Carrier Liability under a Bill of Lading: Package Limits and the One-Year Time Bar

A shipper who finds his cargo damaged on discharge asks three questions, and only one really matters. Is the carrier liable? Almost always, at least on the face of it. How much will he pay? Far less than the loss. And how long is there to act? One year, which is short, and that is where most claims die. This page approaches carrier liability from the angle that decides cases: limits and time bars.

One year to sue, and the date matters more than the merits

Article L. 5422-18 of the Transport Code is formidably brief: an action against the carrier for loss or damage is time barred after one year. The provision permits extension, but only by agreement concluded between the parties after the event giving rise to the action, which means obtaining a written extension from the carrier or his club, usually negotiated a few weeks before expiry. Such extensions, routine in practice, are requested late and sometimes granted grudgingly. A technically strong file that reaches the twelfth month without an extension or a writ is worth nothing.

The practical difficulty lies elsewhere: identifying the right defendant before time expires against him. Contractual carrier issuing the bill of lading, actual carrier operating the vessel, registered owner, freight forwarder, port operator, each is governed by a distinct regime and sometimes a distinct limitation period. Suing the wrong operator interrupts nothing against the right one.

Limits fixed per package and per kilogramme

Article L. 5422-13 refers, for limitation of liability, to the amounts fixed by paragraph 5 of article 4 of the Brussels Convention of 25 August 1924 as amended, that is to the per package or unit and per kilogramme of gross weight limits derived from the Hague-Visby Rules. Expressed in special drawing rights, those figures bear no relation to the real value of most industrial cargoes: a high-value machine tool shipped as a single package is indemnified on the basis of a derisory unit limit. It is the most poorly anticipated mismatch in the field, and it is corrected upstream, never after the casualty.

Two mechanisms allow escape from the limit, both under article L. 5422-14. The first is qualified fault: the carrier loses the benefit of limitation where it is proved that the damage resulted from his personal act or omission committed with intent to cause such damage, or recklessly and with knowledge that such damage would probably result. The burden is demanding and targets the carrier himself, not his servants. The second is far simpler and yet neglected: a declaration of value by the shipper, inserted in the bill of lading and accepted by the carrier, which is conclusive against him in the absence of proof to the contrary. Declaring value costs a freight surcharge. Not declaring it costs the difference between the limit and the actual loss.

Exclusion clauses are void, with two exceptions

Article L. 5422-15 renders void any clause whose object or effect is directly or indirectly to relieve the carrier of his statutory liability. The regime is therefore mandatory, which sharply distinguishes carriage under a bill of lading from affreightment, where the contract governs. Article L. 5422-16 nonetheless preserves two situations in which liability clauses become lawful again: the carriage of live animals and goods carried on deck under article L. 5422-7, excluding containers carried on vessels fitted for that purpose. Deck cargo thus remains one of the few areas of contractual freedom in the regime, and among the first points to check when damage occurs to an exposed shipment.

Based in Paris, the firm acts in all French ports, from Le Havre to Marseille and from Nantes-Saint-Nazaire to Antibes, as well as before the Chambre arbitrale maritime de Paris, and works in English with shipowners, P&I clubs and foreign counsel.

Typical cases handled

The situations below are illustrative, anonymised scenarios. They show when the firm steps in and what the work consists of.

A claim at eleven months, a time bar at twelve

A shipper made oral reservations at discharge, then negotiated for eleven months with a carrier promising a settlement. The firm steps in during the eleventh month: interrupting notice, action against the carrier and indemnity claim against the forwarder, before the one-year time bar closes the case.

A limit covering a tenth of the loss

A cargo of machinery worth 400,000 euros is lost; the bill of lading limits compensation to a few thousand SDR. The work bears on the declared value, on the number of units actually declared and on proof of reckless conduct allowing the limit to be broken.

An exclusion clause raised by the carrier

The carrier relies on a bill of lading clause excluding liability for inherent vice. The firm tests the clause against the Hague-Visby Rules and the French Transport Code, and shows that the real cause is defective stowage attributable to the ship.

Frequently Asked Questions

What is the time limit for suing a sea carrier?

One year under the Hague-Visby Rules, running from delivery of the goods or from the date on which they should have been delivered. The period is short, strictly applied and easy to lose while a survey is being organised. It can be extended by agreement with the carrier, and the extension should be requested in writing well before expiry rather than assumed. Where the carriage is governed by another set of rules, or where the claim lies against a party other than the contractual carrier, a different period may apply, which is why the documents are examined at the outset.

How are the limits of liability calculated?

Under the Hague-Visby Rules the carrier’s liability is capped at 666.67 units of account per package or unit, or 2 units of account per kilogram of gross weight of the goods lost or damaged, whichever is the higher. The unit of account is the Special Drawing Right. The number of packages is taken from the bill of lading, which makes the description of the cargo commercially significant: a container described as a single package limits far more severely than a bill enumerating the cartons stowed inside it.

How can compensation above the limit be obtained?

Three routes exist. The value of the goods may be declared by the shipper and inserted in the bill of lading, which displaces the package limitation at the price of higher freight. The limit is also lost where the damage results from an act or omission of the carrier done with intent to cause damage, or recklessly and with knowledge that damage would probably result, a test that is demanding and rarely met. An ad valorem clause or a separate contractual undertaking may finally be negotiated. Cargo insurance remains, in practice, the reliable answer.

Can a bill of lading clause exclude the carrier’s liability?

Not where the Hague-Visby Rules apply. A clause relieving the carrier from liability for loss or damage arising from negligence, fault or failure in the duties and obligations imposed by the Rules, or lessening that liability otherwise than as the Rules provide, is null and void. Clauses increasing the carrier’s responsibility are permitted. The exercise is therefore to determine first whether the Rules govern the carriage, by reference to the place of issue, the port of loading and the terms of the bill, and only then to read the printed conditions.

Who can sue the carrier, and who is the carrier?

The lawful holder of the bill of lading and the party who suffered the loss may claim, and the subrogated cargo insurer claims in their place once it has paid. The identity of the carrier is not always obvious: the bill may be issued by an agent, by a charterer or by a freight forwarder acting as carrier, and identity of carrier clauses try to shift the answer towards the registered owner. Suing the wrong entity wastes the one year period, so the carrier is identified from the face and the reverse of the bill before proceedings are issued.

What evidence decides a cargo claim?

The condition of the goods at loading and at delivery, and the causal link in between. A clean bill of lading, a joint survey carried out promptly, temperature and stowage records, the vessel’s log and container data are what a tribunal weighs. Reservations at delivery matter: absent notice of loss or damage and of its general nature, delivery is prima facie evidence that the goods were delivered as described in the bill, with three days allowed where the loss is not apparent. The first week after discharge is therefore decisive.