42-yr-old Gyem Gyeltshen from Lunana lost his wife and youngest daughter in the chopper crash where he and his elder daughter were also passengers

International Reinsurance companies try to deny Helicopter crash victim legal insurance amount for death of wife and child

Insurance papers show USD 400,000 insurance due for death of wife and child but international companies only offer USD 20,000 for the two deaths

The victim says Druk Air has also not been helpful

On the afternoon of 3 March 2023, a Druk Air helicopter carrying 42-year-old Gyem Gyeltshen, his wife and their two daughters crashed at around 2.25 pm at Wachey in Lunana.

The crash resulted in the death of Gyem’s 38-year-old wife and his four-year-old daughter. Gyem, his older daughter and the pilot Stefan survived.

It has been around 11 months since the accident but Gyem Gyeltshen and his two daughters have not yet been able to get the aviation insurance for the death of Gyem’s wife and child.

International Companies lowball victim and Druk Air not helpful

This is mainly due to efforts by the international Reinsurance Companies QBE Insurance (Australia) Limited and Best Meridian International Insurance Company SPC to give Gyem a much lower insurance amount for his wife and child than what he is actually due as per insurance papers.

As per the insurance documents signed between Royal Insurance Corporation Limited (RICBL) and Druk Air Gyem should be getting USD 200,000 each for his wife and daughter at a total of USD 400,000.

The RICBL in turn had reinsured the amount fully with QBE Insurance (Australia) Limited and Best Meridian International Insurance Company SPC as lead reinsurers.

As per international best practices since the two passengers died on Druk Air’s helicopter flown by a Druk Air pilot, Druk Air should have taken the lead or advised Gyem to what he is due and then help claim and process his claims.

This is more so in this case as Gyem is a class 3 drop out and a farmer staying in a remote village in Lunana with no knowledge on such issues.

Then RICBL with approval from Druk Air, Gyem and the Reinsurance companies can release the amount which has to be refunded back to RICBL by the international companies.

However, firstly Druk Air left Gyem to his own devices and did not help him to claim the due amount even though Druk Air had been paying premiums on the insured amounts.

Gyem was informed by some people that he should get insurance and when he asked this of the Druk Air CEO he said the CEO told him he does not know how much Gyem will get as it is decided by foreign reinsurance companies and Gyem should instead meet with their legal representative.

Gyem was not told about the insurance documents and amounts due to him under the agreement.

The two international reinsurance companies instead of honouring their commitment hired a legal firm in Singapore called Holman Fenwick Willan (HFW) to deal with Gyem and HFW in turn hired a local Bhutanese lawyer.

Gyem said that around three months ago the Bhutanese lawyer (acting on behalf of HFW) approached him in Punakha and said that all he would get is USD 10,000 each for his wife and daughter coming to a total of USD 20,000.

Gyem at the time still did not know he is actually due to get USD 400,000 in total.

However, before Gyem signed any papers he was contacted by a concerned citizen who informed him of the actual amount due to him and advised him not to sign anything and so then Gyem decided not to sign any documents until he could find out more.

The Bhutanese HFW lawyer went to RICBL asking them to sign the Discharge agreement offering USD 20,000 to Gyem but the legal department of RICBL refused to sign saying it needs the signatures of Gyem and Druk Air along with acceptance by HFW.

The legal department also expressed doubt saying that it does not want to get into issues as the due amount is USD 400,000 and instead USD 20,000 is being offered.

The HFW lawyer then went to Druk Air to get its signature but its entire team was in Bangkok and the officiating CEO declined to sign.

Gyem said that the new Gasa National Council member Tshering tried to help him and even made calls to the Druk Air CEO over insurance payment to Gyem but Gyem said the NC member told him that the Druk Air CEO was not happy with the call and asked the NC member if he plans to make the payment.

According to Gyem he was called by the Druk Air CEO to Paro not long after the funeral and Gyem went with expectations of some resolution and he said he booked a taxi from Punakha all the way to Paro and even took a hotel room in town since he does not know anyone in Paro. The next morning, he said he was disappointed to find that the main message from the CEO to him was not to make calls to other people on the issue.

Gyem said, “I got the feeling that Druk Air was not helping me to get the insurance.”

Druk Air processed its own chopper insurance

However, using the same insurance documents that was not privy to Gyem, Druk Air processed its own insurance for the helicopter.

The aircraft was insured at an agreed value of USD 3.6 mn. RICBL got the claim documents from Druk Air and forwarded it to a broker company which in turn sent it to the lead Reinsurance companies abroad.

The companies agreed to pay USD 3.4 mn of which Druk has already got USD 2.9 mn with USD 589,000 on the way.

The Insurance document, a copy of which is with this paper, lists USD 200,000 for a single passenger as a voluntary settlement.

This means that this is actually the minimum amount as the passenger can reject this and sue Druk Air for a higher amount in court.

For this reason, this insurance document also insures Druk Air for legal liabilities going up to USD 20 mn like passenger legal liability, aircraft third party legal liability, cargo and baggage legal liability.

A private lawyer aware about Gyem’s plight has agreed to help him recover the insurance amount with the condition he will fight the case pro bono (for free) if no major recovery can be made and only charge his legal fees if a substantial amount can be recovered.

Gyem’s lawyer asked how can Druk Air get most of the insured amount and the same is being denied to Gyem under the same insurance document.

He said that since Gyem is now his client he will be approaching Druk Air to help process the USD 400,000 insurance claim.

The lawyer said that he cannot understand why Druk Air is not being more helpful when firstly the insurance claim is legally due and secondly the money is coming from foreign reinsurance companies.

Larger questions on compensation

The issue at hand also raises the matter of what Bhutanese citizens will get if they are killed or injured in an air crash.

Currently Druk Air under its Conditions of Carriage Article 20 allots only Nu 750,000 for the death or permanent disablement of a passenger at or above 12 years of age and Nu 350,000 for those below that age.

For international passengers under Article 16 Druk Air says for death or personal injury the liability is in line with the in line with the Warsaw Convention is mostly limited to USD 10,000 or 20,000 per person except for those traveling to and from USA.

However, the difference here is that the above limitations in claims were only for fixed wing aircraft when the accident happened.

The Druk Air CEO Tandi Wangchuk himself admitted that the liability had been limited to fixed wing aircrafts operated by Druk Air and there was no such limitation set on helicopters.

This explains the insurance documents offering higher pay out for helicopter passengers.

Gyem’s lawyer said that while any limitation does not apply to his client most countries and airlines do not follow the 1929 Warsaw Convention and instead follow the more updated Montreal Convention of 1999.

According to Article 21 of the Montreal Convention, in case of death of passengers, the airline is liable to pay around USD 175,000.

In countries like USA the average compensation is USD 5 mn for one life lost.

The Druk Air CEO said that while Druk Air has signed on to some aspect of the Montreal Convention useful for its operations it has not ratified the compensation part.

The CEO said they heard that a legal firm had been appointed to settle the claims with the affected victim. He said that Druk Air is only like a Post Office because if both parties agree to settle the claim then Druk Air will endorse the claim.

He said that he would meet with the RICBL CEO on Monday to discuss the issue.

The Druk Air CEO said that if both sides (Gyem and HFW) do not reach an agreement then it may involve a court case between them. He said in many countries the claims are handled through the court.

The RICBL Legal General Manager and Officiating CEO Phub Dorji explained the reinsurance process outlined above and he said RICBL is willing to release payment, whatever be the amount, only once Gyem, Druk Air and HFW agree.

He said RICBL needs this as the refund will have to come from the reinsurance companies abroad and it also wants to avoid any legal issues as well as any controversies in the media later saying that RICBL only paid USD 20,000 to a person who could get USD 400,000.

The Bhutanese lawyer acting on behalf of HFW said he did not get the signatures from RICBL and Druk Air and so HFW could not pay (USD 20,000) to Gyem. He said that Gyem was ready to sign but Gyem now disputes this saying that he only wanted to get an initial amount and then await the full amount.

The HFW legal representative also asked if Gyem can claim any full amount for the insurance as the ticket was subsidized by the government (as it is for all Lunaps) and instead the government should get half the insurance claim.

Here, Gyem’s lawyer argued that by that logic since the government pays a part of the premium of the Rural Life Insurance then the government should claim Nu 15,000 of the Nu 30,000 insurance each time some villager dies.

After the crash Gyem initially thought that Druk Air was giving him semso of Nu 100,000 and helping with funeral arrangements including flying in a Lam to Lunana.

However, Gyem has now found out that the entire amount and expenses of Nu 600,000 are to be deducted from the insurance pay out whenever it happens.

Gyem said that as a villager he would never spend Nu 600,000 for funeral expenses but it appears Druk Air is charging him the cost of flying in the Lam for the funeral.

The Final Investigation Report on the crash by the Air Accident Investigation Unit of the Ministry of Infrastructure and Transport says that the probable cause was human error. This puts the liability on Druk Air and Gyem would be well within his right to sue Druk Air with the pay out having to be made by the reinsurance companies up to USD 20 mn.

The day of the accident

Recalling the day of the accident Gyem said, “The pilot flew in low and he made a sharp turn well before the area where turns are normally made and then he lost control of the helicopter. The helicopter crashed into the big trees on the slope and huge trees and branches crashed in through the glass front into us. There was then a loud explosion like a bomb and we crashed to the ground.”

“I was in the front with my older daughter who was crying profusely as her hand was badly injured and the pilot had some blood coming from his nose and was apologizing. I was stuck with my seat belt and could not hear see what happened to my wife and our four-year-old daughter in the backseat. I finally managed to free myself from the seat belt and rushed to the back and to my shock I saw the sight of my wife and my daughter in her arms and both were dead,” Gyem said.

Health officials later said the mother and daughter had died due to massive head trauma sustained in the crash.

He added that he never knew that such a major tragedy would happen and take away his wife and child in one stroke.

Gyem said that it has been almost a year since the incident but he has still not recovered from it and now without his wife and younger daughter his village home in Lunana and the winter home in Punakha are both empty.

He said that he now has two daughters left of whom one is 15 and the other is 10 and both are in school. The younger daughter who survived the crash could not attend school for a while due to the hand injury.

Gyem said that nothing can bring back his wife and youngest child but he was hopeful to use the insurance money to do some Gewa or rites and activities that would help the deceased and then use the remaining funds to secure the future of his two daughters who do not have a mother anymore. 

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