Chief Judge of t he Federal High Court, Hon. Justice Ibrahim Auta
{left} and the Acting Director General of the Nigerian Civil Aviation Authority {NCAA},
Engr. Benedict Adeyileka at the opening of a Two-Day seminar on Aviation Law for
Federal High Court Judges and other Stakeholders at the Sheraton Hotel, Ikeja.
The Nigerian Civil Aviation Authority (NCAA) held the third in the series of its annual seminar Civil Aviation Law for Federal High Court Judges at the Sheraton Hotels & Towers, Ikeja, Lagos where eminent jurists were invited to discuss several legal issues relating to incidents, accidents, modern and developing legal issues in Nigeria and around the world.
The Acting Director General of NCAA, Engineer Benedict Adeyileka in declaring the two-day seminar opened after welcoming the Chief Justice of the Federal Court of Appeal, the Chief Justice of the Federal High Court, Justices of the Federal High Courts, Justices of State High Court, Senior Advocates of Nigeria, Members of the Noble profession, Aviation Experts and colleagues in the Aviation Industry, Stakeholders said among others that:
"This seminar is our humble contribution to the growth and development of aviation law, practice and procedure in Nigeria and it is aptly titled “Air Carrier Liability and Insurance in Nigeria Aviation Industry.”
The primary objective of these annual seminars is the provision of a platform for interaction by jurists and industry stakeholders on policy, law and regulatory framework of Aviation in Nigeria.
It is our belief, that the Authority hither to the commencement of these seminars, were being saddled with “frivolous suits”, due to inadequate enlightenment of the stakeholders and the general public on the statutory functions of the Authority.
As previously done, the theme for this year, addresses a contemporary issue in aviation following recent incidences, accidents and developments in civil aviation globally.
It is my humble belief that the interactive sessions for these 2days, would be very beneficial to all stakeholders and Nigerians as a whole. The main objective for this would be, to refine and enhance carrier liability and insurance arrangements in Nigeria, which the management of the NCAA intends to capture in the proposed amendment to the Civil Aviation Act 2006 and the Nigeria Civil Aviation Regulations 2009 and 2012 respectively.
L-R: Director of Consumer Protection , NCAA, Mallam Abdullahi Adamu,
Chief Judge of t he Federal High Court, Hon. Justice Ibrahim Auta, Company
Secretary/Legal Adviser, NCAA, Barr. Pollie Okoronkwo and the Acting
Director General of the Nigerian Civil Aviation Authority {NCAA}, Engr.
Benedict Adeyileka at the opening of A-Two-Day seminar on Aviation Law
for Federal High Court Judges and other Stakeholders at the Sheraton Hotel, Ikeja.
Permit me to highlight a number of contemporary issues which have brought aviation liability and insurance under scrutiny, thereby emphasizing the need to reexamine our legal and policy framework, to ensure that our regulatory framework is appropriately adapted to modern aviation and insurance environment.
These issues include but are not limited to:-1. Airline incident and accident. Attention is shifting to victim’s access to compensation and the assistance airline provides to victims and their families. There is a need to afford appropriate protection, which would be commensurate with international standards, best practices and values.
2. Montreal Convention. This is regarding the review of the liability of carrier for damage(s) caused during international carriage to and from Nigeria. There is need to consider additional issues, which require further consideration in the broader context of aviation liability and insurance framework, in order to clarify and improve consumer protection for air travelers.
3. Modernization of Rome Convention. ICAO is currently developing 2 conventions, which will deal with compensation for third party victims of air accidents (i.e. people on the ground who are injured by a crashing aircraft).These are intended to replace the Rome Convention which currently deals with this issue.
4. War Risk Insurance. The pertinent question is “Should air carriers be insured for such risk?” To consider contracting for such war risk insurance, it is important to examine the issues which are likely to have implications on its global regulation. The dilemma thus is - Should this be incorporated into our regulatory framework?
All these and many more issues would be discussed in detail and solution(s) proffered in this seminar" Engineer Adeyileka concluded while wishing participants
very fruitful deliberation.
AN OVERVIEW2. Montreal Convention. This is regarding the review of the liability of carrier for damage(s) caused during international carriage to and from Nigeria. There is need to consider additional issues, which require further consideration in the broader context of aviation liability and insurance framework, in order to clarify and improve consumer protection for air travelers.
3. Modernization of Rome Convention. ICAO is currently developing 2 conventions, which will deal with compensation for third party victims of air accidents (i.e. people on the ground who are injured by a crashing aircraft).These are intended to replace the Rome Convention which currently deals with this issue.
4. War Risk Insurance. The pertinent question is “Should air carriers be insured for such risk?” To consider contracting for such war risk insurance, it is important to examine the issues which are likely to have implications on its global regulation. The dilemma thus is - Should this be incorporated into our regulatory framework?
All these and many more issues would be discussed in detail and solution(s) proffered in this seminar" Engineer Adeyileka concluded while wishing participants
very fruitful deliberation.
In his keynote address/overview of Air Carrier Liability and Insurance in Nigerian Aviation Industry, the NCAA Company Secretary, Mr Pollie Okoronkwo, Esq noted that the theme for this year’s seminar is predicated on industry experiences, as it relates to serious air incidences and accidents, vis a vis insurance and air carriers’ ability, to meet their obligations to their passengers and other affected third parties.
Before delving further into the issue, Okoronkwo highlighted few contemporary experiences, which pose great challenges to the aviation industry at large.They are:
1. The Pros and cons of insuring locally, vis-à-vis having a foreign insurer;
2. Claims made by multiple heirs of accident victims;
3. Delay in payment of compensation, arising from the slowly grinding wheels of justice, especially in the administration of estate matters; and
4. Challenges faced by the Regulator, in relation to validity of insurance policies and unavailability of insurance coverage at the time of loss.
In light of the foregoing, he said there was an urgent need to enlighten stakeholders, on the law of air carriers’ liability; and the underlining principles and technicalities therefrom, which might affect the success or otherwise of their claims.
Before delving further into the issue, Okoronkwo highlighted few contemporary experiences, which pose great challenges to the aviation industry at large.They are:
1. The Pros and cons of insuring locally, vis-à-vis having a foreign insurer;
2. Claims made by multiple heirs of accident victims;
3. Delay in payment of compensation, arising from the slowly grinding wheels of justice, especially in the administration of estate matters; and
4. Challenges faced by the Regulator, in relation to validity of insurance policies and unavailability of insurance coverage at the time of loss.
In light of the foregoing, he said there was an urgent need to enlighten stakeholders, on the law of air carriers’ liability; and the underlining principles and technicalities therefrom, which might affect the success or otherwise of their claims.
L-R: Acting Director General of the Nigerian Civil Aviation Authority {NCAA},
Engr. Benedict Adeyileka. , Company Secretary/Legal Adviser, NCAA,
Barr. Pollie Okoronkwo and and Barr. Emmanuel Chukwuma at the
opening of A-Two-Day seminar on Aviation Law for Federal High Court Judges
and other Stakeholders at the Sheraton Hotel, Ikeja.
In order to succinctly capture this year’s theme, which is “Air Carrier Liability and Insurance in the Nigeria Aviation Industry”, there, is need to identify the parameters of air carriers’ liability.
The rest of his lecture to the gathering went thus:
"Here, Air Carriers’ Liability would be discussed under 3 distinct areas as follows:
1. Liability for Injuries to passengers;
2. Liability arrangement for cargo and baggage; and
3. Liability to third persons on the ground.
Passengers:-
The development of international law regulating carriers’ liability for passengers, began with a treaty signed at Warsaw, on 12th October 1929 (the Warsaw Convention), which along with a number of subsequent Conventions and Protocols, together form the ‘Warsaw System’.
The Warsaw System is rapidly being superseded by the Convention for the Unification of Certain Rules for International Carriage by Air, done at Montreal, on 28th May 1999 (the ‘Montreal Convention’ “MC”). The Montreal Convention entered into force, between State Parties that had ratified the Convention on 4th November 2003.
The Montreal Convention modernizes and improves the rules applying to the liability of air carriers. It provides for a two-tier system of liability, fifth jurisdiction, electronic ticketing and air way bill amongst other innovations over the Warsaw System.
These shall be thoroughly discussed in this seminar, as the Montreal Convention has been domesticated in Nigeria by virtue of Sec 48 of the Civil Aviation Act 2006; which consequently, becomes the principal law governing air carriers’ liability for international/domestic air transportation in Nigeria.
Baggage
The Montreal Convention also contains provisions for damage to a passenger’s baggage.
Under the benchmark Montreal Convention, airlines are liable for up to 1000 SDR which is approximately $2000, per passenger for damage to baggage.
This limit can be increased, if the passenger makes a ‘special declaration’ at check-in, regarding the value of the baggage (although the airline could consequently refuse to carry or charge a higher fee to carry the baggage). The caps would not apply, if it is shown, that the damage was caused by the carrier's intentional or reckless conduct.
In relation to ‘checked in’ baggage, passengers are not required to prove that the carrier was at fault in causing the damage. However, carriers will not be liable for damage to goods caused by any ‘inherent defect, quality or vice’ of the baggage.
For ‘carry on’ baggage, carriers are only liable for damage, if it is shown that the damage was due to the fault of the carrier or its agents.
Third Parties
Air Carriers’ Liability as it relates to damage to third parties, is governed by the Convention on Compensation for Damage Caused by Aircraft to Third Parties (the 'Rome Convention').
This treaty regulates compensation for damage to victims on the ground in participating countries, caused by aircraft, but not arising out of any unlawful interference with such aircraft. However, the Rome Convention never received widespread acceptance.
Nigeria adhered to the Convention on 6 March 1970. On 10 May 2002, an instrument of denunciation of the Convention by the Government of Nigeria was received by the International Civil Aviation Organization, which took effect on 10 November 2002.
However, Section 74 of the Civil Aviation Act 2006, requires that air carriers maintain adequate insurance, covering its liability towards compensation for damages, that may be sustained by third parties, for an amount as specified in Part 18.11.4 of the Nigeria Civil Aviation Regulations 2012 Volume II .
INSURANCE
Aviation insurance is insurance coverage geared specifically to the operation of aircraft and the risks involved in aviation. Aviation insurance policies are distinctly different from those for other areas of transportation. Aviation insurance can be split into three sub sets as follows:
• the hull of the aircraft;
• the liability of the carrier for passengers, cargo and crew; and
• the liability for damage caused to third parties.
Nigeria requires airlines to maintain insurance for passenger, cargo and crew and damage caused to third parties, by virtue of Sec 74 and Sec 48 of the Civil Aviation Act, which domesticated the Montreal Convention. All operators in Nigeria are required to maintain valid and adequate insurance. The validity of insurance could easily be ascertained by reading the insurance policy. What constitutes ‘adequate insurance’ or its relevance, (if any) in this context, is one of the issues to be dealt with in this seminar. Part 18.11.4 and 18.11.5 of the Nigeria Civil Aviation Regulation 2012, sets forth the minimum third party liability insurance limit, for carriage of passengers, mail and cargo in Nigeria.
Should NCAA be focused on limits of liability coverage, as captured in its Regulations or adequacy as provided for in the Civil Aviation Act 2006? This is up for discuss.
The Nigeria Government does not regulate insurance for Aircraft hulls, although many aviation leasing agreements will require carriers to maintain insurance against these risks.
One element of an aviation insurance contract for air carriers —for both passenger liabilities and third party liabilities— relates to war risks.
The international insurance industry has proposed introducing changes to the aviation insurance market, by excluding or restricting the availability of insurance for events involving particular weapons of mass destruction,(sometimes referred to as the ‘new perils’, which includes chemical/biological warfare, ‘dirty bombs’, and electro-magnetic pulse devices).
Aviation insurance clauses exclude so-called war risks (including the ‘new perils’) under the standard War, Hijacking and Other Perils Exclusion Clause AVN48B. However, payment of an additional premium will allow most excluded risks (including the ‘new perils’) to be ‘written back’ under separate extension clauses, thereby allowing airlines to purchase cover for those risks. I believe the threat of Boko Haram could be addressed therein.
It is not possible to obtain insurance (either directly, or via the use of a write back clause) for nuclear explosions. Carriers currently operate without insurance for this risk.
Which way Nigeria should go in this regard, will be discussed at this seminar.
Consumer Protection matters as it relates to air carrier liability shall be discussed. Laws are made for the people and the consumers’ interests, rights and obligations are aptly captured in this year’s theme.
Liability and Insurance Framework – Objectives
It is necessary to clarify the fundamental objectives of the liability and insurance framework, to guide any proposed improvements to the regulatory system. The objectives should recognize the critical contribution that the aviation industry makes to the broader Nigerian economy, and recognize the entitlement of air accident/incident victims to obtain fair compensation for any injuries that they sustain.
NCAA puts forth, that the objectives of the liability and insurance framework should be:
1. Provide prompt and equitable compensation for consumers and victims of air accidents;
2. Foster a productive and sustainable aviation industry;
3. Provide an appropriate balance between the interests of victims, carriers, insurers and governments;
4. Be as simple as possible, to increase certainty for industry participants and reduce compliance costs; and
5. Be consistent with our international obligations, yet appropriately tailored for the Nigerian market.
In this forum, we have distinguished and knowledgeable speakers, who would exhaustively attempt to address these numerous challenges from different lenses, ranging from the aviation regulator, insurance regulator, air operator, litigators and jurist perspectives."
In relation to ‘checked in’ baggage, passengers are not required to prove that the carrier was at fault in causing the damage. However, carriers will not be liable for damage to goods caused by any ‘inherent defect, quality or vice’ of the baggage.
For ‘carry on’ baggage, carriers are only liable for damage, if it is shown that the damage was due to the fault of the carrier or its agents.
Third Parties
Air Carriers’ Liability as it relates to damage to third parties, is governed by the Convention on Compensation for Damage Caused by Aircraft to Third Parties (the 'Rome Convention').
This treaty regulates compensation for damage to victims on the ground in participating countries, caused by aircraft, but not arising out of any unlawful interference with such aircraft. However, the Rome Convention never received widespread acceptance.
Nigeria adhered to the Convention on 6 March 1970. On 10 May 2002, an instrument of denunciation of the Convention by the Government of Nigeria was received by the International Civil Aviation Organization, which took effect on 10 November 2002.
However, Section 74 of the Civil Aviation Act 2006, requires that air carriers maintain adequate insurance, covering its liability towards compensation for damages, that may be sustained by third parties, for an amount as specified in Part 18.11.4 of the Nigeria Civil Aviation Regulations 2012 Volume II .
INSURANCE
Aviation insurance is insurance coverage geared specifically to the operation of aircraft and the risks involved in aviation. Aviation insurance policies are distinctly different from those for other areas of transportation. Aviation insurance can be split into three sub sets as follows:
• the hull of the aircraft;
• the liability of the carrier for passengers, cargo and crew; and
• the liability for damage caused to third parties.
Nigeria requires airlines to maintain insurance for passenger, cargo and crew and damage caused to third parties, by virtue of Sec 74 and Sec 48 of the Civil Aviation Act, which domesticated the Montreal Convention. All operators in Nigeria are required to maintain valid and adequate insurance. The validity of insurance could easily be ascertained by reading the insurance policy. What constitutes ‘adequate insurance’ or its relevance, (if any) in this context, is one of the issues to be dealt with in this seminar. Part 18.11.4 and 18.11.5 of the Nigeria Civil Aviation Regulation 2012, sets forth the minimum third party liability insurance limit, for carriage of passengers, mail and cargo in Nigeria.
Should NCAA be focused on limits of liability coverage, as captured in its Regulations or adequacy as provided for in the Civil Aviation Act 2006? This is up for discuss.
The Nigeria Government does not regulate insurance for Aircraft hulls, although many aviation leasing agreements will require carriers to maintain insurance against these risks.
One element of an aviation insurance contract for air carriers —for both passenger liabilities and third party liabilities— relates to war risks.
The international insurance industry has proposed introducing changes to the aviation insurance market, by excluding or restricting the availability of insurance for events involving particular weapons of mass destruction,(sometimes referred to as the ‘new perils’, which includes chemical/biological warfare, ‘dirty bombs’, and electro-magnetic pulse devices).
Aviation insurance clauses exclude so-called war risks (including the ‘new perils’) under the standard War, Hijacking and Other Perils Exclusion Clause AVN48B. However, payment of an additional premium will allow most excluded risks (including the ‘new perils’) to be ‘written back’ under separate extension clauses, thereby allowing airlines to purchase cover for those risks. I believe the threat of Boko Haram could be addressed therein.
It is not possible to obtain insurance (either directly, or via the use of a write back clause) for nuclear explosions. Carriers currently operate without insurance for this risk.
Which way Nigeria should go in this regard, will be discussed at this seminar.
Consumer Protection matters as it relates to air carrier liability shall be discussed. Laws are made for the people and the consumers’ interests, rights and obligations are aptly captured in this year’s theme.
Liability and Insurance Framework – Objectives
It is necessary to clarify the fundamental objectives of the liability and insurance framework, to guide any proposed improvements to the regulatory system. The objectives should recognize the critical contribution that the aviation industry makes to the broader Nigerian economy, and recognize the entitlement of air accident/incident victims to obtain fair compensation for any injuries that they sustain.
NCAA puts forth, that the objectives of the liability and insurance framework should be:
1. Provide prompt and equitable compensation for consumers and victims of air accidents;
2. Foster a productive and sustainable aviation industry;
3. Provide an appropriate balance between the interests of victims, carriers, insurers and governments;
4. Be as simple as possible, to increase certainty for industry participants and reduce compliance costs; and
5. Be consistent with our international obligations, yet appropriately tailored for the Nigerian market.
In this forum, we have distinguished and knowledgeable speakers, who would exhaustively attempt to address these numerous challenges from different lenses, ranging from the aviation regulator, insurance regulator, air operator, litigators and jurist perspectives."
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