The carrier shall hold liability for losses or damages that are incurred to the goods during the timeline running from the receipt of goods thereof at the loading port till the time of delivery to the person entitled thereto at the discharge port. The holder of a bill of lading would be entitled to sue for loss or damages to the cargo. However, the title to sue on an order bill of lading would be on the endorsee and the named party in the case of a named bill of lading.
Governing laws in the UAE
Under UAE Maritime Commercial Law (for short ‘the law’) the bill of lading is considered valid evidence of a contract of carriage. Article 278 of the Law provides that any condition in a bill of lading attempting to exempt or reduce the carrier’s responsibility for loss caused, contrary to the provisions in the law is void. The law specifically provides for the liability of the carrier stating that the carrier shall not argue contrary to terms of the bill of lading against the consignee who must be an innocent third party and is not a party to the bill of lading between shipper and carrier.
Liability of the carrier
Article 275 of the law provides the circumstances where the carrier will be held liable or exempted from liability due to the damages sustained during the time of delivery to the port of discharge. The general rule says that the carrier will be held liable for damages sustained except for the conditions and circumstances mentioned below.
The carrier holds liability for losses or damages that shall result from the damages to the goods and delivery of the goods, as mentioned above. If there may be a delay in the delivery of goods at the port, the carrier shall be liable to deliver the goods on time as mentioned and agreed upon by and between the parties to the contract.If there is no such agreement or contract then the goods shall be delivered within the reasonable time that is required of a diligent carrier. The person claiming the loss of the goods may consider that the goods have been lost if the same has not been delivered for 60 consecutive days.
Exemption from liability
The liability exists unless established that said damages or destruction arose from the following causes:
- The carrier shall act with due diligence to put the vessel in a seaworthy state and equip it properly with men and provisions;
- The carries need to prepare the holds, cold rooms and other parts of the vessel to receive, transport and preserve the goods;
- He shall exert due diligence in the loading, stowing, stacking, arranging, transporting, preserving, unloading and delivering of goods;
- Errors in the navigation or management of the vessel done by the master, crew, pilot or other maritime subordinates;
- Fire breaks out unless the same occurs through the carrier in any way;
- Sea dangers or other navigable waters, or dangers or incidents thereof;
- Unavoidable conditions include Acts of God; war incidents; acts of public enemies; any detention or constraint by a power, State, people or judicial arrest; quarantine restrictions; etc.
- Any loss or damage caused due to strikes or layoffs, etc.;
- Civil unrest and commotions;
- Act or omission of the shipper or owner of goods, or the agent or representative thereof;
- Lack in volume or weight or any other lack arising from a latent defect, the nature of the goods, or any defect inherent therein;
- Improper packaging or marking of the goods;
- Rescue or attempted rescue of persons or property at sea;
- Non-discoverable latent defects by ordinary examination;
- Any deviation from a course during the rescue or the attempt to rescue persons or property at sea, or any other deviation for a reasonable cause; or
- This may also include any other cause that has not arisen due to the failure of the carrier, the persons working under him or the representative thereof.
Burden of proof
The burden of proof shall lie on the person who is alleging such cause to show that no failure on their part is instrumental in causing such losses or damages.
The shipper may prove that losses or damages arise from the failure of the carrier or the persons working under him, in a manner not related to the navigation or management of the vessel.
The most confusing type of claim includes cargo claims that are made by the parties to the contract of carriage. Parties to the contract making claims are unaware of both the legal and practical reasons associated with it and the international legal implications when doing so.
It must be noted that any failure in the cargo claims systems can cause prejudice to the economies of countries from fulfilling their basic function of promoting trade. Our legal team has been advising carriers and other parties on their business activities, liabilities, exemptions, etc.