I am desperately in need of your advice.

Me, I don't know oo. Sowiee

Vicjustice:
You can't sue them over a missing luggage (especially when you are using the economic class ticket).
The possibility of such losses is in the terms & conditions that you agreed to during your ticket purchase: this is why they recommend you buy a travel insurance

Is this inline with the ICAO requirements of Airlines? I doubt hence I strongly disagree with your opinion.

This incidence does happen, so if everyone should sue airline companies over lost luggage, every company will be in bankruptcy. Remember that there is usually no proof or evidence to support a claim of missing luggage therefore, what the terms and conditions say is, you may be refunded your luggage or ticket fee in the event of such loss, and there are usually the maximum allowable payment for compensation, it is only when the airline fails to comply with these regulations that law suit is appropriate