CARGO CLAIMS

Content
What is Cargo claim
Types of claims
i. Claims for Shortlanding
ii. Claims for Partial Loss/Damage
. Right to cargo claims
. Time limit
. Limitation of liability
. Custom Duty
. Prevention of loss of/damage to
cargo
What is Cargo claim ?
A Cargo claimis a legal demand by
a shipper or consignee to a carrier
for financial reimbursement for a loss
or damage of a shipment.
Cargo claims are also known as
shipping claims, Freight claims,
transportation claims, or loss and
damage claims.
Types of claims
Claims for shortlanding
Claims for partial loss/damage
Claims for shortlanding
Incase of missing packages:
Forwarding agent has to write a report
to the shipping company, enquire and
lodge formal claim.
Tracing out packages by sending tracers
to all the ports of call of the vessel.
Port authorities will act as bailees and
will deliver goods to consignee after
collecting dues.
 Cont..
Port authorities issues tally sheets and remarks
list.
Tally sheets contains: Quantity of Cargo
Landed.
Remarks list contains: Condition the cargo
landed.
If the missing packages are not traced, the
missing goods will be out-turned as
shortlanded.
Port authorities issues Shortland certificate to
forwarding agents.
Consignee submits the following
documents to the shipping company
in respect of short landing.

Claim bill (4 copies) for c.i.f value of

short landed packages.
Invoice showing c.i.f value, packing
list, if necessary
Short landing certificates, and
Bill of lading.
2nd. Claims for Partial loss or damage
Consignment if found defective:
Shipping company is request to hold the ships
survey as applied by the consignee or his
clearing and forwarding agent.
Ships survey will be granted if a survey is
sought within 3 days from the date of landing.
Must be surveyed within the customary time
limit (2 weeks).
Surveyors visits docks, survey the goods and
issues survey report.
Copy of it will be given to consignee/ his
clearing and forwarding agent.
 Cont..
The surveyors will investigate and
determine:
a) The cause,
b) Nature , and
c) Extent of damage or loss.
) Consignee/ his clearing and forwarding agent
clear the goods and submit the shipping
company a claim for partial loss/damage.
) Refunds to be claimed within six months.
Along with the claim bill (4 copies)
other documents to be submitted are:

A. Invoice showing c.i.f value

B. Bill of Entry;
C. Copy of Ships Survey Reports;
D. Bill of lading,
E. Letter of Subrogation if claimed by
underwriters.
Who has the right to cargo
claims?
The endorsee of the B/L, the innocent
holder for value, acquires rights to
sue direct under the contract of
carriage evidenced by the B/L. The
cargo claimant must establish a
prima facie case of loss or damage
within the period of carriage, i.e. the
loss or damage took place while the
goods were in the care of the carrier.
The limit
Under the Indian Carriage of Goods by Sea Act,
1925, claims are to be settled within 1 year
from the date of landing.
If not settled the claims become statutorily
time-barred.
If a suit is to be filed against the carrier in a
Court of Law, it should be done within one-
years time limit.
In actual practice, cargo claimants apply in
writing to the shipping company, seeking
suitable extension of the time limit till the
claims are finally disposed of.
Limitation of Liability
In accordance with the Indian Carriage of
Goods by Sea Act, unless the value and nature
of the goods are declared and inserted in the
B/L, before the goods are shipped, liability of
the carrier is limited to 100 Pounds Sterling per
package or unit or the equivalent of the sum in
another currency.
In a recent judgement, Hobhouse J. held, the
figure 100 Pounds in the Hague Rules referred
not to 100 Pounds in todays money but to 100
Pounds Sterling gold value in 1924.
Custom duty
The Customs Act 1962 stipulates that
duties of the Custom shall be levied
on dutiable goods at such rates as
may be specified under the Customs
Act.
Custom duty has to be paid on
dutiable goods imported into India
Prevention of loss of/damage to
cargo
Carrier has to know the
characteristics, nature and behavior
of the cargo for stowage.
Documentation, which exposes the
cargo to the risk of theft, is also a
major contributor to cargo loss.
Accurate checking of the cargo
against the shipping documents
should be maintained.
Suggestions made to reduce the
losses:
Packing the goods in best possible
way.
Marking the package
Strict supervision and careful
handling of the cargo
Proper stowage and carriage of cargo
during the voyage
Proper tallying of cargo
Thank You