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Bangladeshi cabinet's approval of legislation to bring about ratification of MC99: A positive step but one with potential pitfalls

On 26 August 2019, the Bangladeshi Cabinet of Ministers approved, in principle, legislation that would ratify the Montreal Convention 1999 (MC99) and bring Bangladesh into the fold with the other 136 states that have ratified MC99.

Context of MC99 in Bangladesh

The underlying motivation for the cabinet's approval is to ensure the rights and security of Bangladeshi passengers who travel to international destinations.

It seems to stem from the aftermath of the 2018 US Bangla loss, which resulted in more than 30 Bangladeshi passengers' death or injury

Civil aviation accidents in Bangladesh currently are governed by the Warsaw Convention 1929 as amended by the Hague Protocol 1955 (Amended Warsaw Convention) despite Bangladesh having signed, but not ratified, MC99 in May 1999.

Under the Amended Warsaw Convention, death or bodily injury claims are subject to a breakable limit of 250,000 francs, which is usually interpreted in Bangladesh as US$25,000.

Accordingly, the ratification of MC99, which does not prescribe any limits of liability for death or bodily injury, is a radical change for travellers, in particular, Bangladeshi passengers on round-trip tickets to international destinations.

Potential pitfalls in Bangladesh's interpretation

However, the available reports on the terms of the underlying ratifying legislation, the Civil Aviation (Montreal Convention 1999) Act 2019, suggests a cause for concern in relation to the interpretation and implementation of the MC99 terms.

Under article 21 of MC99, a threshold of 113,100 Special Drawing Rights (SDR), equivalent to ca.US$160,000, is provided such that the carrier may not rely on any defences for claims relating to death/bodily injury up to that threshold.

For any claim above the threshold, limited defences are available to the carrier. Notwithstanding the above, the quantum of any death or bodily injury claim is subject to the claimant being able to prove his/her loss in accordance with the applicable law.

Unfortunately, it appears from reports in the media that the Bangladeshi legislators have misunderstood the operation of article 21 of MC99 and have applied the SDR113,100 threshold as a minimum level compensation for death claims.

In other words, the compensation for a death claim resulting from international air carriage would automatically be SDR113,100 / US$160,000. 

Misunderstandings elsewhere

Sadly, this misapprehension of the application of article 21 of MC99 is not uncommon.

Similar misinterpretations have been noted in publications issued by the Civil Aviation Authority of Nepal post implementation of MC99 there.

Similar has occurred in legal proceedings in India but, happily, the Court of Appeal in Kerala has rejected the minimum level of compensation argument.

This position is further complicated by rumours that the legislation will impose penalties on any carrier failing to pay the levels of compensation set by the Civil Aviation (Montreal Convention 1999) Act 2019. 

It is alleged that these will be a maximum of 10 years' imprisonment or a fine of BDT100 crore / US$11.8 million.

Looking ahead

The final draft of the Civil Aviation (Montreal Convention 1999) Act 2019 has yet to be made public though it will pass into law when it is published in the Bangladeshi Gazette.

The exact date of the act's enactment remains pending but it is to be hoped that the concerns highlighted in this article are addressed before the legislation is passed.

For further information on this topic, please contact the authors of this article:

Keith Richardson
Partner, Singapore
D +65 6411 5302 | M +65 8333 4105
E keith.richardson@hfw.com

Jason Ow
Associate, Singapore
D +65 6411 5349 | M +65 9088 0198
jason.ow@hfw.com

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