Lost Cargo in Transportation

Lost Cargo in Transportation

Under Iran’s legal framework, lost cargo is generally treated as a breach of the transportation company’s contractual obligations. Under the Iranian Commercial Code and the Civil Code, a transportation company is obliged to safeguard, care for, and deliver the shipment to the consignee in a complete and sound condition. Any failure in performing this duty, particularly the total or partial loss of the cargo, may give rise to civil liability and the obligation to compensate.

This issue must ordinarily be addressed in the contract of carriage, whether the transport is by road, air, or sea. Where there is no explicit agreement, the company remains bound by statutory rules and established commercial practice to compensate the cargo interests. Pursuant to Article 386 of the Iranian Commercial Code, the carrier is liable for destruction, loss, or disappearance of the goods unless it proves that the loss resulted from force majeure or from the fault of the consignor or consignee. After an incident, the first practical step is to examine the bill of lading or consignment note and the cargo insurance status in order to determine how responsibility is allocated and what remedies are available to the cargo owner.

What Responsibility Does the Transportation Company Bear for Lost Cargo?

Under Articles 386 through 392 of the Iranian Commercial Code, the carrier is responsible for delivering the goods to the final consignee on time, intact, and in full. If the cargo is lost or damaged, the carrier is generally required to compensate, except in limited circumstances such as unforeseeable and unavoidable events that qualify as force majeure, or where it proves that the cargo owner contributed to the loss.

Where the carrier performs through subcontractors, including intermediary freight operators, primary responsibility typically remains with the principal transportation company. The carrier’s responsibility continues until delivery to the consignee. Even where a third party causes the loss, the carrier may not be released from liability unless it proves that the fault lies directly with that third party and that the carrier itself implemented all reasonable safety measures and precautions. These principles are commonly applied by Iranian courts in comparable matters.

What Documents Are Required to File a Claim for Lost Cargo?

To file an effective claim regarding lost cargo, complete and reliable documentation is essential. The most important document is the official bill of lading or consignment note issued by the transportation company, as it evidences that the goods were delivered to the carrier and that the carrier undertook to deliver them to the destination. In addition, the contract of carriage, if available, invoices evidencing the goods’ value, cargo insurance policy, written correspondence or messages relating to the transport, and any receipt proving delivery or substantiating the loss should be attached.

Where the cargo has distinctive characteristics or substantial value, documents evidencing its value are important for calculating damages. If the loss caused consequential damages, such as project delays or loss of commercial opportunity, documents supporting those consequential losses can strengthen the claim. Filing a claim without adequate evidence may result in dismissal or unnecessary delays. For this reason, assembling the full record and following the proper legal procedure is critical.

The Role of Insurance in Lost Cargo Cases

In many cases, transported goods are covered by cargo transportation insurance, arranged either by the transportation company or by the cargo owner. If the cargo is insured, the insurer must indemnify the loss in accordance with the policy terms and within the specified limits. As a practical matter, notice of the incident must usually be given to the insurer within a short period, and in practice, prompt reporting is essential to preserve coverage.

After a claim is opened, the insurer may appoint an expert to assess the circumstances and the amount of loss. Certain exclusions may apply, for example, losses related to war or civil unrest are expressly excluded. Accordingly, careful review of policy wording and timely action after the loss are decisive. Where a dispute arises, claims against the insurer may be pursued through the competent judicial mechanisms, subject to jurisdictional rules.

How Can a Complaint Against a Transportation Company Be Filed?

To pursue a claim against a transportation company for lost cargo, the cargo owner may generally file a civil claim before the General Civil Court with jurisdiction, often the court of the place of contract performance or the defendant company’s domicile, depending on procedural rules. The claimant must submit a formal statement of claim, specify the facts, quantify the damages sought, and attach relevant documents through the electronic judicial services system.

In the statement of claim, it should be stated when the cargo was handed over, what the carrier undertook to do, and what losses resulted from the non-delivery. In certain lower-value matters, the Dispute Resolution Council may have jurisdiction, while higher-value matters are typically heard by the General Civil Court. Where there is evidence of a criminal offense, such as breach of trust or theft, a criminal complaint may also be pursued before the competent prosecutorial authorities. Correctly identifying the legal nature of the claim and the competent forum is often decisive for success.

Is Lost Cargo a Crime?

In ordinary circumstances, lost cargo is treated as a contractual breach or negligence and is addressed through civil and commercial remedies. However, where credible evidence indicates intentional misappropriation, concealment, or bad faith conduct by the company or its personnel, the matter may fall within the criminal domain. Under the Islamic Penal Code provisions commonly invoked in practice for breach of trust, including Articles 673 and 674 as cited, a perpetrator may face imprisonment if the legal elements of the offense are established.

If the cargo is diverted for unlawful gain, or if transport documents are forged, criminal proceedings may be appropriate. Proving criminal intent typically requires strong evidence, such as documentary evidence, witness testimony, or expert findings. Determining whether the case is civil or criminal ultimately depends on the facts and the judicial assessment of intent and causation.

What Should Be Presented Before the Dispute Resolution Council?

Where the monetary value of the lost cargo falls within the jurisdictional threshold of the Dispute Resolution Council, the claimant should submit a clear claim describing the transport timeline, the circumstances of the loss, and the damages suffered. Supporting documents such as the bill of lading, invoice, insurance policy, and correspondence should be attached.

The Council commonly convenes a session with a representative of the transportation company and first attempts to achieve a settlement. If the settlement fails, it issues a formal decision, which may be challenged in court under applicable rules. In valuation disputes, the Council may refer the matter to an official expert, particularly where the parties disagree about the cargo’s value. A well-documented and active presentation increases the likelihood of a favorable outcome, and the Council may issue a decision even in the absence of the opposing party.

How Can Financial Compensation for Lost Cargo Be Recovered?

If the court or the Dispute Resolution Council finds the transportation company liable, the cargo owner may recover financial compensation. Compensation may include the value of the lost cargo, the transport charges paid, and, where proven, consequential losses such as storage costs, loss of commercial opportunity, or contractual penalties.

The claimant should quantify the claim precisely and submit documents supporting the calculation. If the company fails to pay after a final decision, enforcement measures may be pursued through the civil enforcement system, including attachment of assets, bank accounts, and, in appropriate cases, immovable property, subject to applicable enforcement procedures. Accurate and well-supported damage calculation is therefore essential to achieving full recovery.

Timing and Practical Deadlines

While Iranian law may not impose a single uniform deadline for all claims concerning lost cargo, prompt action materially improves the prospects of success. In addition, if the contract of carriage or the bill of lading includes a notice period for objections, such as a requirement to object within a specified number of days after delivery or non-delivery, that timeframe should be respected to avoid procedural obstacles.

Where an insurance claim is intended, timely notice to the insurer is often a condition of coverage. In criminal matters involving theft or breach of trust, limitation periods may differ depending on the legal characterization and severity of the offense. For these reasons, prompt legal assessment is recommended to ensure compliance with relevant deadlines and to preserve evidence.

Legal Advice and the Role of Counsel in Lost Cargo Disputes

Lost cargo matters may become legally complex, making assistance from counsel experienced in contracts and transportation disputes highly valuable. Counsel can prepare pleadings, gather and organize evidence, attend hearings, engage with experts, and pursue enforcement of final decisions. In higher-value cases, transportation companies often rely on specialized legal teams, and the cargo owner may benefit from comparable professional representation to protect its interests.

Where losses are substantial or where the matter involves potential criminal elements, strategic legal representation may be decisive. The cost of counsel is often justified when compared with the risk of reduced recovery or procedural failure arising from an improperly handled claim. A structured legal consultation with a qualified attorney can prevent delay, reduce risk, and support effective enforcement.

Frequently Asked Questions About Lost Cargo in Transportation