Carrier Liability for Cargo in Maritime Transport

Carrier Liability for Cargo in Maritime Transport

Under Iranian commercial principles, the Hamburg Rules, and widely accepted international maritime practice, a shipping company acting as the maritime carrier is generally required to deliver the shipped cargo to the destination in a safe and sound condition and within the agreed timeframe. The carrier’s responsibility covers the custody and preservation of the cargo from the time it is received at the port of origin until it is delivered to the consignee at the port of destination.

If the cargo suffers physical damage, delivery is delayed, or the cargo is lost, the carrier may be obliged to compensate the resulting losses unless it can prove that the damage or loss was caused by circumstances beyond its control, such as force majeure. Where the parties have agreed on specific liability terms, those terms may prevail over general principles to the extent they do not conflict with mandatory rules. If the shipping company fails to comply with carriage obligations or causes damage or delay without a legally acceptable justification, it will be required to pay compensation. Depending on the circumstances and the evidence, recoverable losses may include the value of the cargo, customs-related costs, commercial losses, and, in limited cases, non-material damage recognized.

What Documents Are Required to Claim Compensation From a Shipping Company?

To pursue a successful claim and establish the carrier’s liability, thorough and reliable documentation is essential. The key documents typically include the ocean bill of lading, which is the primary document of title and evidence of the carriage, the contract of carriage or commercial invoice, inspection certificates issued before shipment and after discharge, a survey report assessing the damage, the discharge or delivery record at the destination port, and relevant customs declarations.

Where the cargo loss has been compensated by an insurer, the insurance policy and evidence of payment should also be included to support any subrogated claim or related recovery efforts. In certain cases, correspondence between the cargo owner and the carrier, written notices of protest at the time of delivery, and certifications from port authorities may further strengthen the case. If documentation is incomplete or inconsistent, a court or arbitral tribunal may reject the claim or reduce the amount awarded. Accurate documentation is therefore central to both liability and quantum.

Which Court Has Jurisdiction Over Cargo Damage Claims?

Under the Iranian Civil Procedure framework, jurisdiction is determined by rules governing subject matter and territorial competence. Where the carrier is domiciled in Iran, the public civil court at the carrier’s domicile or the place of delivery may have jurisdiction. If the transport is international and the contract includes a forum-selection or arbitration clause, the parties are generally expected to follow the agreed mechanism.

If no arbitration clause exists and no specific foreign forum is designated in a binding manner, Iranian public civil courts may hear the dispute under general jurisdictional principles. In some domestic disputes, and only where the claim value falls within statutory thresholds, a dispute resolution council may be competent. For regulatory or professional compliance issues involving shipping companies, the Ports and Maritime Organization may also have a supervisory role and may provide technical input, although it does not replace judicial or arbitral adjudication.

How to Prepare and File a Statement of Claim Against a Shipping Company

To bring a civil claim against a shipping company, a formal statement of claim should be prepared in accordance with the procedural requirements. It must identify the parties, state the claim amount, explain the factual background, list supporting evidence, and specify the requested relief. The claim is typically filed through the electronic judicial services process, and relevant documents such as the bill of lading, carriage contract, survey report, and supporting correspondence should be attached.

Because cargo claims often involve technical issues, obtaining an official expert assessment in maritime transport may be important, and in many cases, it materially improves the credibility and clarity of the claim. Where cargo is insured, the insurer may bring a claim through subrogation mechanisms, depending on the policy and payment terms. Court fees must also be paid in accordance with applicable tariffs. In complex or international cases, specialized legal counsel can significantly improve prospects of success.

How Is Carrier Fault Proven?

Proving carrier fault is a central element of many cargo claims. Under Iranian law, the claimant generally bears the burden of proof and must demonstrate, with credible evidence, that the carrier failed to meet contractual or legal duties. This is often done through expert survey reports, shipping documentation, inspection certificates, discharge records, and, where relevant, official statements by port personnel.

In cases involving delay, physical damage, improper stowage, or handling defects, negligence may be inferred from the factual record and expert analysis. Conversely, if the carrier can prove that the loss resulted from external factors such as severe weather, collision attributable to third parties, or port restrictions, liability may be excluded or reduced. Comprehensive evidence gathering is therefore critical. If fault is not established, the claim may be dismissed or partially upheld, depending on the applicable legal regime and the evidence.

When Is a Shipping Company Exempt From Liability?

A shipping company may be exempt from liability in limited circumstances recognized under Iranian law and international maritime law. Common exemptions include force majeure events such as extraordinary storms, earthquakes, war, or other unforeseeable and unavoidable incidents. Exemptions may also apply where the loss is caused by the act or omission of the shipper or consignee, such as inadequate packaging, or where the loss arises from the inherent nature of the goods, including natural perishability or instability.

The carrier must support any exemption claim with credible documentation and must demonstrate that reasonable precautions were taken. Liability exclusions should be specific and narrowly applied, and broad disclaimers are not generally sufficient. In addition, where the carrier’s conduct amounts to gross negligence or intentional wrongdoing, reliance on exemptions is typically not available.

How Is Recoverable Damage Calculated?

Recoverable damages must be provable, genuine, and capable of assessment. The amount is typically determined based on the cargo value at the relevant time, associated costs such as customs charges, discharge expenses, warehousing and demurrage, and proven commercial losses such as lost sales opportunities or termination of downstream contracts caused by delay. Such commercial losses must be supported by evidence and a clear causal link.

Foreign exchange rates, prevailing market prices, and official expert valuation reports frequently play an important role in quantifying loss. If the cargo has been insured and the insurer has paid compensation, the recovered amount may be adjusted in accordance with insurance and subrogation principles. Ultimately, the court or arbitral tribunal determines the final amount after reviewing documents and expert opinions. Accurate and realistic valuation enhances the likelihood of acceptance.

The Role of Insurance in Cargo Claims

Cargo insurance plays an important protective role in maritime transport. When damage occurs, the insurer may compensate the cargo owner, subject to policy terms. After paying the insured, the insurer commonly acquires the right to pursue recovery from the carrier through subrogation. This recovery may be pursued through negotiation, formal claims correspondence, arbitration, or court proceedings.

Insurance can also facilitate the claims process because insurers typically require structured documentation and may appoint surveyors to establish the cause and extent of damage. In disputes over carrier liability, the insurer may also engage directly in negotiations on behalf of the claimant. Some policies include arbitration provisions, particularly in cross-border settings. In practice, a valid cargo policy can both accelerate compensation and improve the evidentiary quality of the claim process.

Arbitration or Court Litigation, Which Is Preferable?

Many international carriage contracts include arbitration clauses requiring disputes to be resolved through arbitration before litigation. Arbitration is often faster, more specialized, confidential, and allows the selection of arbitrators with maritime expertise. Under Iranian international arbitration principles, where arbitration is validly agreed, courts generally do not hear the merits except in limited statutory situations.

Court litigation, by contrast, is a formal public process, and judgments typically allow appellate review. The appropriate choice depends on the contract terms, the urgency of relief, the complexity of evidence, and the strategic value of confidentiality and expertise. Where no arbitration clause exists, court litigation may be the only available route. In international cargo disputes, careful forum strategy can materially affect timelines and outcomes.

Why Specialized Legal Advice Matters in Shipping Disputes

Maritime cargo disputes are technically complex and often international in nature. Effective handling requires familiarity with transport law, commercial law, marine insurance, arbitration practice, and procedural rules. Lack of awareness of international standards, maritime customs, or documentary requirements can result in loss of rights or weakened claims.

Drafting and interpreting carriage contracts, assessing liability and exemptions, preserving evidence, and engaging experts are specialized tasks. Legal counsel experienced in maritime matters, together with qualified experts, can improve claim strategy, strengthen the evidentiary record, and reduce wasted time and cost. Proper legal advice is, therefore, a practical safeguard for maximizing recovery and managing risk.

Frequently Asked Questions About Shipping Company Liability Toward Cargo