Tuesday, March 23, 2010

Air Travel, International Airlines and Liabilities

(The following post comes to us from Sumit Agrawal, who is an alumnus of the National Law University, Jodhpur and associated with the Securities and Exchange Board of India (SEBI) as Legal Officer in its Integrated Surveillance Department. Views expressed herein are his own. Email: mailsumitagrawal@gmail.com)

Losing luggage on foreign land is a life-time experience, especially when you are about to start a journey to 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 consider yourself unlucky and the airline a deficient service provider.

In that situation, you will be reminded of a law called the Consumer Protection Act, 1986 which defines "deficiency" broadly as instances of fault, imperfection, or any inadequacy in services. In such cases, Consumer Disputes Redressal Fora and Commissions have the 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 the Carriage by Air (Amendment) Act, 2009, a newly passed law but hardly known to 'aam aadmi'.

It is interesting to note that India recently became 91st country to have ratified the Montreal Convention 1999 which does away with the archaic system of "compensating by weight" and adopts the more progressive, more consumer friendly and internationally recognized "compensate by passenger" system in cases of delayed, lost, damaged or destructed baggage. The Director General of Civil Aviation (India) had deposited with International Civil Aviation Organization (ICAO) on 1 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, entries 13 and 14 of Union List as provided under 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.” Quickly enough, the Carriage by Air (Amendment) Act, 2009, which incorporates the provisions of this Convention, came into force from 1 July, 2009. Under the Third Schedule to the Act, the liability of the carrier (airline) 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 up to such declared sum. SDRs are a currency conversion measure available on the website of International Monetary Fund (here and here), where 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 items, etc.

The new law also states 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. 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 to airlines irrespective of nationality of aircraft provided the airline 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 such an amendment, Parliament of India has not only brought Indian carriage law in line with international regime but has also imposed a sort of strict liability on airlines while 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 airlines trying to bring compensation to the absolutely insignificant sum.

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

- Sumit Agrawal


Shohit said...

Excellent that you shared this with everyone. Really helpful.

Raja said...

Very informative & useful article.