Parliament on Thursday ratified the Convention for the Unification of Certain Rules for International Carriage by Air, also known as the Montreal Convention 1999 (MC99), that stipulates higher compensation for accidents involving international flights.

The treaty had been gathering dust at the Civil Aviation Ministry since being passed by the Civil Aviation Authority of Nepal 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 It took the crash of a passenger jet in Kathmandu last March and subsequent public outcry over the outdated compensation system to goad officials into action.

Following endorsement by Parliament, the Nepal government has to deposit the ratification instrument with the International Civil Aviation Organisation (Icao) in Montreal, Canada.

“MC99 will come into force formally 60 days after the Nepal government registers or deposits the ratification instrument with Icao,” said Pramod Nepal, under-secretary at the Civil Aviation Ministry. “We are in the process of completing the task as soon as possible,” he said. “However, we have to enact a separate law based on MC99 for domestic carriers.”

Nepali domestic airlines have been opposing the government’s move to fix a uniform liability amount equal to international airlines.

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.

This works out to approximately Rs17.44 million at the current exchange rate ($1=Rs110), 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.

Currently, Nepali airlines operating on international routes provide a minimum of Rs2 million in compensation in case of death of a passenger. However, the compensation amount depends on the insurance policy of the particular airline.

The liability for delay is limited to 4,694 SDRs ($6,580.94) or Rs723,903 per passenger. A carrier’s liability for damage or loss of baggage is limited to 1,131 SDRs ($1,585.65) or Rs174,421 per passenger. The carrier’s liability limitation for cargo lost, damaged or delayed shall be 19 SDRs per kg ($26.63) or Rs2,929 per kg.

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.

The crash of Dhaka-based US-Bangla Airlines Flight BS211 at Tribhuvan International Airport in March brought to the fore the government’s glaring negligence in ratifying MC99, as a result of which the victims’ families lost out on millions in compensation and prompted officials to act. Neither Nepal nor Bangladesh has signed the convention.

PASSENGER PROTECTION

• Minimum liability of $158,565 for each passenger, or Rs17.44 million
• Liability for delay is limited to $6,580 or Rs723,903 per passenger
• Liability for damage or loss of baggage is $1,585 or Rs174,421 per passenger
• Liability limitation for cargo lost, damaged or delayed is $26.63 or Rs2,929 per kg