The Nagpur bench of the Bombay High Court has recently dismissed a $31 million appeal filed by New India Assurance Co. and four other insurers of IndiGo against Janus Aviation Pvt., a ground handling company.
The appeal sought recovery of damages for an incident involving an IndiGo aircraft at Nagpur Airport, claiming negligence by Janus Aviation.
The insurers' suit was for recovery, stating they had compensated IndiGo for the damage caused to one of its aircraft at Dr. Babasaheb Ambedkar International Airport on May 26, 2018. The incident occurred when a passenger step ladder belonging to Janus Aviation was blown by strong winds, striking the aircraft and causing significant damage while passengers were onboard.
The insurers, who had provided coverage under an "Airline Hull" and "Aviation Hull Deductible Insurance" policy, argued that Janus Aviation was liable for the losses due to its failure to secure its equipment during the storm.
After an investigation by McLarens Aviation, the loss adjusters for the insurers, a series of back-and-forth followed between the insurers and Janus Aviation.
The insurers ultimately issued a legal notice to Janus Aviation in Jan 2020, seeking compensation for the damages, but the handling company did not acknowledge liability, leading to the lawsuit.
During the court proceedings, a key issue raised was the lack of a direct contractual relationship (privity of contract) between IndiGo and Janus Aviation. The court found that the the insurers could not demonstrate a commercial or contractual relationship with Janus under the insurance policies.
As a result, the court ruled that the case did not meet the criteria of a "commercial dispute" as defined under the Commercial Courts Act of 2015.
The court upheld the earlier ruling, agreeing with the Janus' objection that no privity of contract existed between the insurers and Janus Aviation, dismissing the appeal and finding no legal grounds to challenge the prior decision.
With this ruling, the insurers' attempt to recover $31 million in damages from Janus Aviation was denied by the court.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
