Cargo Claims for Loss, Damage and Short Delivery

Cargo arriving wet, damaged or short can cause substantial losses for importers and exporters. Recovering those losses requires prompt action, reliable evidence and a clear understanding of the applicable contract and law. A cargo claim should therefore be assessed as soon as the loss is discovered.

The applicable legal framework

The Burma Carriage of Goods by Sea Act, 1925 incorporates Hague Rules-based provisions in its Schedule. Section 2 gives those Rules effect, subject to the Act, in relation to shipments from a port in Myanmar to another port, whether within or outside Myanmar. Article I(b) addresses contracts covered by a bill of lading or similar document of title, while Article I(e) defines the carriage period as loading onto the ship through discharge.

For cargo shipped from a foreign port to Myanmar, the 1925 Act should not be assumed to apply automatically merely because Myanmar is the destination. The bill of lading, applicable mandatory law and any governing law or dispute resolution provisions require separate examination.

The duties of the carrier

Under Article III, Rule 1, the carrier must exercise due diligence before and at the beginning of the voyage to make the ship seaworthy, properly man, equip and supply it, and make cargo spaces fit and safe for receiving, carrying and preserving the goods. Article III, Rule 2 requires proper and careful loading, handling, stowage, carriage, custody, care and discharge, subject to Article IV.

Cargo damage does not automatically establish liability for the full invoice value. Article IV, Rule 2 contains exceptions, including loss arising from inherent defects in the goods or insufficient packing. Whether an exception applies depends on the facts and evidence. Article IV, Rule 5 also provides for limitation of liability, subject to its terms, including provisions concerning declared nature and value.

Preserving evidence

On receipt, record the condition of the cargo, packaging, container and seal. Note visible damage or shortages on delivery records and arrange a joint inspection or independent survey where appropriate. Preserve the bill of lading, invoice, packing list, delivery records, photographs and correspondence. Depending on the cargo, temperature logs, tally records and weight records may help establish when and how the loss occurred.

Notice requirements and the time limit for suit

Where the scheduled Rules apply, Article III, Rule 6 generally requires written notice of the loss or damage and its general nature to the carrier or its agent at the discharge port before or at removal of the goods into the custody of the person entitled to delivery. If the damage is not apparent, notice must be given within three days of removal. Separate written notice is unnecessary where the condition of the goods was jointly surveyed or inspected at receipt.

Failure to give notice does not by itself extinguish the claim. Instead, removal becomes prima facie evidence that the carrier delivered the goods as described in the bill of lading. This notice requirement must be distinguished from the time limit for suit.

Article III, Rule 6 provides that the carrier and ship are discharged from liability for loss or damage unless suit is brought within one year after delivery, or the date when delivery should have taken place. Sending a claim letter or continuing negotiations should not be treated as stopping that period. Any contractual arbitration requirement and the steps needed to preserve the claim should be addressed promptly.

Cargo claims assistance from ILPC

Before pursuing a claim, identify the party entitled to claim, the contractual carrier, the available evidence and the proper forum. ILPC provides legal advice and assistance with cargo claims, negotiations and dispute resolution. Contact ILPC with the relevant shipping documents to discuss the applicable law, deadlines and available options.