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Published : 31 Jan 2026, 02:51 PM
A court in Nepal has ruled that Bangladeshi carrier US-Bangla Airlines is subject to unlimited liability for passengers killed in a plane crash at Kathmandu airport in 2018.
It is the first time in Nepal’s aviation history that a court has held an airline liable beyond internationally prescribed compensation limits, according to The Kathmandu Post.
The crash occurred on Mar 12, 2018, when a scheduled US-Bangla flight from Dhaka veered off course while attempting to land at Tribhuvan International Airport in Kathmandu. The 76-seat Bombardier Dash 8 Q400 aircraft burst into flames on impact, killing 51 of the 71 people on board.
Among the dead were 22 Nepali nationals, 28 Bangladeshis and one Chinese citizen. The disaster remains the deadliest aviation accident involving a Bangladeshi airline.
LIABILITY BEYOND INTERNATIONAL LIMITS
In its ruling, the Kathmandu District Court said passengers are entitled to compensation under the limited liability provisions of the 1929 Warsaw Convention and its 1955 Hague amendment, which govern international air travel. Article 22 of the convention sets standard compensation limits.
However, the court went on to rule that US-Bangla Airlines was subject to unlimited liability under Article 25 of the amended convention, after concluding that the crash was caused by negligence and reckless conduct by the pilot and flight officer.
The accident cannot be confined within the prescribed liability limits, the court ruled.
Judge Diwakar Bhatta delivered the ruling on Jul 20, 2025, in a case brought by the families of 16 dead passengers and one survivor. The full verdict was made public on Jan 20.
“Considering the nature and circumstances of the accident, the airline incurs unlimited liability for such negligent or reckless conduct,” the judgment stated.
The court said that where unlimited liability applies, compensation must take account of victims’ personal and social circumstances. In cases of death, it said, both direct and indirect losses suffered by dependants must be considered.
The ruling noted that liability limits do not apply under Article 25 of the Warsaw Convention if damage results from acts carried out “with intent to cause damage or recklessly and with knowledge that damage would probably result”.
Similar provisions exist under Article 21(2) of the 1999 Montreal Convention, which places the burden on airlines to prove the absence of negligence when unlimited liability is claimed.
The court cited the 1981 UK case Goldman v Thai Airways International Ltd, in which English courts interpreted “wilful misconduct” to include intentional or subjectively reckless conduct, including deliberate violations of safety rules.
COMPENSATION ORDERED
The court ordered Dhaka-based US-Bangla Airlines to pay full compensation to affected families. Excluding the standard $20,000 already paid per family by insurers, the airline was directed to pay a further $2.74 million (378.6 million Nepali rupees) to 17 families.
The ruling has been described by The Kathmandu Post as a legal milestone. Nepal has recorded around 70 air crashes over the past seven decades, resulting in nearly 1,000 deaths, but until now no airline had been held financially accountable by the courts.
After seven years of litigation, the court concluded that the airline was guilty of “gross negligence” for failing to operate the aircraft in accordance with required standards.
AIRLINE'S ARGUMENTS REJECTED
US-Bangla Airlines argued that it had already paid compensation in line with international conventions, including $20,000 per family in 2019 without admitting liability. It also said it had paid $50,000 to the heirs of 25 Bangladeshi victims under Bangladeshi law.
The airline further argued that Nepali courts lacked jurisdiction, claiming the flight’s final destination was Dhaka, and that compensation under Nepali law was capped at $20,000.
The court rejected these arguments, ruling that the plaintiffs had legal standing as relatives of the deceased and as Nepali citizens.
It held that under Article 28 of the Warsaw Convention, lawsuits may be filed at the place of destination, and that Nepal was the destination in this case because the victims had travelled to Bangladesh for study and were returning on round-trip tickets.
Treating both the departure and destination as Dhaka is not justified, the court said. “Nepal was the destination of the deceased, and filing the case before a Nepali court cannot be considered to be without jurisdiction.”
The court also cited Nepal’s constitution and civil procedure laws, noting that the crash occurred at Kathmandu airport and that rescue and investigation activities took place there.
SURVIVOR TESTIMONY AND FINDINGS
Survivor testimony played a key role in the case. One survivor, Dr Samira Byanjankar, told the court she had filed the lawsuit after failing to receive adequate compensation, saying victims deserved justice under national and international law.
Another survivor, Sanam Shakya, testified that despite normal weather conditions, the aircraft repeatedly circled at low altitude before crashing. She said the captain was smoking in the cockpit, failed to make landing announcements and did not follow standard procedures.
Analysis of the flight data recorder and cockpit voice recorder found no technical faults, according to the court. Instead, it cited evidence of pilot fatigue, mental stress, confusion during landing, violations of operating procedures and impaired decision-making.
On that basis, the court ruled that the crash was the result of recklessness and negligence, making the airline fully liable.
Among those killed was MBBS student Neega Maharjan, who was nearing completion of her studies. Her family was awarded compensation totalling 262.45 million rupees, covering education costs, funeral expenses, legal fees, non-economic damages and loss of future income.
Families of seven MBBS students were each awarded about $170,382, while six other student families were awarded $179,418 each, excluding insurance payments.
The court also awarded compensation to the families of other victims, including a Himalaya Airlines employee, a neurosurgeon and a retired nurse. Survivor Dr Byanjankar was awarded $44,290 for serious injuries.
At the time of the crash, US-Bangla Airlines had insurance cover of $107 million, including $100 million for passenger liability, underwritten by two Bangladeshi insurers.
Many families initially considered accepting an early settlement offer of $50,000 to avoid prolonged litigation, but ultimately rejected it in pursuit of what they described as fair and just compensation.
In concluding its ruling, the court said the crash of an otherwise airworthy aircraft was caused entirely by the airline’s wilful misconduct and gross negligence, including the pilot’s questionable mental state.
