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November Jurisdictional Update – Uruguay

Update provided by Gonzalo Yelpo with Yelpo & Facal:

The jurisdictional update concerns the handling of cargo claims. The issue arose when an insurance company was making a claim on behalf of its client. In the legend, with the declared value of the cargo, there was a statement that said “Max Free”. The claimant was an insurance company claiming on behalf of its client, and they argued that the term “Max Free” meant that there was no limit of liability on damages to cargo. They won the case and got an award of full claim.

The award was reversed on appeal using a precedent from a 1974 case, Eddie Dassin, Inc. vs. Eastern Airlines. This case analyzed the term “Max Free” in the airway bill and determined that the limitation of liability applies in all cases. Therefore, there is a maximum liability that airlines will have to pay out for a loss. If cargo customers want additional liability, they must pay for additional coverage. This is a big win for cargo airline companies.

On the regulatory side, we are working with the civil aviation authority on several regulation changes. They recently came out with a regulation on the filing of airfares. They are asking for additional information to be filed on each fare they have on every route, which is a tremendous amount of work for the airlines with little return, as most people will not look at the information being provided. We are trying to convince them that all the airlines filed their fares already under the current regulations, and these fares are available with a certain standardized format, so we are encouraging them to use what is already in place instead of reinventing the wheel and requiring the airlines to take on this additional work.

More troubling is the fact that the civil aviation authority of Uruguay is talking with other similar aviation authorities in the region, so if we don’t convince them to retract this regulation, we might have the same problem in the other South American jurisdictions.

- November 2022

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