KATHMANDU: Nepal deposited its instrument of accession to the Montreal Convention 1999 (MC99) at the International Civil Aviation Organisation (ICAO) that stipulates a nearly eight-fold increase in compensation for airline passenger death involving international flights to $158,565.
This works out to approximately Rs18.71 million at the current exchange rate ($1=Rs118). Nepali airlines operating on international routes provide a minimum of $20,000 in compensation in case of death of a passenger.
Government officials submitted their ratification instrument to ICAO in Montreal, Canada on October 16. “The MC99 will come into force in Nepal on December 15,” said Buddhi Sagar Lamichhane, joint secretary at the Ministry of Culture, Tourism and Civil Aviation. Nepal has become the 135th member to ratify the convention.
On August 23, Parliament ratified the Convention for the Unification of Certain Rules for International Carriage by Air, also known as MC99. The treaty had been gathering dust at the ministry since being passed by the Civil Aviation Authority in 2010. It took the crash of a passenger jet in Kathmandu last March and subsequent public outcry over the outdated compensation system to goad officials into action.
MC99 lays down higher compensation for accidents involving international flights than that prescribed by the Warsaw Convention. The convention imposes a minimum liability of 113,100 Special Drawing Rights (SDR), equivalent to $158,565 for each passenger, unless the airline proves that such damage was due not to its negligence or other wrongful act or omission.
The SDR is an international reserve asset, created by the International Monetary Fund in 1969 to supplement its member countries’ official reserves. Currently, Nepali airlines are governed by the Warsaw Convention drafted in 1929. The pact capped damages for injury or death at $8,300 per passenger. This was replaced by The Hague Protocol, a treaty signed on September 28, 1955 in The Hague, which amended the Warsaw Convention. The limit prescribed by the amendment is $20,000 per passenger.
The liability for delay is limited to 4,694 SDRs ($6,580.94) per passenger. A carrier’s liability for damage or loss of baggage is limited to 1,131 SDRs ($1,585.65) per passenger. The carrier’s liability limitation for cargo lost, damaged or delayed shall be 19 SDRs per kg ($26.63).
MC99 is a multilateral treaty adopted by a diplomatic meeting of ICAO member states in 1999. Nepal has not signed the convention even though the process was initiated in 2010.