Winson Global
2026-07-27 12:12
Chinese courts, by integrating international conventions with domestic laws, fully upheld the insurer’s claims based on the right of subrogation, overruled all defenses raised by the freight forwarder, and standardized the adjudication criteria for disputes over loss or damage to goods arising from cross-border air carriage.
Samsung Communication purchased international commercial air cargo insurance from the Tianjin Branch of Samsung Property & Casualty Insurance (China) Co., Ltd., and its 22 consignments entrusted to freight forwarder Expeditors were completely lost en route from Tianjin to Miami via Incheon on May 10, 2015; the insurer paid the cargo owner USD 1,189,972.50 in accordance with the insurance contract to obtain the statutory right of subrogation, filed a claim against Expeditors that issued the house air waybill and joined actual carrier Korean Air Lines in the litigation, with settlement negotiations collapsing and the dispute proceeding to court.
Three core legal issues arise in this case. First concerns the legal nature of the two-year claim period stipulated under Article 35 of the Montreal Convention and whether China’s rules on the interruption of the limitation of actionapply in this case. The defendant Expeditors contended that the Convention only prescribes a two-year filing period without provisions for suspension or interruption, rendering it a statute of repose; it argued the claim was time-barred given the four-year gap between the 2015 incident and the 2019 filing, and the claimant’s right of action ought to lapse. Second is the applicable standard for the carrier’s liability cap for lost air cargo: the carrier advocated calculating damages based on the limit effective at the time of the loss, while the claimant insisted on adopting the updated limit in force at the close of oral argument. Third relates to liability allocation between the contracting carrier and the actual carrier under continuous international air carriage, specifically whether actual carrier Korean Air shall be jointly liable for the cargo loss.
The courts of first and second instances made respective rulings by referencing the Montreal Convention, the Civil Aviation Law and the Civil Code of China. On the limitation period issue, the court held the Convention stipulates that the calculation of the limitation period is governed by the lex fori. Under Chinese law, filing a lawsuit followed by withdrawal interrupts the limitation period; the claimant restarted the two-year limitation period by bringing claims in 2016 and 2018, so the 2019 filing fell within the statutory time limit, and the two-year window constitutes a limitation period rather than a fixed exclusionary period. For the liability limit, the Convention establishes a review mechanism to counter inflation, so damages were calculated at the prevailing standard of 22 Special Drawing Rights (SDR) per kilogram at the trial stage pursuant to equity principles without violating the non-retroactivity principle. As for carrier liability, Expeditors, as the contracting carrier issuing the house air waybill and controlling the entire carriage arrangement, bore primary compensation liability for the cargo loss, while no sufficient evidence proved independent fault on the part of the actual carrier. The appellate court ordered Expeditors to compensate the insurer RMB 890,192.16 for the cargo loss.
This is a landmark case concerning cross-border air carriage with clear judicial implications. It confirms that the two-year limitation period laid down by the Montreal Convention is subject to domestic rules on the interruption of limitation periods, unifies the application of law in air cargo disputes and delivers judicial precedents for analogous cases. The judgment safeguards the legitimate rights and interests of all parties in cross-border trade on an equal footing, and offers practical guidance for freight forwarders, aviation enterprises and insurance institutions to resolve cross-border cargo damage disputes.
