Third-Party Liability for Damage Caused by Aircraft on the Surface

Introduction

The liability of an airline to its own passengers is governed by the Montreal Convention 1999. The liability of an aircraft operator to persons on the ground who have no contract with it, such as the owner of a house or a boat damaged by a crashing aircraft or by an object falling from it, is a separate matter. The Maldives ratified the Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface (the Rome Convention 1952) on 5 September 1995.

The convention was ratified before the current Constitution came into force in 2008 and therefore did not require parliamentary approval under Article 93. It has not been enacted as a Maldivian statute.

Scope

Article 23(1) provides that the convention applies to damage caused in the territory of a contracting state by an aircraft registered in another contracting state. Both conditions must be satisfied. Damage caused in the Maldives by an aircraft registered in a state which is not a party is outside the convention, and so is damage caused in the Maldives by an aircraft registered in the Maldives. The convention therefore does not apply to domestic operations, including seaplane operations, which are conducted almost entirely with Maldivian registered aircraft. Under Article 23(2), ships and aircraft on the high seas are treated as part of the territory of their state of registration.

Article 24 excludes damage to an aircraft in flight and to persons or goods on board it, so claims by passengers and cargo owners remain governed by the Montreal Convention 1999 or by the contract of carriage. Article 25 excludes damage regulated by a contract between the claimant and the operator and damage to employees covered by workmen's compensation law.

Basis of liability

Article 1 provides that any person who suffers damage on the surface is entitled to compensation on proof only that the damage was caused by an aircraft in flight or by any person or thing falling from it. The claimant does not have to prove fault. There is no right to compensation if the damage is not a direct consequence of the incident, or if it results from the mere passage of the aircraft through the airspace in conformity with the applicable air traffic regulations.

Under Article 2, liability attaches to the operator of the aircraft, which is the person making use of the aircraft at the time of the damage. The registered owner is presumed to be the operator unless it proves that some other person was the operator and brings that person into the proceedings. The defences are narrow. Under Article 5, the operator is not liable if the damage is the direct consequence of armed conflict or civil disturbance, or if it has been deprived of the use of the aircraft by act of public authority. Under Article 6, the operator is not liable if it proves that the damage was caused solely by the negligence or other wrongful act of the person who suffered it.

Limits of liability

In return for strict liability, Article 11 limits the amount recoverable from the operator for a single incident by reference to the maximum weight of the aircraft. The limits are expressed in gold francs and increase in bands from 500,000 francs for aircraft weighing 1,000 kilogrammes or less to 10,500,000 francs plus 100 francs per kilogramme over 50,000 kilogrammes for the largest aircraft. Liability for death or personal injury is further capped at 500,000 francs for each person killed or injured. Under Article 12, the limits do not apply if the damage was caused by a deliberate act or omission of the operator or its servants done with intent to cause damage, and a person who wrongfully takes and uses an aircraft without the consent of the person entitled to use it is liable without limit.

The limits were set in 1952 and have been widely criticised as inadequate. The conversion of the gold franc into national currency is itself uncertain, since gold is no longer used as a monetary standard. This is the main reason why the convention has attracted few parties.

Procedure and enforcement

Article 15 permits a contracting state to require the operator of an aircraft registered in another contracting state to be insured in respect of its liability for damage sustained in its territory. Article 19 requires a claimant to bring an action or notify the operator within six months of the incident, failing which the claim ranks behind claims notified in time. Article 20 provides that actions under the convention may be brought only before the courts of the contracting state in which the damage occurred, unless the parties agree otherwise, and that a final judgment of that court is enforceable in the other contracting states subject to limited exceptions. Under Article 21, the period of limitation is two years from the date of the incident, subject to an absolute bar of three years.

The provision on jurisdiction is significant for the Maldives. A judgment of a Maldivian court against a foreign operator under the convention would be enforceable in the operator's home state if that state is a party, whereas a Maldivian judgment is not otherwise readily enforceable abroad in the absence of a reciprocal enforcement arrangement or permissibility of enforcement of foreign judgments under local laws of the relevant country.

Attempts at modernisation

The Montreal Protocol 1978 replaced the gold franc with the Special Drawing Right (SDR) and raised the limits, but it has few parties. In 2009, ICAO adopted two new conventions intended to replace the Rome Convention: the General Risks Convention and the Unlawful Interference Compensation Convention. Both impose strict liability on the operator up to limits based on the maximum take-off mass of the aircraft, rising to 700 million SDR for the largest aircraft, with unlimited liability above that amount unless the operator proves that it was not negligent. The unlawful interference convention adds an international compensation fund financed by passenger contributions. Neither convention has entered into force.

Position under Maldivian law

Where the convention does not apply, liability for damage caused by aircraft is a matter of the general law of the Maldives. Section 21 of the Civil Aviation Act (Law No: 2/2001) provides that no liability lies for nuisance or inconvenience caused to any person by the flight of an aircraft in the ordinary course of events and in accordance with the act and the regulations. The section does not exclude liability for actual damage. There is no Maldivian statute which imposes strict liability on aircraft operators for surface damage, and a claimant against a Maldivian registered aircraft must therefore establish liability under the ordinary principles applied by the Maldivian courts.

Insurance is dealt with by Air Safety Circular OPS-14 (Third Party Liability Insurance), issued on 20 November 1995 and in force since 1 March 1996. It requires every Maldivian registered aircraft, and every aircraft operated by a Maldivian air operator's certificate holder, engaged in public transport to carry public liability cover of not less than USD 2 million, plus USD 250 for each kilogramme by which the maximum take-off weight exceeds 5,700 kilogrammes. The requirements for scheduled and charter flights require foreign airlines to file copies of their third-party liability insurance, which is the requirement contemplated by Article 15 of the convention.

Comment

The Rome Convention gives persons in the Maldives a fault free basis of claim against the operators of foreign aircraft from other contracting states, and a Maldivian judgment which is enforceable in those states. Its limits, however, are outdated, and it does not apply to the domestic and seaplane operations which fly daily over inhabited islands, resorts and lagoons.

In practice the protection of third parties depends on insurance rather than on the convention. The minimum amounts in Circular OPS-14 were set in 1995 and have not been revised since. They are well below the levels now required in the European Union and other jurisdictions, where cover is graduated by maximum take-off mass and reaches several hundred million SDR for large aircraft.

For more information, please contact:

Mr. Ahmed Murad, Senior Partner

Email: [email protected]