Montreal Convention raises compensation for accidents involving international flights

Kathmandu, August 24

The Parliament, on Thursday, ratified the Convention for the Unification of Certain Rules for International Carriage by Air, popularly known as Montreal Convention 1999, raising compensation for international air accidents.

The new convention has ensured minimum compensation/liability of 113,100 Special Drawing Rights (SDR) — an international reserve asset created by International Monetary Fund (IMF) for accidents involving international flights, which is equivalent to $158,565 per air passenger.

As per today’s exchange rate of Rs 112.49 per $1, the given compensation amount would be equivalent to over Rs 17.84 million.

As per the Montreal Convention, the carrier is liable for damage sustained in case of death and injury of passengers on condition that the accident took place onboard or in the course of embarking and disembarking the aircraft.

At present, the insurance coverage of passengers in the international sector is just $20,000 per passenger. As a result of delay in ratification of the Montreal Convention, the insurance coverage of Nepali passengers had remained low.

The Hague Protocol in 1955 had fixed the insurance coverage of passengers at $20,000 and Nepal is a party nation of the Hague Protocol. Prior to that, the Warsaw Convention had fixed insurance coverage at $10,000 for every passenger in 1929.

Meanwhile, in carriage of baggage, liability of the carrier in the case of destruction, loss, damage or delay is limited to 1,000 SDR and 17 SDR per kg in destruction, loss, damage or delay of cargo, as per provision of Montreal Convention.