High Court increases compensation from Nu 57.36 mn to Nu 168.57 mn in Helicopter Crash case

2026-03-23 - 08:21

On the afternoon of 3rd March 2023, a Druk Air helicopter carrying 42-year-old Gyem Gyeltshen, his wife and their two daughters crashed at around 2.25 pm in Wachey, Lunana. The crash resulted in the death of Gyem’s 38-year-old wife, Dresang Pema, and their four-year-old daughter, Nima Pelden. Gyem, his older daughter, Kinley Pelden, and the pilot, Stefan, survived with injuries. The Final Investigation Report on the crash essentially said the probable cause was human error of the pilot caused by management and relation issues. The investigation found nothing wrong with the engine and machinery of the helicopter. The Thimphu District Court on 29th August 2025 awarded Nu 57.36 million (mn) in economic and punitive damages to Gyem Gyeltshen and his two surviving daughters, Kinley Pelden and Kinley Wangmo, in the Druk Air helicopter crash case. Both parties, that is Gyem Gyeltshen’s lawyer and Druk Air, appealed to the High Court on the case. On 4th February 2026, the High Court increased the amount to Nu 168.576 million (mn) and partly reversed certain aspects of the District Court judgment. The High Court looked at some main issues. Which law applies The first issue was that the question on whether compensation is due under the Penal Code of Bhutan 2004, Road Safety and Transport Authority Act 1999, Civil Liability Act of Bhutan 2023 and Carrier Terms and Conditions 2011. The Druk Air lawyer, in line with the international reinsurance companies, cited local laws like the Road Transport Safety Act and the Bhutan Penal Code to argue that the compensation of a Bhutanese life inclusive of death rituals is Nu 813,000 each. The High Court ruled that the Civil Liability Act of Bhutan 2023, enacted on 24th July 2023, was not in force at the time of the helicopter crash on 3rd March 2023, and is therefore not applicable to this case. The Court said sections 38 and 39 of the Penal Code of Bhutan 2004 use the phrase “at the time of the crime”, making it applicable only to compensation in criminal proceedings, and not for calculating civil compensation as in the present case. The Road Safety and Transport Authority Act 1999, under Section 3(1)(2), applies only to surface transport (vehicle) accidents, and is therefore, not applicable to aircraft accident compensation cases. The Druk Air lawyer also raised the limitations posed by the Carrier Terms and Conditions 2011. Here, the Court said the Carrier Terms and Conditions 2011 which provides Nu 750,000 per passenger aged 12 and above in case of death, Nu 375,000 per passenger under age 12 in case of death is rejected on three grounds. Although helicopter services in Bhutan began in 2015, the compensation limits in these terms were only retrospectively applied to helicopters from June 2023, after the accident, and are therefore, not applicable to this case While both the Civil Aviation Act 2000 and 2016 contain rule-making provisions, neither sets compensation limits for accident-related injuries or deaths. The terms only address death compensation and contain no provision for injury compensation. Therefore, these Terms and Conditions are not accepted as applicable. The Court said that although the legal grounds raised by both claimant and respondent regarding compensation amounts cannot be directly accepted (as both parties argue from self-interest), in the underlying case, Dresang Dema (wife) and Nima Pelden (daughter) died and Kinley Pelden (daughter) suffered serious injuries including a fractured left arm Under Section 5(a) of the Evidence Act of Bhutan 2005, direct evidence exists, and under Section 96.1 of the Civil and Criminal Procedure Code 2001, there is a valid claim for compensation with sufficient prima facie evidence. Although no specific statutory quantum exists, under Section 28.1 of the Civil and Criminal Procedure Code 2001, Courts have discretionary power to assess and determine compensation in the interest of justice. Therefore, despite the claimant himself not being physically injured, given Kinley Pelden’s serious injuries (fractured left arm), deaths of wife and daughter, and presumed severe emotional suffering of the family (even without direct evidence, such suffering is natural in death cases), the Court said compensation shall be awarded as per Section 198 of the Civil and Criminal Procedure Code 2001. If victims are party to the Druk Air insurance The second issue for the High Court was on whether the claimant is entitled to the full liability insurance of USD 20 million (mn) or Nu 1.868 billion ( USD 1 = Nu 93.40) held through reinsurance broker KM Dastur and Company Private Limited with 7 international reinsurers, arranged by RICBL. The Court said that regarding the respondent’s liability insurance of USD 20 mn, which the claimant seeks in full the insurance contract exists between the respondent and the reinsurers. Although the claimant is not a direct party to that contract, the insurance was taken out for the benefit of passengers, and under the general principle of contract law , “a beneficiary of a contract is an exception to privity of contract when a contract is made for the benefit of a third party”, and so the claimant has standing to claim as a third-party beneficiary. Furthermore, the Court said the reinsurance contract specifies that its governing law shall be the Laws of Bhutan. Under Section 212 of the Contract Act of Bhutan 2013, even a non-party to a contract may claim contractual rights if they are a beneficiary of that contract. Therefore, the claimant is entitled to have compensation calculated against the insured amount of USD 20 mn. However, the contract provides insurance of USD 200,000 per passenger, and this amount represents a pre-agreed settlement figure between the contracting parties without litigation. Therefore, the Court said this per-passenger limit of USD 200,000 is not applicable to the present disputed case. Calculation of compensation The court said the claimant accepts that compensation (economic and non-economic) should be calculated on general civil liability principles based on cordyceps prices. However, he disputes the use of the average price of Nu 1,585,252 per kg (based on district-wise comparative pricing) instead of Gasa Dzongkhag’s 2023 average cordyceps price of Nu 2,477,500 per kg. The Dzongkhag Court based compensation on a cross-dzongkhag average cordyceps price of Nu 1,585,252 per kg, with victims claiming 15 years of future harvesting, totaling Nu 57.364 mn. The claimant disputed this and requested calculation based on Gasa Dzongkhag’s 2023 average price of Nu 2,477,500 per kg. The High Court found that since compensation represents future projected earnings, it must be based on a minimum 3-year average rather than a single year. The three-year Gasa Dzongkhag average is Nu 1,959,250 per kg The trial court’s cross-dzongkhag price was rejected as irrelevant to this case (which involves Gasa residents). The claimant’s single-year 2023 price is also rejected. The Court adopted Nu 1,959,250 per kg as the base price. Total compensation The fourth issue was whether it was appropriate to base economic compensation on a 15-year earning period (based on the impermanence of life principle) for cordyceps harvesting years by the Dzongkhag Court. The Dzongkhag Court used 15 years as the earning period based on impermanence of life. The High Court reviewed this and determined that no law specifies using impermanence of life as the basis, compensation must reflect actual earning years, Bhutan’s life expectancy is 72 years and legal adulthood begins at 18 and given the high-altitude location and physical demands, earning capacity up to age 60 is appropriate. Therefore, the Court said that Dresang Dema (wife) died at age 37 and had 23 years to reach 60 and so her compensation is 23 years into Nu 1.959 mn coming to Nu 45.062 mn. Kinley Pelden (daughter), injured and alive, was 12 years at the time of the accident, and though she has 42 years left to reach 60 from when she turns 18, since she is still alive, the compensation is 21 years into Nu 1.959 mn coming to Nu 41.144 mn. Nima Pelden (daughter) died at the age of 2.6 years, and she had 42 years to reach 60 after turning 18 and so her compensation was 42 years into Nu 1.959 mn coming to Nu 82.288 mn. So, the grand total compensation awarded is Nu 168.495 mn (based on Gasa Dzongkhag 3-year average cordyceps price of Nu. 1.959 mn per kg). The total compensation awarded to Gyem Gyeltshen and family is Nu 168.495 mn plus property loss of Nu 81,000 making the grand total of Nu 168.576 mn From the compensation, the Court deducted amounts already paid by the respondent which is funeral rites and medical expenses of Nu 1.158 mn. So, in the final judgment, the compensation to Gyem Gyeltshen and his family is Nu 167.418 mn after deducing the Nu 1.158 mn. Druk Air is ordered to pay this amount to the claimant Gyem Gyeltshen and family within 3 months from the date of the judgment. The High Court did not accept the non-economic and punitive damages of Nu 1.642 mn awarded by the District Court. Both sides have appealed to the Supreme Court with Gyem’s lawyer asking for the full USD 20 mn in damages as covered by the insurance, and Druk Air sticking to Nu 813,000 for each death. Background Two months before the crash, The Bhutanese had published an investigative story in January 2023 on the Royal Bhutan Helicopter Services (RBHSL) which pointed out the mistreatment of Bhutanese helicopter pilots by expat pilots, safety issues being overlooked, break down in relations between the pilots and more. The article warned of a possible crash if nothing was done to improve safety standards. Druk Air did not take any action, and the issues persisted until the crash on 3rd March 2023. Druk Air had an insurance policy with RICBL that covered the helicopter and the passengers. RICBL in turn had reinsured it with 7 mainly international reinsurance companies. Druk Air moved quickly to claim insurance for its lost helicopter at USD 3.4 mn and got it quickly, however, it kept Gyem Gyeltshen in the dark about the passengers’ insurance for almost a year. As per the insurance documents, the insurance companies were supposed to pay USD 200,000 for each death without any litigation, but both Druk Air and the international reinsurance companies kept Gyem in the dark and tried to get him to accept USD 10,000 for each death and sign a waiver form. The insurance also insures Druk Air for legal liabilities going up to USD 20 mn, such as passenger legal liability, aircraft third party legal liability, cargo and baggage legal liability. The Bhutanese exposed this and ran a series of investigative stories on this issue in early 2024. With neither Druk Air nor the international insurance companies budging, on 12th July 2024, farmer Gyem Gyeltshen, through his legal representative, decided to sue Druk Air seeking compensation for the deaths of his 38-year-old wife, Dresang Dema, and daughter, Nima Pelden. He was also seeking compensation for injuries and damages to himself and his other daughter who survived the crash with injuries and much emotional and mental trauma, and loss of cordyceps income. The aim of the lawsuit was to claim economic and punitive damages from the above bigger insurance amount.