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India's Sea Cargo Transportation Bill

Published on : 21 Dec 2024
Author(s):Several

India’s Carriage of Goods by Sea Bill

The Carriage of Goods by Sea Bill, 2024, introduced in the Lok Sabha on August 9, 2024, seeks to overhaul India’s maritime cargo laws by replacing the nearly century-old Indian Carriage of Goods by Sea Act, 1925. This Bill aims to align Indian maritime regulations with international standards, particularly the Hague and Visby Rules, ensuring greater uniformity, clarity, and legal modernization. With India's expanding role in global maritime trade, the updated legal framework will address evolving market needs, providing flexibility for carriers, shippers, and regulators alike.

The Carriage of Goods by Sea Bill, 2024, retains the core provisions of the 1925 Act while introducing necessary updates to align with modern practices. It governs the rights, liabilities, and immunities of carriers and shippers for goods transported by sea from Indian ports to both domestic and international destinations. The Bill also empowers the central government to amend the schedule specifying rules for bills of lading and issue directions to ensure compliance with its provisions.

A bill of lading, central to sea cargo transportation, is a document issued by a carrier that specifies the type, quantity, condition, and destination of goods being shipped. The rules under the Bill outline responsibilities, legal liabilities, and rights for both parties, thereby establishing a uniform and transparent legal framework for sea transportation.

Key Amendments and Provisions of the 2024 Bill

The Bill introduces several significant changes to the regulatory framework established under the 1925 Act, addressing both operational and legal aspects.

Repeal of the 1925 Act

The new Bill explicitly repeals the Indian Carriage of Goods by Sea Act, 1925. However, it ensures that actions and obligations established under the previous Act remain valid, preventing disruptions in ongoing or past transactions.

Bulk Cargo Verification

The Bill retains the provision that bulk cargo weights verified by third parties will not be treated as prima facie evidence against the carrier. This protects carriers from liability arising due to third-party errors in determining cargo weight.

Seaworthiness of Ships

Like its predecessor, the 2024 Bill does not impose an implied absolute warranty of seaworthiness on carriers. This change balances the responsibilities between shippers and carriers, although it may raise challenges for shippers who expect carriers to guarantee seaworthy vessels.

Application to Sailing Ships and Special Routes

The Bill extends the application of rules to sailing ships and special routes, such as trade between India and Sri Lanka, enabling more flexibility in the transport of goods. However, this could also raise safety standard concerns depending on the nature of the vessels used.

Increased Government Oversight

The Bill grants discretionary powers to the central government to issue directions for implementation and amend the rules applicable to bills of lading. This added flexibility was not as clearly defined in the 1925 Act and reflects a more responsive regulatory approach.

Inclusion of International Amendments

The Bill acknowledges and incorporates international amendments introduced by the 1968 Brussels Protocol (Visby Rules) and the 1979 Protocol, which were not part of the original 1925 Act. This ensures India’s maritime laws are in conformance with international standards.

Challenges and Emerging Issues

While the Carriage of Goods by Sea Bill, 2024, is a significant step forward, it presents several challenges.

Lack of Implied Seaworthiness Warranty

The removal of an implied warranty of seaworthiness could lead to legal disputes if carriers do not maintain proper vessel standards. Shippers may find it harder to claim compensation for cargo damage caused by vessel defects.

Ambiguity in Definitions

The Bill applies to goods transported from any port in India to ports worldwide. However, the definition of “port” and what qualifies as “goods” may require further clarification to avoid interpretational disputes.

Safety Concerns with Sailing Ships

Allowing the transport of goods on sailing ships and specific trade routes introduces flexibility but may compromise safety standards, especially for fragile or hazardous goods.

Bulk Cargo Weight Disputes

The relaxed standards regarding third-party weight verification could become a source of dispute between carriers and shippers if there are disagreements over cargo weight or condition.

Dispute Resolution Mechanisms

The Bill lacks explicit provisions for dispute resolution, especially in the context of international trade disputes. Given the complexities of maritime commerce, clearer mechanisms may be needed to avoid delays and conflicts.

Impact on India's Maritime Sector

The Carriage of Goods by Sea Bill, 2024, brings India’s maritime legal framework in line with global standards, supporting the country’s ambitions for economic growth and global trade integration. By modernizing outdated provisions and ensuring regulatory flexibility, the Bill enhances legal transparency and operational efficiency in sea transportation.

The changes, such as the removal of outdated warranties and simplified rules for bulk cargo verification, reflect a pro-business approach that balances the interests of both carriers and shippers. Moreover, the Bill ensures continuity by preserving existing liability provisions under the Merchant Shipping Act, 1958, while repealing the older Carriage of Goods by Sea Act.

Conclusion

The Carriage of Goods by Sea Bill, 2024, marks a major step in updating India’s maritime legal framework, replacing an act that has governed sea transport for nearly a century. With a focus on international alignment, legal clarity, and regulatory flexibility, the Bill addresses the evolving needs of India’s maritime trade sector.

As the maritime industry continues to grow, especially with India’s expanding role in global commerce, the new Bill ensures a more predictable and transparent legal environment. However, some provisions, such as the lack of an implied warranty for seaworthiness and third-party weight verification standards, may need further refinement to avoid potential disputes. Going forward, India will need to monitor the implementation of the Bill closely and address emerging issues to ensure smooth maritime operations and dispute-free trade practices.

The Carriage of Goods by Sea Bill, 2024, thus positions India as a forward-looking participant in global maritime trade, offering legal certainty, safety, and efficiency in sea transportation while supporting the country’s growing trade ambitions.