CARRIAGE BY AIR (MONTREAL CONVENTION, 1999) BILL

CARRIAGE BY AIR (MONTREAL CONVENTION, 1999) BILL: 5.55 pm

Order for Second Reading read.

The Minister for Transport (Mr Raymond Lim Siang Keat): Mr Deputy Speaker, Sir, I

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beg to move, "That the Bill be now read a Second time."

Sir, Singapore intends to accede to the Convention for the Unification of Certain Rules Relating to International Carriage by Air, which was signed at Montreal on 28th May 1999, commonly referred to as the Montreal Convention 1999.

The Montreal Convention 1999 is intended to consolidate, update and eventually replace all previous international air agreements on air carrier liability, including the Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on 12th October 1929, commonly referred to as the Warsaw Convention 1929.

Sir, when the Warsaw Convention 1929 was first negotiated, its provisions were aligned with the commercial practices of that time. It was intended to provide protection to passengers and cargo shippers and also the airline industry, which was then in its infancy. Even when subsequently amended by protocols, the fundamental basis of the Warsaw Convention 1929 still maintained its 1930s premises and it has been long contended that the passenger compensation limits have been unreasonably low.

Efforts to modernise the Warsaw Convention 1929 have resulted in a number of amending instruments (including the two that Singapore is party to - the Hague Protocol 1955 and the Montreal Protocol No. 4, 1975), which are collectively known as the Warsaw Convention regime.

Sir, the efforts to amend and update the Warsaw Convention regime did not bring about the intended results of better compensation across the board. Nor did it achieve a unified regime that could answer the increased demands of a

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globalised world. As a consequence, some airlines entered into private arrangements while some countries required their airlines to increase their limits, to enhance compensation limits. Without a substantial overhaul, compensation amounts will remain relatively low and the aviation industry will continue to face a complex web of international arrangements.

The Montreal Convention has updated and now provides a system for regular review of the compensation quantum for death of or injury to passengers, and damage to baggage and cargo during international carriage. It recognises that globalisation and the increased use of information technology have ushered in new and more efficient ways of doing business and allows for the use of electronic documents for passenger tickets and cargo movements.

Sir, let me highlight the key features of the Montreal Convention 1999:

First, removal of the cap on the quantum of compensation. There is no cap on the amount of compensation which an aircraft accident victim may recover from the airline. The airline is liable for all damages which can be proved.

Second, a two-tier system for the recovery of compensation. Under the first tier, the airline must pay up to 100,000 Special Drawing Rights, or SDRs, regardless of whether or not it is at fault. 100,000 SDRs is about S$230,000. The second tier, which has no cap, is based on presumption of fault, which can be rebutted by the airline based on certain defences.

Third, facilitation of compensation recovery. A passenger may sue an airline for the compensation in his home country. In the past, claims for damages could only

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be done in one of four possible jurisdictions:

- a court in the country, where the carrier is based;

- a court in the country where the carrier has its principal place of business;

- a court in the country where the carrier has an establishment by which the ticket was purchased or contract was made; or

- a court in the country of the passenger's destination.

The recovery of compensation is also facilitated without the need for lengthy litigation.

Fourth, maintenance of adequate insurance by airlines. This is to ensure that airlines have adequate financial resources to settle compensation claims.

Fifth, advance payments by airlines, if mandated by national legislation. This is to enable persons who are entitled to claim compensation to meet immediate economic needs arising from an aircraft accident. The amount of the advance payment is subject to national law and can be offset against the final settlement.

Sixth, simplification of documentation relating to carriage of passengers, baggage and cargo. This is to improve the documentation and facilitate implementation of electronic air waybills and passenger tickets.

Under simplified documentation processes, electronic records are acceptable if they show adequate evidence of the contract and are in formats that meet the prescribed laws and regulations. Cargo consignors will be able to use simplified electronic records in place of detailed paper-based air waybills. In this connection, may I mention that Singapore law already declares that information shall not be denied legal

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effect, validity or enforceability solely on the grounds that it is in the form of an electronic record. In fact, even where a law requires information to be in writing, an electronic record will satisfy that requirement if the information is accessible for reference.

Seventh, an automatic review of the limits of liability under the Convention by the International Civil Aviation Organisation (ICAO), at five-yearly intervals. This will be based on the inflation factor of the States whose currencies comprise the SDR and keep the compensation amounts commensurate with the times.

Sir, Singapore should accede to the Montreal Convention, so as to bring about improved protection and benefits for passengers, baggage and cargo for international carriage on Singapore carriers. More importantly, passengers will then have access to the less complicated and higher compensation regime that the Montreal Convention now offers them.

Currently, the Warsaw Convention 1929, as amended by the Hague Protocol 1955 and the Montreal Protocol No. 4, 1975, are given effect in Singapore through the Carriage by Air Act. This Act will continue to apply in relation to any international carriage by air between Singapore and any other country which is a party to the Warsaw Convention as so amended, and which has not yet ratified the Montreal Convention 1999.

Mr Deputy Speaker, Sir, this Bill gives effect to the Montreal Convention 1999. The provisions of the Bill and the Montreal Convention 1999 will apply in relation to any international carriage (as defined in Article 1 of the Convention) by air between Singapore and any other country that is a party to the Montreal Convention 1999. The exception will be in relation to

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any rights or liabilities arising out of an occurrence before the commencement of the Act.

Sir, I will just highlight some of the key aspects of the Bill.

The Bill provides for the Montreal Convention 1999 (the text of which is set out in the Schedule) to have the force of law in Singapore and the other clauses in the Bill supplement the provisions of Montreal Convention 1999.

The Bill allows for the Act to be updated whenever any review of the limits of liability in the Montreal Convention 1999 result in an amendment to those limits.

The Bill allows for the making of regulations to:

(1) prescribe the terms of insurance that a carrier must maintain to cover its liability under the Montreal Convention 1999;

(2) apply the provisions of the Montreal Convention 1999 (with the necessary exceptions, adaptations and modifications) to international carriage by air that is not governed by it; and

(3) require carriers to make advance payments.

The Bill includes two minor amendments to the Carriage By Air Act:

Firstly, section 4 of the Carriage By Air Act is amended to obviate the need for an order to be gazetted just to provide the updated list of the High Contracting Parties to the Warsaw Convention and its relevant Protocols. Such a list is now available on ICAO's official website.

Secondly, section 8(5) of the Carriage By Air Act is deleted as it is no longer necessary.

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Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Raymond Lim Siang Keat].

Bill considered in Committee; reported without amendment; read a Third time and passed.