MC99 - Revision of limits of liability
MC99 - Revision of limits of liability
To Whom It May Concern,
The Convention for the Unification of Certain Rules for International Carriage by Air, done at Montréal on 28 May 1999 (commonly known as the Montreal Convention of 1999 or MC99) establishes in Article 22 the liability limit of the air carrier for damages in relation to the carriage of cargo. The liability limit is expressed in Special Drawing Rights (SDRs), a unit of currency whose value is set by the International Monetary Fund. Today the MC99 liability limit for cargo is 22 SDR per kilo.
As many of you are aware, MC99 provides in Article 24 (Review of Limits) a built-in mechanism, sometimes referred to as the escalator clause, which sets out the process for a review and revision of liability limits by the ICAO Council every 5 years. ICAO basis its decision to increase the liability limit on a consumer price inflation-index; As a result of the above review and calculations, the inflation factor for the relevant review cycle has been determined to exceed 10 percent, the threshold stipulated in the Convention for triggering an adjustment of the limits of liability. The determined inflation factor is 17.9 per cent. As a consequence, the limits of liability would need to be adjusted and proposed an increase from 22 SDR per kilo to 26 SDR per kilo.
Member States have until September 30, 2024 to disapprove of the liability limit increase, however, it is fully expected that that a majority of Member States will not object to the increase and the new limit will be declared effective as of December 28, 2024.
Accordingly, the CSC advises that:
- Carriers are advised to notify their shippers, cargo agents/forwarders, insurers, and claims departments of the increased liability limit from 22 SDR per kilo to 26 SDR per kilo for carriage of cargo governed by MC99 taking place on or after December 28, 2024; and
- As authorized by footnote 1 of Resolution 600b (Conditions of Contract on Reverse Side of the Air Waybill) IATA Secretariat has now made the corresponding editorial change to Resolution 600b as attached with the effective date 28 December 2024. Carriers are cautioned to take all necessary and appropriate advisory action, particularly if using air waybill stock reflecting the prior liability limit, to notify their shippers, cargo agents/forwarders, insurers, and claims departments of the increased liability limit from 22 SDR per kilo to 26 SDR per kilo for carriage of cargo governed by MC99 taking place on or after December 28, 2024. To give carriers the ability to properly manage their AWB stock, a 6-month grace period after December 28, 2024. The corresponding changes to Resolution 600b will then take effect on June 28, 2025.
A corresponding change is also being made to Resolution 600i, Resolution 672 and Recommended Practice 1679 have been updated to reflect the same change.
International Air Transport Association (IATA)
