Journal of Air Law and Commerce Volume 85 Issue 4 Article 2 2020 Liability for the Death of Aircraft Passengers in Indonesia Simon A. Butt University of Sydney, [email protected] Tim Lindsey University of Melbourne, [email protected] Follow this and additional works at: https://scholar.smu.edu/jalc Recommended Citation Simon A. Butt et al., Liability for the Death of Aircraft Passengers in Indonesia, 85 J. AIR L. & COM. 573 (2020) https://scholar.smu.edu/jalc/vol85/iss4/2 This Article is brought to you for free and open access by the Law Journals at SMU Scholar. It has been accepted for inclusion in Journal of Air Law and Commerce by an authorized administrator of SMU Scholar. For more information, please visit http://digitalrepository.smu.edu. LIABILITY FOR THE DEATH OF AIRCRAFT PASSENGERS IN INDONESIA SIMON BUTT* TIM LINDSEY** I. INTRODUCTION N OCTOBER 29, 2018, Lion Air Flight 610 crashed into Othe Java Sea off the coast of Jakarta, the capital of Indone- sia, thirteen minutes after take-off.1 All 189 passengers and crew members died.2 The route was domestic, from Soekarno-Hatta Airport in Jakarta to Depati Amir Airport in Pangkal Pinang, on the east coast of Banka Island.3 The aircraft was a Boeing 737 MAX 8.4 The decedents’ families sought compensation for their losses and engaged lawyers to sue The Boeing Company (Boe- ing).5 Some of this litigation was commenced in the United States, where Boeing is headquartered.6 During the course of the U.S. litigation, lawyers for Boeing questioned whether the * Professor of Indonesian Law, The University of Sydney Law School. ** Redmond Barry Distinguished Professor, Malcolm Smith Professor of Asian Law, and Director of the Centre for Indonesian Law, Islam and Society at the University of Melbourne. 1 Sinead´ Baker, This Timeline Shows Exactly What Happened on Board the Lion Air Boeing 737 Max that Crashed in Less than 13 Minutes, Killing 189 People,BUS. INSIDER (Oct. 29, 2019, 12:11 PM), businessinsider.com/lion-air-crash-timeline-boeing- 737-max-disaster-killed-189-2019-10 [perma.cc/UPU5-JUMQ]. 2 Id. 3 Id. 4 Hannah Beech & Muktita Suhartono, Lion Air Crash Families Say They Were Pressured to Sign No-Suit Deal, N.Y. TIMES (Mar. 21, 2019), nytimes.com/2019/03/ 21/world/asia/lion-air-crash-families-lawsuits.html [perma.cc/XT24-AWKC]. 5 Id. 6 Id.; David Wilma, On this Day: Boeing Moves Corporate Headquarters to Chicago in 2001, KIRO 7 (Sept. 4, 2018, 10:48 AM), kiro7.com/news/local/on-this-day-boe- ing-moves-corporate-headquarters-to-chicago-in-2001/827067193 [perma.cc/ C27L-UCCZ]. 573 574 JOURNAL OF AIR LAW AND COMMERCE [85 compensation claims should be litigated in Indonesia, where the accident occurred, based on forum non conveniens grounds.7 A U.S. court will need to consider a multitude of factors when determining whether to stay litigation initiated within its juris- diction. Here, the Authors consider two of those factors: (1) In- donesian law governing liability for the death of aircraft passengers for negligence; and (2) how a claim against an air- craft carrier or manufacturer is likely to be resolved by Indone- sia’s courts. The Article begins with a brief description of the Indonesian legal system and the regulatory regime governing li- ability for losses incurred during air travel. The Authors then offer a more detailed account of Indonesia’s civil liability re- gime, focusing on damages for negligent acts and omissions, before analyzing Mahkamah Agung (Supreme Court) decisions involving civil liability for losses related to fatal air crashes. Before addressing these legal issues, the Authors now offer a short background to aviation in Indonesia. Comprising over 17,500 islands spread over 5,150 kilometers east to west, populated by over 270 million people, Indonesia is the largest archipelago in the world.8 Its transport infrastructure depends heavily on a large network of over sixty private air carri- ers (many low-cost), alongside the national flag carrier, Garuda, which is a state-owned enterprise.9 Lion Air carries the most pas- sengers (around 35%), followed by Garuda (around 26%).10 In- donesia’s air travel market is huge: between 2009 and 2014, the number of air passengers increased by over three times, from 27,421,235 to 85,215,879.11 By 2036, the International Air Trans- port Association predicts that 355 million passengers will travel 7 David Gelles, Boeing Aims to Move Victim Lawsuits Abroad, but CEO Says He Is Unaware, N.Y. TIMES (Nov. 10, 2019), nytimes.com/2019/11/10/business/boe- ing-lion-air-lawsuits-indonesia.html [perma.cc/6MXR-UC25]. 8 Indonesia General Information, UNDATA, data.un.org/en/iso/id.html [perma.cc/3RGW-EJ4M]. The population estimate is current as of November 2020. 9 Prasadja Richardianto, Gunawan Djajaputra & H.K. Martono, Air Transport and Tourism in Indonesia, 10 IOSR J. APPLIED CHEMISTRY, May 2017, at 1, 18; Indo- nesia’s Aviation Industry: Flying High,GLOB. BUS. GUIDE INDON. (2017), gbgindone- sia.com/en/services/article/2017/indonesia_s_aviation_industry_flying_high_ 11719.php [perma.cc/3SJF-M2J2]. 10 Indonesia’s Aviation Industry: Flying High, supra note 9. These numbers are current as of 2015. Id. 11 Data: Air Transport, Passengers Carried, WORLD BANK (2018), data.worldbank.org/indicator/IS.AIR.PSGR [perma.cc/2N7T-FQD9]. 2020] LIABILITY FOR AIRLINE DEATHS IN INDONESIA 575 by air in Indonesia, making its commercial transport aviation market the world’s fourth largest.12 Unfortunately, Indonesia seems to have one of the world’s least safe aviation industries. The number of accidents has in- creased significantly since the turn of the century, as aviation fuel prices have surged and competition—particularly among low-cost carriers—has increased, driving maintenance standards down.13 In 2007, Indonesia’s civil aviation head, Budhi M. Suyitno, admitted his country had 3.77 fatal flight accidents for every one million flights, when the global average was 0.25.14 Indonesia’s safety record was, he said, “woeful” and the situation “absolutely unacceptable.”15 From 2007 to 2018, the European Union banned Indonesian airlines over safety concerns16 (al- though Garuda was allowed to enter from 200917), and the United States maintained a similar ban from 2007 to 2016.18 In these circumstances, it could be expected that claims for compensation relating to air fatalities would be common in In- donesian courts and that a sophisticated body of jurispru- dence—one that offers clarity to parties to such litigation regarding potential liability and quantum of damages—might have developed. Unfortunately, research demonstrates that, in fact, the opposite appears to be true. Despite the large numbers of accidents, very few claims for liability for the death of aircraft 12 Rachmadea Aisyah, Indonesia Prepares for Jump in Number of Air Passengers, JAKARTA POST (Feb. 9, 2018, 11:12 AM), thejakartapost.com/news/2018/02/09/ indonesia-prepares-for-jump-in-number-of-airline-passengers.html [perma.cc/ 3C5Y-D8EW]. 13 See Elisa Valenta, Membedah Penyebab Mahalnya Harga Avtur di Indonesia [Dis- secting the Causes of High Aviation Prices in Indonesia], BERITAGAR (Feb. 14, 2019), beritagar.id/artikel/berita/membedah-penyebab-mahalnya-harga-avtur-di-indo- nesia [perma.cc/39KG-WMUS?type=image]. 14 Safety Woeful, Admits Air Chief,SYDNEY MORNING HERALD (Nov. 3, 2007, 1:17 AM), smh.com.au/world/safety-woeful-admits-air-chief-20071103-gdri0f.html [perma.cc/64HC-AE9Y]. 15 Id. 16 FSF Editorial Staff, EU Lifts Ban on Flights by Indonesian Airlines,FLIGHT SAFETY FOUND. (June 14, 2018), flightsafety.org/eu-lifts-ban-on-flights-by-indone- sian-airlines/ [perma.cc/8NGG-FVRC]. 17 Peter Gelling, European Union Lifts Ban on Indonesian Airlines, N.Y. TIMES (July 15, 2009), nytimes.com/2009/07/16/business/global/16air.html [perma.cc/2JZS-N3FU]. In 2009, the European Union ban was amended to allow Garuda to fly to Europe. Id. 18 Indonesia Airlines Cleared to Fly to the United States,ABC NEWS (Aug. 15, 2016, 3:49 AM), abc.net.au/news/2016-08-15/indonesia-airlines-cleared-to-fly-to-us/ 7736642 [perma.cc/9B3V-MX5U]. 576 JOURNAL OF AIR LAW AND COMMERCE [85 passengers have reached Indonesian courts,19 so the legal infra- structure for resolving these claims remains largely untested. Re- sults are, therefore, unpredictable. However, one thing seems clear: damages recovered have been low, particularly in compar- ison with the amounts of compensation available in other juris- dictions.20 A likely explanation is that a reasonable proportion of cases are settled without litigation, with outcomes kept confi- dential. But if these settlements are reached in the shadow of Indonesia’s legal infrastructure, with its limited jurisprudence relating to civil aviation accidents, then the prospect of victims recovering significant compensation is low. II. THE INDONESIAN LEGAL SYSTEM The Indonesian legal system is a member of the “civil law” or “continental law” group of systems found in European countries such as France, Germany, and Holland and their former colo- nies or client states, as opposed to “common law” systems such as those of the United Kingdom and its former colonies or cli- ents, including the United States.21 At the time of its indepen- dence on August 17, 1945, Indonesia inherited Dutch colonial 19 See, e.g., Saiful Bahri v. Boeing, Mahkamah Agung [Supreme Court] Nov. 28, 2017, Decision No. 1797 K/Pdt/2013, Direktori Putusan (Indon.), putusan3. mahkamahagung.go.id/direktori/putusan/feade1d3d3e0f3c720e20cb8d4a9fc05. html [perma.cc/RM3J-2QHN]; Karim v. Boeing, Pengadilan Tinggi Jakarta [Jakarta High Court] Nov. 7, 2014, Decision No. 557/Pdt/2014/PT.DKI (Indon.) (on file with Authors); Andre Adiputra v.