Cargo Damage Claims in India: Who Is Liable and How to Claim

Cargo damage is a reality of international trade. Goods are damaged in transit for many reasons — rough seas, improper stowage, condensation, container damage, or mishandling during loading and discharge. When damage occurs, knowing who is responsible, how to preserve your claim, and how the recovery process works in India is essential for cargo interests.

Who Can Be Liable for Cargo Damage

Multiple parties may be involved in the carriage of goods, and liability can rest with any of them depending on the circumstances. The carrier — the shipping line that issued the bill of lading — is the primary party against whom cargo claims are typically brought. The carrier is responsible for the cargo from the time it is loaded until the time it is discharged at the destination port.

The stevedores who load and discharge the cargo at port may also be liable where damage occurs during those operations. The freight forwarder or non-vessel operating common carrier who organised the shipment may have liability under their own terms and conditions. Where damage occurs after discharge, the terminal operator, inland carrier, or warehouse may be responsible.

Identifying the correct party requires understanding where and when the damage occurred. This is why cargo surveys are so important.

The Importance of a Cargo Survey

As soon as cargo damage is discovered, a survey should be commissioned from an independent marine surveyor. The surveyor's role is to inspect the damaged cargo, document the nature and extent of the damage, identify the likely cause, and prepare a report that can be used as evidence in any subsequent claim.

Do not allow damaged cargo to be disposed of, repaired, or moved before a survey has been conducted. Destroying or altering the evidence of damage before it has been properly documented will significantly weaken your claim.

Notice of Loss or Damage

Notice of loss or damage must be given to the carrier within the time limits specified in the bill of lading and the applicable law. Under the old Carriage of Goods by Sea Act 1925, notice of apparent damage had to be given in writing before or at the time of delivery of the goods. Where damage was not apparent at the time of delivery, notice had to be given within three days.

Failure to give timely notice creates a presumption that the goods were delivered in the condition described in the bill of lading, though this presumption can be rebutted. Under the 2025 Carriage of Goods by Sea Bill, these notice requirements have been updated and clarified. Cargo interests should verify the current notice requirements applicable to their shipment.

Carrier Defences

Carriers have a range of defences available to them against cargo damage claims. The most significant are that the damage was caused by perils of the sea, by inherent vice in the cargo itself, by improper packing by the shipper, by fire, or by an act of war. Carriers also traditionally relied on the nautical fault defence, which protected them from liability for damage caused by errors in navigation or management of the ship.

The strength of these defences depends on the facts of each case. A carrier who claims that damage was caused by inherent vice or improper packing will need to produce evidence supporting that position, and cargo interests can challenge the defence with survey evidence showing that the damage was caused by carrier negligence.

Marine Cargo Insurance

Most cargo interests protect themselves against the risk of cargo damage through marine cargo insurance. Where insured cargo is damaged in transit, the insurance claim is typically made first, and the insurer then pursues the recovery against the carrier on a subrogated basis.

Having marine cargo insurance does not remove the need to follow the proper claims procedure against the carrier. The insurer's right of subrogation depends on the insured having properly preserved the claim against the carrier, including giving timely notice and commissioning a survey. An insured who fails to do these things may find that the insurer has grounds to reduce or deny payment of the insurance claim.

Practical Steps

When cargo arrives damaged, the immediate priorities are to note exceptions on the delivery receipt before signing it, to commission a survey from an independent marine surveyor without delay, to give written notice of the damage to the carrier within the required time, to preserve all documentation including the bill of lading, packing list, commercial invoice, and survey report, and to take legal advice promptly on the steps needed to preserve and pursue the claim within the applicable limitation period.