit of the cargo.
These defences are narrower than they appear. A carrier cannot routinely invoke "inherent defect" without evidence specific to the cargo concerned.
Practical implications
If you move goods by air regularly, build the notice requirements into your receiving procedure. Whoever takes delivery of incoming air freight should be trained to inspect, note damage, and trigger the notification process within 24 hours — not within 14 days.
The detail on air cargo liability, the Montreal Convention's structure, notice periods and time limits, and its interaction with Australian domestic law is in Air Cargo Carriage: Law and Practice for Traders, Book 7 of the International Trade and Transport Law Library. The marine insurance volume — Book 3 — covers cargo insurance structures for air and sea freight. See the Library.