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Mulla & Mulla handles Air India crash claims for reinsurance Cos

Air India
Air India

Mulla & Mulla & Craigie Blunt & Caroe and a UK firm are representing Air India's insurance underwriters in compensating victims of the Air India air disaster, potentially handling claims running to Rs 400 crore ($85m).

Mulla & Mulla partner HD Nanavati is representing India's national reinsurer General Insurance Corporation (GIC) in the claims, while a UK firm is acting for the international reinsurers, which is understood to include Mitsui Sumitomo.

Air India published a notice in national newspapers today offering Rs 10 lakh to the next of kin of every adult victim of the Air India plane crash which killed 158 passengers with only eight survivors.

Air India would pay Rs 5 lakhs for each child below 12 years of age and Rs 2 lakhs for each injured passenger, according to the notice.

These preliminary payments would be adjusted against the final compensation available, which could run to Rs 300 crore as damages and another Rs 100 crore for passenger and cargo compensation claims, insurers have told the Times of India.

Under Article 21 of the Montreal convention, which India joined in June 2009 after passing the Carriage by Air (Amendment Act) 2009, carriers are liable for a maximum of 100,000 special drawing rights (SDR), which is equivalent to $147,000 at today's rates.

Around $20 to $1,400 are payable per kg of luggage.

Bhasin & Co managing partner Lalit Bhasin, who has acted in previous aircraft compensation claims, said: "Generally all these matters are settled on the basis of the maximum liability – the airlines offer the maximum amount. In this case it is equivalent of 100,000 SDR.

"In about 95 per cent of cases, these are all settled with the family members of the deceased passengers."

The payments would fall in their entirety on Air India's insurance companies and their respective reinsurers, explained Bhasin.

Air India's primary insurers for a $24.23m premium were a Reliance General-led consortium, which included IFFCO-Tokio General Ergo Insurance, Bajaj Allianz General Insurance and HDFC General Insurance.

These companies in turn reinsured to GIC and General Mitsui Sumitomo Insurance, which are now handling the claim through their instructed lawyers.

Mulla & Mulla and BLG declined to comment.

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