ICAO raises third party compensation in air accidents to $4.5 billion

India along with 93 other countries and 16 international organisations earlier this month adopted two international conventions setting liability rules for paying up to $4.5 billion as third party compensation in the event of accidents.

The International Civil Aviation Organisations (ICAO) adopted two new air law conventions setting out international compensation and liability rules for damage caused by aircraft to third parties at a diplomatic conference hosted by it from 20 April to 2 May.

The conference also adopted the proposal for the creation of a new instrument called the International Civil Aviation Compensation Fund, which may potentially provide victims of an event up to an amount of 3 billion Special Drawing Rights (approximately $4.5 billion) as compensation in addition to that paid by the aircraft operator.

The Convention on Compensation for Damage to Third Parties is meant to compensate third parties for damages suffered from acts of unlawful interference Involving aircraft.

The other instrument, the Convention on Compensation for Damage Caused by Aircraft to Third Parties, updates the current legal framework provided for under the 1952 Rome Convention and related protocol of 1978. It covers cases of damage caused by aircraft as a result of safety related matters and not involving an act of unlawful interference and provides for full compensation of victims.

The fight against the effects of terrorism and the improvement of the status of victims in the event of damage to third parties that may result either from acts of unlawful interference involving aircraft or caused by ordinary operation of aircraft, forms the cornerstone of the two conventions. The objective of these conventions is to ensure equitable benefits for victims while not unduly increasing the economic and regulatory burden on carriers.

Some 400 participants from 94 states and 16 international organisations attended the diplomatic conference. The Indian delegation was led by M Madhavan Nambiar, secretary, ministry of civil aviation, and Nasim Zaidi, director-general, DGCA.