Air India Flight Crash At Ahmedabad : Law On Victim Compensation Explained

The tragic crash of an Air India plane, Boeing 787 Dreamliner, just minutes after takeoff from Ahmedabad airport last week, has claimed more than 260 lives. It has caused collateral damage to the lives of young medical students as the plane crashed into the B.J. Medical College Hostel's mess. It has also caused damage to the properties nearby. This event has reportedly triggered what could be India's largest aviation liability, exceeding 1,000 crores.In this article, we understand what kinds of liability arise because of this plane crash, and under which law.What is the law that governs the present air crash? The Air India plane was London-bound, which means it was an international flight. Therefore, the liability would be covered under an International Convention. In this case, the damage caused to the passengers will be governed under the Montreal Convention, 1999 (officially known as the 'Convention for the Unification of Certain Rules for International Carriage by Air').The Montreal Convention under Article 1, clause 2 defines international carriage as a carriage in which the place of departure and the place of destination are situated in the territories of two States Parties. India ratified the Montreal Convention in 2009, and to its effect enacted the Carriage by Air (Amendment) Act, 2009. Apart from this, the tort law will also apply.What are the types of liability that could arise?In this case, the liability could be generally categorised in three parts: the liability of passengers dead and injured, the liability arising due to fatalities on the ground and the collateral damage (since the plane crashed in the medical college) and the damage caused to the aircraft.Under the Montreal Convention, the liability is limited to 'persons, baggage, and cargo'. It will not cover the liability that will arise due to the fatalities on the ground and any other liability.As per Article 17 of the Montreal Convention, the carrier (Air India) would be liable for damage sustained in the case of death or bodily injury to a passenger in an aircraft. But this is only if the accident took place on board the aircraft or in the case of any of the operations of embarking or disembarking. It is read with Article 21, which specifies the amount of compensation paid in this case.Any other liability would potentially be covered under tort law and domestic law, if any. Whereas, the damage caused to the aircraft, known as hull loss, is usually covered under Air India's hull-risk insurance, if any. Reportedly, the estimated cost of the aircraft insured was between Rs. 1,040 crore to Rs. 1,450 crores during acquisition.Calculation of liabilityFor the death of passengers Under the Montreal Convention, Air India's liability for the death of the passengers would be calculated as per the '100,000 Special Drawing Rights' (SDR) specified under Article 21. This is strict liability, and Air India is bound to pay the compensation even without there being a requirement to prove negligence. It should be noted that strict liability under the tort laws has exceptions, including third-party negligence (Article 21(2), Montreal Convention).Another point is that the Convention makes no distinction in terms of liability between the dead and those who suffered bodily injury. This is relevant to state because in the present case, a British citizen has survived.SDR is basically an international reserve asset created by the International Monetary Fund, used to make global payments fair. The IMF sets the value of 1 SDR based on the basket of 5 major currencies: US Dollars, Euro, Chinese Yuan, Japanese Yen and British Pound.The value of 1 SDR depends on the daily exchange rate of each currency, calculated as a percentage, with the highest being the US dollar. It is then converted into any local currency after a local court decides the liability. The SDR value is then converted as per the nationality of the passenger and the currency in use by that country.Article 24 provides that the SDR amounts are reviewed and adjusted every 5 years for inflation. Thereafter, the current SDR amount as updated by the International Civil Aviation Organisation in October 2024 stands at 1,28,821 to 151,880.Since '1 SDR' amounts to approximately Rs. 120, the per passenger liability drawn by Air India would be: 1, 28 821 x Rs 120= 1.54 crores, and it could extend to Rs. 1.82 crores.If negligence is proved, additional compensation may also arise. Also, if the passengers had insurance, this would trigger an insurance claim as well. It should be noted that the carrier can make advance payments, if required by its national law, to meet the immediate economic needs of such persons, such as the family members of the deceased. But such an advance payment shall not constitute a recognition of liability and may be offset against any amounts subsequently paid as damages by the carrier (Article 28 of the Montreal Convention).The announcement by TATA Group to provide Rs.1 crore...

Air India Flight Crash At Ahmedabad : Law On Victim Compensation Explained

Gursimran Kaur Bakshi

This article explains what kinds of liability arise because of this plane crash, and under which law.

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Gursimran Kaur Bakshi

Air India Flight Crash At Ahmedabad : Law On Victim Compensation Explained

Gursimran Kaur Bakshi

This article explains what kinds of liability arise because of this plane crash, and under which law.

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

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Gursimran Kaur Bakshi

This is a premium content
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