Resolving a Maritime Cargo Dispute
How to pursue a claim for damaged or lost cargo shipped by sea, including time limits and jurisdiction.
Overview
If goods shipped by sea arrive damaged, short-delivered, or not at all, you may have a claim against the carrier, charterer, or their insurers. Maritime cargo claims are governed by the Carriage of Goods by Sea Act 1992, the Hague-Visby Rules (incorporated into English law), and the contract of carriage (bill of lading or sea waybill). Claims are typically brought in the Admiralty Court (part of the King's Bench Division) or resolved through London maritime arbitration. Time limits are strict — usually one year from delivery or expected delivery under the Hague-Visby Rules.
Who Can Use This Process
- You are the lawful holder of a bill of lading or named consignee on a sea waybill
- The goods were damaged, lost, or short-delivered during sea transit
- The carrier or charterer has not adequately compensated you
- You are within the one-year time limit (or any contractual time bar)
Step-by-Step Process
Inspect and Document the Damage
On receipt of the cargo, inspect it immediately. Note any visible damage on the delivery receipt or mate's receipt. If damage is not apparent, you must give written notice to the carrier within 3 days of delivery (Article III rule 6 of the Hague-Visby Rules). Take photographs and arrange for a survey by an independent marine surveyor.
- Always 'clause' the delivery receipt if damage is visible
- An unclaused receipt creates a presumption goods arrived in good condition
- Engage a P&I Club surveyor or independent loss adjuster
Notify Your Cargo Insurers
If you have cargo insurance (typically under an Institute Cargo Clauses policy), notify your insurers immediately. They will appoint a loss adjuster or surveyor. If the claim is paid by insurers, they will pursue the carrier by subrogation in your name.
- Keep the damaged goods — insurers may want to inspect them
- Do not dispose of packaging until after the survey
Identify the Responsible Parties
Determine who is liable: the contractual carrier (named on the bill of lading), the actual carrier (ship operator), the charterer, or the stevedores. Check the bill of lading for jurisdiction and arbitration clauses. Most London bills of lading provide for English law and London arbitration.
- The 'Himalaya clause' may extend the carrier's defences to sub-contractors
- Check whether the Hague-Visby Rules apply — they limit liability per package or unit
Send a Letter of Claim
Write a formal letter of claim to the carrier (and their P&I Club if known) setting out the facts, the damage, the amount claimed, and the legal basis. Enclose copies of the bill of lading, survey report, commercial invoice, and packing list. Request a response within 28 days.
- Address the claim to the carrier and copy their P&I Club
- Under the Hague-Visby Rules, liability is limited to 666.67 SDR per package or 2 SDR per kilogram (whichever is higher) unless the value was declared
Commence Proceedings or Arbitration
If the claim is not resolved, commence proceedings in the Admiralty Court (for court claims) or London maritime arbitration (if the contract provides for it). The strict one-year time limit under the Hague-Visby Rules means you must issue proceedings within one year of delivery or expected delivery. In arbitration, appoint your arbitrator and serve a notice of arbitration.
- The one-year time bar is strict — courts rarely extend it
- London Maritime Arbitrators Association (LMAA) arbitration is the standard forum
- Consider arresting the vessel as security for your claim (Admiralty action in rem)
Costs
Important Warnings
The one-year time limit under the Hague-Visby Rules is strictly enforced — do not delay.
Failure to give notice of damage within 3 days of delivery creates a presumption the goods arrived in good condition.
Carriers' liability is limited under the Hague-Visby Rules unless the shipper declared the value of the goods before shipment.
Check the bill of lading carefully for jurisdiction, arbitration, and time bar clauses.