Introduction
The carriage of goods by sea forms the backbone of international trade. To balance the interests of shipowners and cargo owners, the Merchant Shipping Act, 1958 works alongside the Carriage of Goods by Sea Act (COGSA), which incorporates the Hague Rules. These laws define the responsibilities, rights, and liabilities of carriers during the transportation of cargo.
Meaning of Carriage of Goods by Sea
Carriage of goods by sea refers to the transport of cargo under a contract of carriage, usually evidenced by a bill of lading or similar transport document. The carrier may be the shipowner or a charterer who enters into the contract with the shipper.
COGSA applies to contracts for the carriage of goods by sea from Indian ports to foreign ports and, in certain cases, to domestic coastal trade.
Duties of the Carrier Before and at the Beginning of the Voyage
Before and at the commencement of the voyage, the carrier must exercise due diligence to make the ship seaworthy. This includes ensuring that the hull, machinery, and equipment are in proper condition, that the ship is properly manned, and that cargo spaces are fit and safe for the reception and carriage of goods.
Failure to exercise due diligence makes the carrier liable for resulting loss or damage.
Proper Care and Carriage of Cargo
During the voyage, the carrier must properly and carefully load, handle, stow, carry, keep, and discharge the goods. Cargo must be protected from damage caused by improper stowage, exposure, or neglect.
The carrier is not, however, an absolute insurer of the goods and is liable only when loss or damage results from failure to meet statutory duties.
Rights and Immunities of the Carrier
COGSA provides carriers with certain defenses and exemptions from liability. These include loss or damage caused by perils of the sea, act of God, act of war, fire (unless caused by actual fault), acts of public enemies, quarantine restrictions, and inherent vice of the goods.
Errors in navigation or management of the ship are also recognized defenses under the Hague Rules, provided the carrier has exercised due diligence regarding seaworthiness.
Limitation of Liability
The carrier’s liability is limited to a specified amount per package or unit, unless the nature and value of the goods have been declared by the shipper before shipment and inserted in the bill of lading.
This limitation protects carriers from excessive claims while allowing shippers to declare higher value when needed.
Bill of Lading: Legal Effect
The bill of lading serves three important functions. It is a receipt for the goods shipped, evidence of the contract of carriage, and a document of title. The carrier is bound by the description of goods stated in the bill of lading unless a valid reservation is made.
Statements in the bill of lading are prima facie evidence against the carrier in legal proceedings.
Responsibilities of the Shipper
The shipper is responsible for the accuracy of cargo description, marks, number, quantity, and weight. Any loss suffered by the carrier due to incorrect or misleading information must be indemnified by the shipper.
The shipper must also ensure that dangerous goods are properly declared and packaged. Failure to do so may make the shipper liable for resulting damage.
Dangerous Goods
When dangerous goods are shipped without proper disclosure, the carrier may land, destroy, or render them harmless without compensation. The shipper remains liable for all damages and expenses arising from such shipment.
Even when declared, dangerous goods must be handled and stowed in accordance with safety regulations.
Time Bar for Claims
Claims for loss or damage must be brought within one year from the date of delivery of the goods or the date when the goods should have been delivered. Failure to bring a claim within this period extinguishes the right to compensation.
Jurisdiction and Legal Proceedings
Legal proceedings under COGSA must be initiated in competent courts. Jurisdiction may be determined by contractual clauses, provided they are not contrary to statutory provisions or public policy.