AXA XL is suing Nippon Express USA for $8.4 million, claiming a shipment of Kyndryl servers was damaged during an international flight from New York to Japan.
Filed on August 8, 2025, in the Southern District of New York, the complaint comes from AXA XL Insurance Company, acting as subrogee for Kyndryl Japan KK and Kyndryl, Inc. The insurer says it paid out for the loss and now wants Nippon Express USA, the air carrier, to take responsibility for the alleged in-transit damage. The shipment at the heart of this dispute consisted of IBM server computers, which left New York on August 5, 2023, headed for a Kyndryl data center in Japan.
According to the complaint, Kyndryl, Inc. delivered the servers to Nippon Express USA at its 1 Vanderbilt Avenue office in New York. The shipment was supposed to travel by air from New York to Narita International Airport, with final delivery to Kyndryl Japan KK’s data center in Tochigi, Japan. The air waybills issued for the shipment - NEU-11970254, NEU-11969985, NEU-11970265, and master air waybill 406-602244962 - did not note any exceptions about the condition of the cargo. The complaint states that the servers were in “actual good order and condition” when handed over to the carrier.
AXA XL alleges that Nippon Express USA, as an air carrier subject to the Montreal Convention, accepted the shipment with the obligation to deliver it in the same condition as received. The insurer claims that all obligations owed to Nippon Express USA under the terms of the air waybill were performed, waived, or excused. However, AXA XL says the servers did not arrive in the same good order and condition, and that this failure to deliver as agreed is a breach of contract under the Montreal Convention.
The nature of the loss is described in the complaint as “in-transit damage,” with the total amount of damages claimed set at $8,401,486.86. The complaint does not provide details about how the damage occurred or the specific circumstances leading to the loss. There is no discussion of particular insurance policy clauses - AXA XL’s claim is based on the carrier’s obligations under the Montreal Convention and the contract of carriage.
This lawsuit is at the complaint stage, and the allegations are those of the plaintiffs. Nippon Express USA has not yet responded in court, and no findings of fact have been made. The outcome will depend on the carrier’s response and the court’s review of the evidence and applicable law.
For insurance professionals, this case is a clear example of the challenges that can arise in international cargo shipments, especially when high-value technology equipment is involved. It underscores the importance of understanding carrier liability, the terms of air waybills, and the protections offered by international conventions. The case also highlights the role of insurers like AXA XL in pursuing recovery when a loss occurs.
As the legal process unfolds, the industry will be watching to see how the court interprets the Montreal Convention in this context and what it means for future claims involving international air cargo. For now, the case stands as a reminder of the risks and responsibilities that come with moving valuable goods around the globe - and the critical part insurance plays when things don’t go as planned.
