Court orders unlimited liability in US-Bangla plane crash, Families of 17 victims to receive additional Rs 380 million

KATHMANDU: A landmark decision by the Kathmandu District Court has ruled that unlimited liability insurance applies in the 2018 US-Bangla Airlines crash at Tribhuvan International Airport, concluding that the disaster resulted from human negligence rather than mechanical failure. The verdict paves the way for the families of 17 deceased victims to receive nearly Rs 380 million in additional compensation from the airline.

The crash occurred on March 12, 2018 (28 Falgun 2074 BS) when a US-Bangla Bombardier aircraft arriving from Bangladesh lost control during landing at Kathmandu’s international airport.

The accident killed 45 people on the spot and two more during treatment, bringing the civilian death toll to 47. Four crew members also died in the crash.

At the time of the accident, neither Nepal nor Bangladesh was a signatory to the Montreal Convention, which governs modern international air passenger liability. Compensation therefore fell under the older Warsaw Convention of 1929, which sets a basic liability ceiling of USD 20,000 per deceased passenger.

However, the convention allows claims of unlimited liability if an accident is proven to have resulted from negligence by the airline, aircraft operator, or crew.

A government investigation commission had earlier concluded that the crash was caused by pilot error. Building on that finding, families of 17 victims filed petitions at Kathmandu District Court seeking unlimited liability compensation from US-Bangla Airlines.

In a single bench verdict, Judge Dr. Dibakar Bhatt ruled in favor of the plaintiffs, determining that the crash resulted from crew negligence and operational lapses, not technical malfunction.

This ruling is considered the first instance in Nepal’s judicial history where a court decision on an aviation disaster has been grounded primarily in international air law conventions.

Although Nepal’s Civil Aviation (Accident Investigation) Regulation 2014 states that investigation reports cannot automatically serve as courtroom evidence, the court relied heavily on technical data extracted from the aircraft’s Flight Data Recorder (FDR) and Cockpit Voice Recorder (CVR) — commonly known as the “black boxes.”

According to the judgment, expert analysis found no mechanical or technical defects in the aircraft. Instead, cockpit recordings revealed that Captain Abid Sultan was under mental stress and emotional instability during the flight.

The CVR report indicated confusion over approach routing, failure to configure the aircraft properly for landing, and multiple deviations from the airline’s Standard Operating Procedures (SOPs).

The court noted that the captain had not slept adequately the previous night, had only a 15-hour rest window before the flight, and maintained excessive cockpit communication, including direct interaction with Air Traffic Control that increased workload.

These factors, the judgment states, led to fatigue, impaired judgment, and poor decision-making during a critical landing phase. Both the captain and the first officer failed to exercise the caution expected of trained professionals.

Citing Article 25 of the Hague-amended Warsaw Convention (1955), the court stated that liability limits do not apply where damage results from reckless conduct or negligence by airline personnel.

It also referenced Article 21(2) of the Montreal Convention (1999), which similarly allows unlimited compensation where accidents stem from wrongful acts or omissions by airline representatives. The court observed that the legal principles regarding limited and unlimited liability under both conventions are fundamentally consistent.

The judgment clarified that airlines can only rely on limited liability if they prove the accident did not arise from their negligence or that of their agents. In this case, that threshold was not met.

As a result, the airline must now pay an additional NPR 380 million beyond the standard compensation.

Breakdown of compensation awards includes:

Family of Dr. Balkrishna Thapa: NPR 39.5 million

Heirs of Shweta Thapa, Sanjay Poudel, Purnima Lohani, Eljina Baral, Charu Baral, and Saruna Shrestha: NPR 27.49 million each

Heirs of Niga Maharjan, Anjila Shrestha, Sanjay Maharjan, Asna Shakya, Shriya Jha, Princey Dhami, and Mili Maharjan: NPR 26.24 million each

Family of Prasanna Pandey: NPR 17.5 million

Heirs of Gyanikumari Gurung: NPR 9 million

Injured survivor Dr. Samira Byanjankar: NPR 6 million

Victims’ families had originally filed the compensation case in 2019 (2076 BS). The full text of the judgment, based on the Warsaw Convention framework, has now been made public after nearly four years of legal proceedings.

The ruling sets a significant legal precedent for aviation liability in Nepal, reinforcing that airlines operating international flights into the country may face unlimited financial exposure where operational negligence is established.