The Carriage by Air (Amendment) Bill, 2007

Highlights of the Bill

• The Carriage by Air (Amendment) Bill, 2007 seeks to amend the Carriage by Air Act, 1972 that governs the rules for international carriage by air. The Bill proposes to update India’s legal regime by ratifying the Montreal Convention.

• The Bill introduces a two-tiered compensation regime for death or injury to passengers. If the accident is the fault of the carrier, then it has an unlimited liability. Otherwise, the carrier’s liability is limited to 100,000 Special Drawing Rights or SDRs (around Rs 63 lakh at the current conversion rate), which is triple the limit under the earlier convention.

• The Montreal Convention allows the plaintiff the option of jurisdiction in the country of primary residence of the passenger, in addition to the primary location of business of the carrier or the destination of the flight.

• In case of death or bodily injury of the passenger, the Bill provides for advance payment by the carrier to the passenger or passenger’s family to address immediate economic needs without lengthy litigation.

• The Bill changes the system for compensation of lost or damaged baggage. Under the Warsaw Convention, it was a weight-based system. The Montreal Convention changes it to a maximum of SDR 1,000 (about Rs 63,000).

Key Issues and Analysis

• The Bill only applies to international carriage by air. It permits the central government to notify similar provisions to domestic flights too. Under the current Act, the compensation levels notified by the government for domestic flights are significantly lower than for international ones.

• The Montreal Convention covers any journey where the origin and destination are in a signatory country if there is a stop-over in another country. This implies, for example, that a US-India-US ticket is covered while an India-US-India one is not covered until India ratifies the Convention.

• Some countries have ratified this convention with amendments to exclude specific carriers from the rules of the Convention.

• According to the International Civil Aviation Organisation, 78 countries have ratified and enforced the Montreal Convention, including the United States, the European Union, Canada, Japan, and China.