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Parliament Passes Carriage by Air (Amendment) Bill, 2015
Mar 11, 2016

A bill that would enhance compensation for air travellers in case of death, injury, lost baggage or even inordinate delay in flights was passed by the Rajya Sabha.

The Carriage by Air (Amendment) Bill, 2015, was passed by the Upper House with changes. It was cleared by the Lok Sabha in December last year, but after changes it needs to be passed again by the Lok Sabha.

  • Once the legislation is implemented, Indian airlines would be required to pay compensation amount that is equivalent to the rates paid by their global counterparts.

  • It would bring legislative character to international character with respect to compensation for air passengers.

  • The legislation would allow the government to revise the liability limits of airlines in line with the Montreal Convention, which was acceded to by India in May 2009.

  • The Bill amends the Carriage by Air Act, 1972.

  • The Act regulates carriage by air and gives effect to the Warsaw Convention, 1929, the Warsaw Convention as amended by the Hague Protocol, 1955, and the Montreal Convention, 1999.

  • The Act also provides for application of the international rules to domestic travel, subject to exceptions and adaptations.

  • The Montreal Convention establishes airline liability in the case of death, injury or delay to passengers or in cases of delay, damage or loss of baggage and cargo.

  • The Convention also provides for reviewing the limits of liability of the air carriers every five years.

  • The Bill will amend the Act to adhere to the revised limits of liability.

  • The Bill will also seeks to empower the central government to revise the limits of liability for airlines and compensation as per the Montreal Convention.

  • It also provides for the central government to make rules to carry out provisions of the Act.

Montreal Convention

The Montreal Convention entered into force in 2003. 103 countries are now party to it, including all members of the European Union, the USA, China and Japan. Between State Parties, the Montreal Convention prevails over the unexpired Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air, 1929 (152 States Parties) and its additional protocols.

The main innovation of the Montreal Convention is an amendment to the conditions and amounts of air carrier liability. For instance, in the event of damage sustained in case of death or bodily injury of a passenger, the Montreal Convention establishes a so-called ‘two-tier’ system of liability:

1. For each passenger the carrier shall not be able to exclude or limit its liability for damages not exceeding 113,100 Special Drawing Rights (SDRs).

2. For each passenger the carrier may be liable for damages to the extent that they exceed 113,100 SDRs, unless the carrier proves that such damage was not due to its negligence or other wrongful act or omission, or such damage was solely due to the negligence or other wrongful act or omission of a third party.

In the case of destruction, loss of or damage to baggage, which includes both checked baggage and personal items of passengers in the cabin (unchecked baggage), the Montreal Convention limits the air carrier’s liability to 1,131 SDRs per passenger, regardless of the baggage weight.

The carrier is liable in the amount of up to 19 SDRs per kilogram for damage sustained in the event of the destruction or loss of or damage to cargo.

The innovations of the Montreal Convention also include the possibility of bringing an action against an air carrier for damages that occurred as a result of death or injury of a passenger before the national court of that passenger’s residence.

(*SDR=The currency value of the SDR is determined by summing the values in U.S. Dollars, based on market exchange rates, of a basket of major currencies (the U.S. Dollar, Euro, Japanese Yen, and Pound Sterling).


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