The Bhutanese Leading the way.
On 3rd March 2023 42-year-old Gyem Gyelsthen lost his 38-year-old wife Dresang Dema and his four-year-old daughter Nima Peday in a helicopter crash due to pilot error.
While the insurance documents for Druk Air’s helicopter clearly outlined a USD 200,000 insurance per person the international reinsurance companies through a Singaporean legal firm Holman Fenwick Willan (HFW) offered only USD 10,000 each.
This paper brought the matter to light in January and February 2024 leading to outrage and assurances by Druk Air and RICBL that the matter would be looked into it.
However, after much meetings and correspondence HFW on behalf of the international reinsurance companies have not budged from their initial position of USD 10,000 each and sent a letter to that effect on 29th April 2024.
In the middle of all this is Gyem Gyeltshen who has now slipped into depression. Gyem’s house in Lhedi is a one-day walk from the Lunana Gewog center but unable to bear the loneliness of his home he has locked it up and to keep himself occupied and distracted he is working as a chef at the Pema School in the Gewog.
His two elder daughters are in boarding school in Punakha.
He used to go cordycep collecting with his wife in better times but he is now unable to do so. His mental state is such that even if the cordyceps is there in front of him he cannot spot it.
Gyem said, “When I enter my now empty home, everything reminds me about my late wife and youngest daughter and I miss them so much that I cannot bear to be at home which is why I locked up everything and moved here at the school.”
Gyem unable to look at the pictures of his late daughter and the pain it caused in him deleted all her pictures from his mobile.
He said he cannot sleep at night as he keeps thinking about them.
The sight of small children with parents reminds him about his daughter and it further saddens him.
Gyem said the offer by the reinsurance companies is unacceptable as it is not in line with the insurance policy document. Gyem also has a simple question for Druk Air management.
“Would they accept USD 20,000 and let the matter be if they lost a spouse and a child in an air crash?”
The HFW letter sent to Gyem’s relative and representative Karma Tshering on 29 April 2024 says, “As you will be aware, the helicopter on which your client and his family were travelling on was performing a domestic flight in Bhutan. Therefore, Druk Air’s liability will be subject to the provisions of Bhutanese law.”
“While there are no specific laws or conditions governing compensation for deaths arising in an aviation accident in Bhutan which would apply to the death of Ms Dresang Dema and Ms Nima Peday, we have been advised by our local Bhutan counsel that the Bhutanese courts will look to other legislation in Bhutan to determine an appropriate amount for compensation, namely, the Road Transport Safety Act and the Bhutanese Penal Code,” says the letter.
The HFW letter then lists out the compensation due according to it.
It says the ten years compensation (based on minimum wage) under the Penal Code of Bhutan for loss of life is Nu 450,000 or USD 5,500.
It says the expenses for 7 people (monks) for 49 days funeral Rites is Nu 343,000 or USD 4,200.
The letter also says the compensation for death under the RSTA Act for death is Nu 20,000 (USD 244) for adults and Nu 10,000 (USD 122) for children.
It totals this to Nu 813,000 or USD 9,930 for the life of an adult and Nu 803,000 for USD 9,802 for the life of a child.
The HFW letter says, “It is on the above basis that we made our previous offer of USD 10,000 per passenger (i.e. totalling USD 20,000) which is in line with local Bhutanese law. In line with the above, our clients’ previous offer of USD 20,000 in full and final settlement of the deaths of both Ms Dresang Dema and Ms Nima Peday remains open for acceptance should your client wish to accept it. Further, our offer is subject to your client agreeing to sign a Release document which we will draft and send to you.”
Gyem’s legal representative, Karma Tshering, said that given the response and unchanging stance from the international reinsurance companies through HFW, Gyem has decided to file a legal suit in court on getting the claims as per the insurance document.
Earlier, on 6th February 2024 Gyem Gyeltshen, his lawyer Karma, RICBL, the Druk Air and the Bhutanese legal representative of HFW met and it was decided that Gyem and his legal representative will have to file paper work with Druk Air justifying the claim which will study it and pass it on to RICBL which in turn will pass it on to the Reinsurance companies.
Karma then on 16th February filed a personal injury and loss claims against the insurance policy holder Druk Air Corporation of USD 8.84 million (mn).
Karma said he filed based on the full insurance documents that was given to him on 6th February where the legal liability was set at USD 20 mn which is also for bodily injury including passenger legal liability.
There are two main basis for the claims. One is the death of two family members, injury to the surviving two and the overall anguish to the family and the other is the loss of the expected future income in collection of cordyceps and household services.
The claim says the claim is also in the context of the crash being caused by human error and the fact that the pilot on duty was not flying on the day due to the issue of working relations between the pilots.
The damages claimed are USD 3.83 mn to Gyem Gyeltshen and the family for lost past and expected future income and lost household services in light of the economic aspects of their lives.
USD 2.5 mn to daughter Kinley Pelden who was on the flight for serious bodily injury, sorrow, mental anguish, and solace vis-à-vis losing forever her beloved mother and sister.
USD 1.5 mn to Gyem Gyeltshen for minor bodily injury, sorrow, mental anguish, and solace vis-à-vis losing forever his beloved wife and daughter.
USD 1 mn to elder daughter Kinley Om for sorrow, mental anguish, and solace vis-à-vis losing forever her beloved mother and sister.
USD 1,000 to Gyem Gyeltshen for baggage destroyed and other costs.
While this claim was filed on 16th February 2024 with Druk Air it forwarded the claim on the same day to RICBL
Karma followed up with Druk Air on 13th March 2024 which in turn followed up with RICBL on the same day.
RICBL wrote back to Druk Air on 19th March 2024 informing that it had also forwarded the claim document on the same day to its counterpart abroad and that it is being reviewed by the Lead reinsurer and HFW who will provide an update promptly once a decision is reached.
With again no response Karma again followed up on 1st April.
Then on 29th April HFW directly wrote to Karma making an offer of USD 20,000 for both the lives.
Karma said he refused to recognize HFW as the passenger should deal with Druk Air that holds the policy and not a foreign legal firm whose jurisdiction is not in Bhutan and cannot represent either Druk Air, RICBL or the reinsurance companies in Bhutanese courts.
On 10th May RICBL wrote to Druk Air saying the insurance policy protects Druk Air from any legal liabilities and since the same risk was reinsured the ‘claims control clause’ under ‘reinsurance conditions’ in the insurance policy enables the Singapore based Lead Re-insurer (India International Insurance) to have full authority for any claim settlement including appointment of Surveyor and Law firm which in this case is also the Singapore based HFW.
It said the insurance policy grants full authority to HFW to negotiate and settle any legal liability claims against Druk Air.
The letter said RICBL agrees that HFW has full authority to handle negotiations and decide any legal related matters on behalf of RICBL and Druk Air.
Based on this RICBL letter the Druk Air on 13th May 2024 wrote to Karma saying that Karma should communicate with HFW regarding the ongoing passenger liability settlement.
Karma said he does not accept the letters from RICBL and Druk Air to communicate with HFW and so a legal suit will be filed. He said it is yet to be decided if the suit will be against one company or a group of companies.
Karma admitted that he had not communicated with this paper since 10th February 2024 over the last three months, despite this paper following up constantly, in the hopes that a respectable counter offer would be made and there would be a negotiated settlement away from the media.
However, this strategy of secrecy from the media and trust in the reinsurance companies to do the right thing adopted by Karma for three months has backfired as the lack of media coverage took away public and government attention and instead the same offer was repeated in the end as the reinsurance companies played for time. ་་ཅཅཅཅཅ
India International Insurance has 20% stake in the reinsurance and the other players are Best Meridian International Insurance Company SPC with 16%, La Reunion with 15%, The New India Assurance Company with 15%, QBE Insurance (Australia) Limited with 10%, Fair Aviation Pool with 10% and Societe Central de Reassurance, Morocco with 7%. This is a total of 93% policy owned by foreign companies.
Surprisingly The Bhutanese found that the remaining 7% stake for reinsurance had been taken by a Bhutanese company called GIC Bhutan Reinsurance Co Ltd which is owned 26% by GIC India, 29% is owned by two local promoters and 45% is owned by the public.
The 7% stake means GIC Bhutan gets the 7% of the premium and also has to pay out 7% of the total claim.
GIC though being the only reinsurer present in Bhutan did not take part in any of the meetings with Gyem’s legal representative, RICBL and Druk Air and also did not come forward to help resolve the situation.
The legal case once in court will be a landmark case and the first of its kind.
The case will show if international reinsurance policy documents have any legal obligations or responsibilities in Bhutan, apart from collecting handsome premiums in good times.
It will also assign what is the worth of a Bhutanese life in the international context.
