Last week The Bhutanese brought out the story of how 42-year-old farmer Gyem Gyeltshen from Lunana had lost his 38-year-old wife Dresang Dema and 4-year-old daughter Nima Peday in a helicopter crash on 3rd March 2023 and even 11 months later he was still yet to get the insurance amount due to him.
Druk Air had not informed Gyem about the USD 200,000 insurance he was due to get for his wife and child coming to USD 400,000 total.
Druk Air had signed insurance documents with RICBL which in turn had reinsured it with the international Reinsurance Companies QBE Insurance (Australia) Limited and Best Meridian International Insurance Company SPC.
Instead, Druk Air had advised Gyem to deal with a Bhutanese lawyer representing Holman Fenwick Willan (HFW), a legal firm in Singapore hired by the two international reinsurance companies.
According to Gyem the HFW representative told him that all he will be eligible for USD 20,000 only and asked him to sign a legal agreement (story on pg 1).
Secretary wants action
The Ministry of Infrastructure and Transport Secretary Phuntsho Tobgay said he spoke to the RICBL CEO and the Druk Air CEO and has also been talking to Gyem Gyeltshen who has come to him but has not formally appealed yet.
“We are still considering as it is still under the stage of resolution,” said the Secretary.
“I informed the Druk Air CEO saying Gyem has already come to me and if it blows up the ministry will take a stand and it will not reflect well (on Druk Air). Gyem has not lodged a complaint formally but once such a complaint is lodged formally then the ministry would be involved. We are in communication with Druk Air,” added the Secretary.
The Secretary said that he has been given to understand that while we have seen one document of USD 200,000 insurance, both the CEOs of Druk Air and RICBL said there are annexures to that document.
“We are not clear what the full scope of the legal document is but both CEOs were saying the annexures will make it clear the extent of compensation and they make a clear reference to our national laws.”
The Secretary said the passenger has lost his spouse and daughter in the crash and if there is any litigation then the ministry will take a stand.
Druk Air CEO says they are looking into it
The Druk Air CEO Tandi Wangchuk said that on Monday there was a meeting between Druk Air and RICBL teams and he said they mentioned the urgency to settle, and if all the parties reached a settlement there is no problem. He said the legal representative of HFW is out of station and so in his absence they could not have additional discussion.
The Druk Air CEO said they would like to have RICBL coordinating between RICBL, Druk Air, Gyem Gyeltshen and the legal representative of HFW.
Apart from the HFW lawyer not here, Gyem Gyeltshen is in Punakha for only two more weeks.
The CEO said that while it says USD 200,000 in the insurance document but there are points in the annexures that they are going to discuss and have a meeting on it.
He said if the parties reach an agreement on payment then they will support and if not then both parties have to go to court.
The CEO said the reinsurance companies have a right to send a lawyer as they sent a surveyor to check for the hull insurance. He said they have the right to investigate and the right to come and meet the victim and look at local laws etc.
Why insurance cannot be denied
The insurance document on page 4 clause 5 says, “Reinsurers shall not be obliged to make a payment under this Endorsement if such payment would contravene the laws of the jurisdiction to which the Reinsured is a subject.”
However, there is no law limiting such a liability payment especially when an insurance policy is involved.
A judicial expert said if there is an insurance document then there is no law in Bhutan that limits the pay out of the liability.
In case Druk Air tries to use Article 20 of its conditions of carriage limiting liability to Nu 750,000 for 12 and above and Nu 350,000 for 12 and below then two things will counter it.
The Judicial Expert says that a signed legal document like an insurance document will have precedence over any conditions set unilaterally by an agency and the victim should get the higher amount so that he is not short changed.
On the other hand, in the last article last week the Druk Air CEO said that the helicopter operations did not limit its passenger liability.
The Bhutanese has accessed a longer 15-page insurance document signed by a reinsurer and here again there is nothing in it to legally deny any insurance to Gyem.
A private lawyer supportive of Gyem said HFW cannot offer USD 10,000 compensation as there is no law in Bhutan that does not allow Gyem to take the full USD 200,000.
In terms of limited liability, he said the laws will set the minimum and not the maximum.
The example is the Desuup case before the Civil Liability Act in August 2022 when two ministries were ordered to pay Nu 28 mn for their mistakes that led to a lifelong disability.
The lawyer also said that there is nothing in international aviation treaties damaging to Gyem.
The private lawyer said that the HFW is trying to interpret the legal liability of the passengers as being one where there is a legal limit on the liability of the passenger but that is not accurate as firstly there is no legal limit in case of insurance and secondly legal liability refers to legal fees in addition to the other liabilities.
The private lawyer said if Druk Air is trying to apply its conditions of carriage then why did HFW offer USD 20,000 which is well above that.
According to a source while the accident occurred on 3 March by 10th March Druk Air’s main concern was on the hull insurance and the deductibles and there was no concern or effort about the insurance of the passengers who are covered under the same insurance document.
Both Druk Air and RICBL are also yet to share the complete insurance document with the annexures with Gyem as he was only recently given a 4-page summary document without the annexures.
The lawyer said that Druk Air, the reinsurers and HFW are looking for a legal face saver but they know they have made a mistake and hence the hesitation in sharing documents and information even with Gyem.
The insurance document says, “The Reinsurers and insured shall each take all the reasonable steps at their own cost to obtain any necessary governmental consent or license in order to permit such payment to be lawfully made.” This clause clearly puts the onus on Reinsurance companies and Druk Air to help Gyem but they did not do so.
A possible lawsuit
The lawyer said that Druk Air has to pay as there is a single combined liability of USD 20 mn which includes the USD 200,000 if he agrees without having to go to court but if Gyem goes to court then he can claim millions.
“The combined liability is USD 20 mn and after deducting the hull insurance and other charges it should come to around 15 mn. This should be divided by the number of passengers which comes to around 3 mn plus per passenger and so Gyem should sue Druk Air and the reinsurance companies for USD 6 mn in addition to legal expenses of Gyem,” said the lawyer.
The lawyer said Gyem has a strong case in court based on how they tried to fool him, loss of his wife and daughter, denial of insurance for 11 months and more.
The lawyer said that Bhutanese travellers are already paying for the insurance premium on the air ticket and so it makes no sense to deny insurance to Gyem.
“The funny part also is that the semso was done without his consent. He knows Dzongkha well and through the local government his consent should have been taken in writing but it was not done,” said the lawyer.
The document of the HFW legal representative offered to Gyem says that since the occurrence of the accident the claimant has already received from or on behalf of Druk Air a sum of USD 7,305 in respect of funeral expenses for Dresang Dema and Nima Peday and a cash advance to the claimant and this in addition to the USD 20,000 will be the full and final settlement.
Gyem had already told the paper that he was under the impression that the Nu 100,000 he got from Druk Air was semso along with Druk Air flying the Lam in for the funeral prayers (after refusing Gyem’s request to fly the bodies of his wife and child to Punakha for ceremonies) but he only later learnt it is being charged as a part of the insurance pay out.
The lawyer said that the 1929 Warsaw Convention limited liability to encourage the air travel industry in its infancy but now it is the opposite end of the spectrum and the focus is on passenger rights and the need for aviation to have more accountability and standards.