World of Art nc. v. Koninklijke Luchtraart Maatschappij N.V.

In Carriage of Goods by Air on (Updated )

This was an application for summary judgment for the loss of cargo to be carried by air from Iran. The loss apparently occurred because the goods were rerouted through the United States where they were seized by U.S. Customs. The Defendant air carrier was aware of this possibility as a similar incident had occurred previously. As a result, its systems were set up so that a warning would appear automatically on its computer system warning its employees not to route or reroute goods emanating from Iran through the United States. This warning would only appear, however, if the place of origin was accurately stated as being Iran. In this instance that did not occur. The goods were stated as originating in Amsterdam and were rerouted through the United States. This error was noticed by an employee of the Defendant who sent a message to his counterpart in Amsterdam but that message was not acted upon. The Court held that these facts created a strong prima facie case that there had been acts or omissions on the part of the Defendant "done with intent to cause damage or recklessly and with knowledge that damage would probably result". The Defendant filed an affidavit on the application as to the systems of the Defendant but that affidavit did not explain how the various errors that led to the rerouting had occurred. The Court drew an adverse inference from the failure of the Defendant to explain how the errors occurred. In the result, the Defendant was not entitled to limit its liability.