The avoid damage or it was impossible for them

convened a special meeting in an effort to reach an agreement on an increased
liability limit for the Warsaw Convention and issued a call to this effect on 1st
Feb 1966. But, the limit of 1, 00,000 $ sought by the US proved unattainable
and a lesser limit of 75,000 $ coupled with absolute liability of the carrier
also failed to materialize.1
The main objection was that the consequent increase in insurance premium would
entail a raise in air fares. Finally, upon the settlement between IATA and US
Government, the majority of the IATA carriers agreed to raise their liability limits
upto 75,000 $ on the basis of absolute liability upto that limit. An agreement was
concluded between US Civil Aeronautics Board and IATA carriers which later came
to be known as Montreal Interim Agreement 1966.2The
agreement was a temporary solution to the impasse created by the American denunciation
of the Warsaw Convention. Under this interim agreement:

The maximum liability of the carrier was fixed at 75,000
$ or 58,000$ excluding legal fees and costs, in respect of US claimants;

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The carrier was deprived of the right to claim
liability limitation clause provided in Art 20(1) of the Warsaw Convention
where it was provided that the carrier was not liable if it and its servant had
taken all necessary measures to avoid damage or it was impossible for them to
take such measures;

Absolute liability was imposed on the carrier rather
than a presumption of liability under Art 17 of the Warsaw Convention; and

The carrier had to notify in writing the applicability
relating to the limitations of liability in the convention and in the agreement
at the time the ticket was issued

1 Robert
Boyle, ” The Guatemala City Protocol to the Warsaw Convention”, (California
Western International Journal) Vol. 6(1975-76),p.46

2 Wilham
Hildered, ‘Symposium on Warsaw Convention’, (Journal of Air and Commerce) , Vol 33(1963),p.525