What are the limits of the carrier's liability in sea transport?

In the previous article we looked at the details of the contract of carriage by sea. Today we will go deeper into the principles relating to the carrier. We will learn about the carrier's liability, its duration and the limits of the carrier's liability.

What is the carrier?

As we also discovered when looking at the contract of carriage by sea, one of the parties is the carrier.

The carrier is any person by whom (or in whose name) a contract of carriage of goods by sea has been concluded with a shipper.

The carrier's liability

1. Period of responsibility

The carrier's responsibility for the goods covers the period during which the goods are in its charge at the port of loading, during the carriage and at the port of discharge.
The goods are therefore deemed to be in the carrier's charge:

• from the time it takes them over from:
  i) the shipper or a person acting on the shipper's behalf;
  ii) an authority or other third party to whom the goods must be handed over for shipment;
• until the time the carrier delivers the goods:
  i) by handing the goods over to the consignee;
  ii) in cases where the consignee does not receive the goods from the carrier, by placing them at the disposal of the consignee;
  iii) by handing the goods over to an authority or a third party

2. Basis of liability

The carrier is liable for loss resulting from loss of or damage to the goods, or from delay in delivery. This holds if the occurrence took place while the goods were in its charge. It also applies if the carrier does not prove that it, its servants or its agents took all the measures that were required.

Delay is deemed to occur when the goods have not been delivered at the port of discharge provided for in the contract within the agreed time.

The person entitled to make a claim for the loss of the goods may treat them as lost if they have not been delivered within 60 consecutive days following the expiry of the time for delivery.

The carrier is liable:

• for loss of, damage to or delay in delivery of the goods caused by fire.
• for loss of, damage to or delay in delivery of the goods which the claimant proves resulted from the fault of the carrier, its servants or its agents

If a fire on board the ship affects the goods and the claimant or the carrier so wishes, a survey report will be drawn up. A copy of the report will be made available to the carrier and to the claimant.

In the case of the carriage of live animals, the carrier is not liable for loss, damage or delay in delivery. These result from the special risks inherent in that kind of carriage.

The carrier is not liable where the loss, damage or delay in delivery arose from measures taken to save human life or from reasonable measures taken to save property at sea.

Where the fault or neglect of the carrier, its servants or its agents combines with other causes to produce loss, damage or delay in delivery, the carrier is liable only to the extent that these are attributable to such fault or neglect, provided that it proves the amount.

General average

All the parties with a financial interest in a maritime adventure pay compensation to the party that has suffered an intentional loss or incurred expenses in order to allow the voyage to be completed.

The limits of the carrier's liability

The carrier's liability for loss resulting from loss of or damage to the goods is limited to an amount equivalent to 835 SDR per package or other shipping unit, or to 2.5 SDR per kilogram of gross weight of the goods lost or damaged, whichever is the higher.

For delay in delivery, liability is limited to an amount equivalent to two and a half times the freight payable for the goods concerned. This will not exceed the total freight payable under the contract of carriage of goods by sea.

For the purpose of calculating which amount is the higher, the following rules apply:
a) where a container, pallet or similar article of transport is used to consolidate goods, the packages or other shipping units listed in the bill of lading, or in any other document evidencing a contract of carriage by sea, are deemed to be packages or shipping units. Except as mentioned above, the goods in such an article of transport are deemed to be a single shipping unit.
b) where the article of transport itself has been lost or damaged, it is considered a separate shipping unit if it is not owned by the carrier or otherwise supplied by the carrier.

Loss of the right to limit liability

The carrier is not entitled to the benefit of the limitation of liability set out above if it is proved that the loss, damage or delay in delivery resulted from an act of the carrier done either with the intent to cause such loss or recklessly.

A servant or agent of the carrier is not entitled to the benefit of the limitation of liability if it is proved that the loss, damage or delay in delivery resulted from an act of that person, done either with the intent to cause such loss or recklessly.

Goods carried on deck

The carrier is entitled to carry the goods on deck only if the carriage is performed on the basis of an agreement with the shipper. This will be in accordance with the usage of the particular trade.

If the carrier and the shipper have agreed that the goods will be carried on deck, the carrier must insert a statement to that effect in the bill of lading or in any other document evidencing the contract of carriage by sea. In the absence of such a statement, the carrier has the burden of proving that an agreement for carriage on deck was entered into. The carrier is not, however, entitled to invoke such an agreement against a third party, including a consignee, who has acquired the bill of lading in good faith.

If the goods have been carried on deck or the carrier cannot invoke an agreement for carriage on deck, it is liable for loss, damage or delay in delivery resulting solely from the carriage on deck. The extent of its liability will be determined in accordance with the provisions on the Limits of liability or on the Loss of the right to limit liability, as the case may be.

Carriage of goods on deck contrary to an express agreement for carriage under deck is deemed to be an act or omission of the carrier.

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