Montreal Convention to decide final compensation for Air India crash victims' kin. What it says

The Print

13-06-2025

The Tata Group, the owner of Air India, has announced a Rs 1 crore compensation for the family of every person who died in the crash, along with the coverage of medical expenses for the injured while ensuring they receive the necessary care and support.
The flight, a Boeing 787-8 Dreamliner, crashed shortly after taking off from Sardar Vallabhbhai Patel International Airport in Ahmedabad's Meghaninagar. A total of 242 people, including two pilots and 10 crew members, were on the flight bound for Gatwick Airport, London.
New Delhi: Soon after the crash of Air India Flight 171 flying from Ahmedabad to London Thursday, the Tata Group announced compensation for the families of victims, but the Montreal Convention 1999 may likely decide the final compensatory relief for them.
However, experts point out that the final compensation is subject to the framework of the Montreal Convention. The Convention for Unification of Certain Rules for International Carriage by Air—commonly known as the Montreal Convention—was adopted at a diplomatic meeting in Montreal, Canada, on 28 May 1999.
'In light of the recent Air India crash, the airline has announced an interim ex gratia compensation of Rs one crore to the families of the deceased. However, final compensation is subject to the convention's framework. This announcement seems to be in line with the right of the passengers/injured to interim compensation under Article 28 of the convention,' Ishwar Ahuja, a partner at law firm Saga Legal, told ThePrint.
What does this convention say about compensation, and how does it apply to the Ahmedabad Air India crash? ThePrint explains.
Convention: Who does it apply to
The Montreal Convention applies to all international carriage of people, baggage, or cargo in an aircraft.
In 2009, India became the 91st country to ratify the convention. A PIB release, at the time, said the Director General of Civil Aviation (India) deposited the 'Instrument of Accession' to the International Civil Aviation Organisation.
The convention has been incorporated into the Carriage by Air (Amendment) Act 2009 in India.
Post-ratification of the Montreal Convention in 2009, Ahuja explained, the Carriage by Air Act 1972 was amended in 2009, incorporating Section 4A and Schedule III, bringing the liability regime of the convention into the domestic law in India.
London-based international law and governance expert Dharminder Singh Kaleka, talking about who the convention applied to, said, 'What matters is whether the flight was international and whether the countries involved, departure, destination, or residence, are parties to the convention. Once they meet those criteria, all passengers are entitled to the same protections and compensation limits, regardless of their citizenship.'
The AI aircraft had 169 Indian nationals, 53 British nationals, seven Portuguese nationals, and one Canadian national on board.
'Uniformity is a core principle of the convention, ensuring equal treatment and legal recourse for all affected individuals,' Kaleka, who serves as Advisor for Strategy and External Relations to boutique advisory firm, Closed Door India, asserted.
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Damages: What the convention says
Chapter III of the convention talks about the 'liability of the carrier and extent of compensation for damage'. Kaleka explained that under the convention, airlines are strictly liable for up to 1,51,880 'Special Drawing Rights (SDR)', amounting to over $2,07,000 per passenger in the event of death or bodily injury, without the need to prove fault.
SDR is not a currency but rather an international reserve asset created by the International Monetary Fund in 1969. Its value depends on a basket of five currencies—the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
This asset is exchangeable for currency by holders. The value of SDR in terms of US Dollars (USD) is determined daily based on the spot exchange rates observed close to noon, London time. As of 13 June 2025, the value of one SDR is 1.368 USD.
'For baggage, cargo and passenger delay claims, separate SDR limits apply. These thresholds get reviewed every five years to account for inflation. The most recent adjustment, effective from December 2024, increased the limits by 17.9 percent. The convention thus ensures a guaranteed base level of compensation,' he explained.
Beyond this amount, Kaleka said, the compensation is 'unlimited', but the airline must show it was not negligent to avoid further liability.
Ahuja also pointed out that Article 23 of the convention provides that the conversion of SDRs into national currency must be made according to the IMF method of valuation in effect on the date of judgment. As of Friday, one SDR equals Rs 121.98.
'Accordingly, any judicial or arbitral determination of compensation must consider both the applicable SDR valuation and the specific evidentiary findings, including the existence of wilful misconduct or gross negligence by the carrier,' he added.
Who will pay the compensation
Kaleka explained that the compensation is typically paid by the liability insurance provider of the airline. Article 50 of the Convention makes it mandatory for airlines to maintain adequate liability insurance.
Article 50 of the convention says, 'States Parties shall require their carriers to maintain adequate insurance covering their liability under this convention.'
Kaleka asserted that in cases of catastrophic accidents, such as the AI 171 crash, the airline initiates interim payments directly to the victims' families, after which insurance settlements complete the full compensation payment.
'If negligence or systemic failure gets established, the airline and potentially other liable parties such as aircraft manufacturers may face additional financial exposure,' he said. 'The cost to the airline is in terms of the exuberant insurance premium, which it will have to pay going forward now.'
(Edited by Madhurita Goswami)
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