22 Mar 2010

Air Travel, International Airlines and Liabilities

This week we have an article from an expert in the law relating to carriage by Air and grievance redressal as he has experience of bringing this part of aviation law in practice/litigation. Mr. Sumit Agrawal, has penned his thoughts on the issue relating to liability of international airlines in India in as much as it relates to loss or destruction or delay of baggage by the concerned airline. The author in particular has taken up the task of enumerating the changes brought about in law last year by the amendment carried out in the Carriage by Air Act which deals with such issues. Rightly so, we have tagged this post as one of our series on Expert's Corner.

Air Travel, International Airlines and Liabilities
Sumit Agrawal

Losing luggage on foreign land is a life-time experience. Especially when you are about to start a journey for 3 countries and you are told by an airline that everything (from your shoes to fancy hat, digital camera to mobile charger) you packed to enjoy a 2-week tour is not available. One will wonder that with all sorts of baggage check-ins, bar-coding, scanning, baggage-tickets, and security exit-checks, how an airline could separate you from your bag. Believe it or not, you will call yourself in this situation unfortunately unlucky and that airline as deficient service provider.

In that situation, you will be reminded of a law called Consumer Protection Act, 1986 which defines "Deficiency" broadly as instances of faulty, imperfect, or any inadequacy in services. In such cases, Consumer Disputes Redressal Forums and Commissions have authority and jurisdiction to award compensation for delayed, lost or damaged baggage including legal costs, compensation for mental trauma and interest. There is another law, in such cases on which customers should fall back and that is Carriage by Air (Amendment) Act, 2009 a newly passed law but hardly known by 'aam aadmi'.

It is interesting to note that India recently had become 91st country to have ratified Montreal Convention 1999 which throws-out the archaic system of "compensating by weight" and adopted the more progressive, more consumer friendly and internationally recognized "compensate by passenger" system in cases of delayed, lost, damaged or destructed baggage. Director General of Civil Aviation (India) had deposited with International Civil Aviation Organization (ICAO) on 1st May 2009, the Instrument of Accession by India to the Convention for Unification of Certain Rules for International Carriage by Air done at Montreal.

Under Article 253, read with Entries 13 and 14 of Union List of Schedule VII to the Constitution of India, Parliament is competent to make a law for implementing “any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body.” In a quickly follow-up, the Carriage by Air (Amendment) Act, 2009 incorporating the provisions of this Convention come into force from 1st July, 2009. Under Schedule III, the liability of the carrier (airlines) in case of destruction, loss, damage or delay can go up to 1000 Special Drawing Rights (SDRs) for each passenger and in case the passenger has made special declaration of higher value at the time of check-in then the liability can go upto such declared sum. SDRs are a currency conversion measure available on the website of International Monetary Fund {have a look at these links [1] and [2]}, where currently 1 SDR values around Rs. 75. Hence, the airlines’ liability stands up to Rs. 75,000 per passenger for lost baggage if the values of items lost are within this limit and are allowed to be carried by law, say non-alcoholic, legitimate etc.

The new law also says that any provision tending to relieve the airlines of liability or to fix a lower limit than that which is laid down in statutory rules shall be null and void saving the contract itself. In terms of Rule 22, a court in addition to these limits can provide litigation costs and other expenses including interest. It is also interesting to note that this is applicable on airlines irrespective of nationality of aircraft provided the airline has a presence in India.

Until few years ago, Warsaw Convention was followed in India which provided for four choices of jurisdiction for filing of a claim by a passenger or his legal heirs under such cases, namely, (1) the place where the ticket was issued or the contract of carriage was made, (2) the principal place of business of the carrier, (3) the place of destination of the passenger, or (4) the place of the domicile of the carrier. But now, the Montreal Convention 1999 adds a fifth jurisdiction, i.e. the place of domicile of the passenger, provided the airlines has a presence there. Thus, this enables an Indian to file his claim in India even if the journey was undertaken outside India and ticket purchased outside India, provided the carrier has a presence in India.

Therefore, gone are the days when airlines could escape their obligations under the pretext of their kilo-based iron-clad legally drafted policy compensating 20 US dollars for a kilo or by including some other hidden conditions. By bringing the amendment, the Indian Parliament has not only brought Indian Carriage law in line with international regime but has also introduced a strict liability regime on airlines' dealing with customers belongings which they entrust to airlines with a duty to care.

Hopefully, the new law would act as a breather for harassed passengers from various tactics of high-headed airlines trying to bring compensation to the absolutely insignificant sum.

Parliament Has Done Its Duty, Now Let Airlines Do Theirs.

{The Author is an alumnus of National Law University, Jodhpur and associated with Securities and Exchange Board of India (SEBI) as Legal Officer in its Integrated Surveillance Department. Views expressed herein are his own. mailsumitagrawal [@] gmail [dot] com }


P.S.: Since the purpose of this piece is to make more and more people aware, Shri V Umakanth, Formerly Partner, Amarchand & Mangaldas & Suresh A Shroff & Co has also posted on the author's request, this piece on his blog indiacorplaw.blogspot.com .

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