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CHINA LAUNCHES NVOCC FREIGHT FILING RULES/
PRELIMINARY APPROVAL OF
ADDITIONAL U.S. AIR CARGO LITIGATION
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CHINA LAUNCHES NVOCC FREIGHT FILING RULES
On September 19, 2010, Ministry of Transport of the PRC launched NVOCC freight filing
rules referred as Circular No. 40 in 2010 on the Implementing Rules for NVOCC Freight Filing. The Implementing Rules will take effect on October 1, 2010 with a sixty days grace period.
The Implementing Rules require the Chinese legal entities with NVOCC licenses and
foreign NVOCCs who are licensed for NVOCC business at the Chinese port to file freight rates with the Shanghai Shipping Exchange. The Implementing Rules provide that NVOCCs shall file the range of ocean freight
(i.e. maximum rates and minimum rates quoted to the public) of exported containerized goods carried from China’s ports to foreign base ports.
Pursuant to the Rules, an NVOCC must charge “normal and reasonable” freight rates, and
any cargo soliciting with rates which are non-compensatory (zero or negative spread from the buying rate) is prohibited. Therefore, one of the requirements is that the range to be filed to qualify as “normal and
reasonable” must be higher than the negotiated rates concluded with liner companies.
If an NVOCC fails to follow the filing formalities or apply the freight rates as filed,
the NVOCC shall be required to rectify these violations within a certain time limit and is subject to a fine of no less than RMB20,000 (approximately $3,000) but no more than RMB100,000 (approximately $15,000) shall
be imposed concurrently; if the filed freight rates go beyond the normal and reasonable scope, or are lower than the negotiated rates level concluded with liner operators, or seriously deviate from the average level
of the filed rates by the same scale offering the same service that may impair the market fair competition, the Ministry of Transport will conduct a cumbersome and detailed investigation and penalties may be imposed.
PRELIMINARY APPROVAL OF ADDITIONAL U.S. AIR CARGO LITIGATION
The Court has now given its preliminary approval to the Air France-KLM, JAL, and
American settlement agreements, which is the first significant step towards submission and ultimate payment of claims from these funds. The Court and the parties to the agreements are now awaiting the
provision of customer lists from various airline defendants in the air cargo antitrust litigation; once the customer lists have been provided, notices of the three proposed settlements will be mailed to potential
claimants (those whose names appear on the lists), much as they were in connection with the Lufthansa Settlement Fund. Notice of the settlements will also be published in various industry publications.
Following issuance and publication of the notices, the Court will schedule a Fairness
Hearing. It will issue its final approval of the settlement agreements, with any changes resulting from the Fairness Hearing, shortly thereafter, and the process of filing claims against the three new settlement
funds will begin. We expect the process of filing claims against the three new funds to begin within the first or second quarter of next year. Potential claimants should begin the process now of
identifying and preserving all relevant records.
Air France, KLM, and Martinair (collectively, “Air France-KLM”) have reached an $87 million settlement in the air cargo antitrust litigation presently pending in the U.S. District
Court for the Eastern District of New York. This settlement is in addition to the $85 million settlement that has already been reached with Lufthansa. SAS also announced on September 10th that it has reached a $13.9 million settlement in the U.S. air cargo litigation; this latest settlement brings the total settlement amounts reached in this litigation to date to almost $203 million. We expect that its terms will be identical to those of the Air France, JAL, and
American settlements.
The $87 million Air France-KLM Settlement Fund will be available to satisfy claims for
those who directly purchased airfreight shipping services to, from, or within the United States from January 1, 2000 through September 11, 2006.
Claimants need only have purchased airfreight shipping services to, from or within the United States from any defendant named in the U.S. air cargo antitrust litigation; these defendants include such air carriers as British Airways, Alitalia, Air Canada, Air France, SAS, El Al, and Quantas. However, only those who purchased such airfreight shipping services directly from the air carrier defendants are eligible to file claims against the Air France/KLM Settlement Fund; unlike the Lufthansa Settlement Fund, indirect purchasers are not included.
Air freight forwarders are generally direct purchasers.
In addition to the Air France-KLM settlement, two smaller, additional settlements have
been reached in the U.S. air cargo antitrust litigation as well – a $12 million settlement
with Japan Airlines International Co., Ltd. (“JAL”), and a $5 million settlement with AMR Corp. and American Airlines, Inc. Like the Air France-KLM Settlement Fund, the JAL and American Settlement Funds will
be available to satisfy claims for those who directly purchased airfreight shipping services from any defendant named in the U.S. air cargo antitrust litigation to, from, or within the United States from January 1, 2000 through
September 11, 2006.
Rodriguez O’Donnell has substantial experience in filing these types of claims; we also
have established relationships with the claims administrator that will be handling these settlement funds. We would be happy to assist you in filing claims against these and any other settlement funds
established in the future.
Contact: Carlos Rodriguez rodriguez@rorlaw.com; Tom O'Donnell todonnell@chicago.rorlaw.com;
Henry Gonzalez gonzalez@rorlaw.com; Kevin Williams kwilliams@chicago.rorlaw.com
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