REFORMING MARITIME LIABILITY: THE CARRIAGE OF GOODS BY SEA ACT, 2025 AND ITS ALIGNMENT WITH INTERNATIONAL NORMS

ABSTRACT:

The Carriage of Goods by Sea Act, 2025 is a major landmark in the Indian maritime law for international trade repealing the colonial-era legislation of the Indian Carriage of goods by Sea Act, 1925. This article analyses the alignment of the newly enacted legislation with the international convention of the Hague0Visby rules, and the Bills of Lading. It outlines the rights and liabilities of carriers, shippers and buyers of such cargo by also drawing in a comparative strike between Bangladesh and Turkey and their own maritime laws and adaptations. It showcases the juxtaposition of the Indian legislative reform with international doctrines, case laws, and how they strike a balance between protecting the interest of the cargo owners and how the loss and damage of cargo have been dealt with in case of liability over time. The article will also pose recommendations for increasing international trade by sea and how to bring about more accessibility, transparency and accountability between various nations.

INTRODUCTION:

• In 2025, India witnessed a major legislative reform when the parliament passed two maritime bills changing century-old frameworks in effect. The Rajya Sabha passed the Carriage of Goods by Sea Act of 2025[1] which stood as a repeal for its parent act, Indian Carriage of Goods by Sea Act, 1925[2] which was brought about in action during the colonisation in India. This acted as a step by the Indian government in repealing colonial-Era law to more modern laws with evolving practices in India. The bill introduced in the parliament, per se the Rajya Sabha was an adaptation of the maritime rules followed by the United Kingdom named Hague-Visby rules. The purpose of the said legislation was to streamline the existing complexities in maritime law by making trade laws clearer, minimizing litigation risks, promoting efficiency and transparency in the carriage of goods by sea. The bill was introduced in the Rajya Sabha by the Union Minister of State for ports, shipping and waterways when the dire need of a newer law was felt by the citizens. This repealed law was to act as a small pawn in the greater efforts of the Indian government in ridding India of colonial-era laws and to initiate the takeover by modern and to replace outdated norms by simplifying the route of sea for international trade. [3]
• Trade by sea is one of the oldest methods of trade in the world. When borders of countries restricted entry by merchants for any kind of trade, they resorted to trade by sea to ports. Hence, carriage of goods by sea happens to be a very old method of international trade, since sea happens to be one of the most expedient routes leading to use of carriage by sea especially goods by sea. With evolving times, the kinds of ships used for carriage of goods have also evolved. Different types of carriage call for variation in the type of ship, bringing about autonomous ships replacing more traditional ships. Many of the older, “traditional ships already possess a certain level of autonomy but with technological advancements, people are asking for more fully autonomous ships. There are mainly two types of autonomous ships, namely manned and unmanned, the unmanned ships have no one captaining it and can run on technologies like AI.[4] The IMO has named such ships as Maritime Autonomous Surface Ships (MASS), and distinguishes them into different levels of autonomy. The very purpose of autonomous ships is to reduce costs and to see a decrease in risk and fatalities, since naval accidents are well known in traditional ships. Now the only dilemma at hand is the carriage of goods by sea and regulating this act especially in case of an autonomous vessel, in such a case liability plays a vital role. Carriage of goods by sea is a contract entered into by shipowners and charterer. [5]
• CONTAINERISATION AND THE MODERNISATION OF SEA TRADE:
  • The term containerisation is a mode of packaging of cargo into containers, easing the method of unloading, reloading between ships, trucks and other vessels, but only in case of larger bulk cargoes. This is one of the most modern methods of shipping by sea since the existence of steam-powered ships. It was primarily used by US and marginalised by other countries since it was mostly adapted by niche markets since it required attention to detail like building specified ports for such containerisation. It saw its first landmark when the ship named Fairland sought to its journey from New York and finished it 4 weeks faster than it would have taken a traditional ship causing the shut down of all criticism towards it. Singapore championed containerisation before any other nation and made it a fully international cargo unitisation method and encouraged other countries to use it. The regulating framework for containerisation in the international carriage of goods by sea which is governed by the Bills of Lading Act, 1855[6] is problematic due to its limited and outdated applicability. The Hague-Visby rules came to address the function of containerisation but with limited liability.[7]

LITERATURE REVIEW

1. HAGUE VISBY RULES: FRAMEWORK AND LIABILITY STRUCTURE:

The Hague-Visby rules[8] are a set of international standards, a key regulatory maritime trade law, introduced in the United Kingdom, which is the governing law for carriage of goods by sea and, these rules inspired the Carriage of Goods by Sea Act, 2025 in India which replaced a colonial-era law which previously existed. Its main purpose is it to define the rights and liabilities of persons involved in carriage of goods by sea which are the carriers and the shippers, also known as, shipowners and cargo owners respectively. This was formerly referred to as the 1924 Hague Rules. The fundamental duties of the shipowner under the Hague-Visby Rules are the seaworthiness of the ship i.e., it is the duty of the shipowner to build a ship which can withstand the perils of the sea and guarantee the safe transfer of cargo from one port to another as desired by the cargo owners. The second duty of the shipowners happens to be the duty of care towards the cargo entrusted to them for delivery by shippers. In case of any cargo claims by shippers, the priority of applicability of Hague-Visby rules comes into play. [9]

1.1. SEAWORTHINESS:

The principal obligation of a shipowner is to ensure the seaworthiness of a ship/vessel in a contract for carriage of goods by sea, this is an aspect shared in maritime insurance too. The seaworthiness of a vessel was held to be directly related to its variation in voyage, the particular time of the year the voyage took place and the different stages that the voyage goes through, the different cargoes which the shipowners have agreed to deliver and the terms of applicability mentioned by the cargo owners for the contract to be valid, all constitute the seaworthiness of such a vessel. What was necessary for a “seaworthy” ship was not one which could withstand all hazards or one which was conceivably “accident-free”, the liability of the ship owner extended unconditionally, i.e., the moment a contract for carriage of goods is entered into by shipowners and cargo owners, the liability of the shipowner is extended till  the cargo is delivered, so any damage to the cargo will warrant a claim for damages by the cargo owner against the shipowner, irrespective of the fault. In the judgement of McFadden v. Blue Star Line., it was laid down that the seaworthiness could arise for a vessel where a defect was found after the voyage and the question arises as to the liability of the ship owner, that if he had found the said defect before the commencement of the voyage, would the shipowner make any changes to the ship or make corrections to the defect mentioned, if yes then such a ship would not be considered a seaworthy ship. It was also held that the ship need not have all the newest advancements or inventions, and that it need not always be up to date. [10]

1.2. DUTY OF CARE:

The concept of duty of care for cargo by the shipowners arises from their contractual liability and even in their liability during bailment. As mentioned by Charles Abbott 1802, that the master, who in this case is the shipowner has the duty to take all possible care for the cargo, and that the owners must care for the cargo equitably as much as possible by human far-sightedness. The liability for carrying of cargo for reward, mostly in tariff trades was also introduced in common law countries. Hence calling upon the liability of shipowners of goods bailed to them, and were commonly considered as insurers of such goods, and were responsible for delivering of such goods in proper condition, unless the contrary for which negligence was not a contributory for the loss and damage of goods during delivery. At that time loss due to Act of God, or due to any enemies of the Queen. But the existence of such carries is near to extinct now and are hence not considered under the paradigm of the rules. Henceforth, the duty of care of the shipowners towards the cargo extends to that of a contract of bailment, and the shipowners must take relevant steps to preserve the cargo. Since, the steps for care will differ for each type of cargo, and the shipowner takes necessary steps to preserve the cargo in case of any hazardous situation, the cargo owner will need to reimburse the carriers of such expense.

2. THE BILLS OF LADING ACT, 1855 AND ITS REPEAL

The existence of the Bill of Lading Act of 1855[11] came to be with the existence of contract of carriage of goods by sea, and is majorly governed by conventions such as the Hague-Visby rules, Hamburg rules[12], and the Rotterdam Rules[13]. The act was passed to solve the problem which evolved when the position of receiver of goods carried by sea could not be determined. It can be considered a receipt for cargo, the holder can exclusively claim delivery of cargo, and evidence of the existence of a contract of carriage of goods, it can be called as a document for title.[14] The main purpose of this act was to bring about enforceability of contract, and gave exclusive rights for third parties to contracts. In case of bulk carriage of goods, the holders of such Bill of Lading lacked rights to enforce the contract, inadvertently lacking legal title and unable to sue the carries in case of damage or loss. This created prevalent inefficiencies and incompetence in the industry. The carriage of goods by sea act was passed by repealing the Bills of Lading. Section 1 of the BoL allows the receiver of cargo to sue in case of damage of cargo, in the position equivalent to that of the owner of the cargo. This section also states that the right to sue the carrier of goods transfers on the delivery of goods to the consignee.[15]

3. BANGLADESH AND TURKEY: MARITIME LAWS

The Carriage of goods by sea in Bangladesh and Turkey have differing legislations, as these form a crucial part of maritime law in these countries, they are amended to fit their culture and working accordingly. Sea trading became a major revenue-generating industry in the 20^th century, this in place made nations craft the Hague Visby rules to regulate trade by sea route. But as trade boomed and times changed, the applicability of the Hague Visby rules decreased, hence formulating the Hamburg Rules, 1978 and later the Rotterdam Rules in 2008. The rate of adoption of international conventions varies between different nations depending on how developed or underdeveloped they are, this is significantly seen in developing and slower adapting nations like Bangladesh. Bangladesh uniquely blends both domestic legislations for maritime trade laws and adapts the Hague Visby rules. The maritime laws in Bangladesh fail to consider the modern shipping practices now adapted by shippers across nations. The issue of containerisation, a modern cargo unitisation method, which came to be with evolving times is overlooked in Bangladesh’s maritime laws. Turkey’s advantageous positioning geographically grants for higher rates of international trade by sea. Turkish maritime laws are a blend of international conventions incorporated into domestic laws. But the adaption of such conventions come with changes limiting liability and accountability. These are instead included in the Turkey’s Commercial Code. [16]

4. “THORCO LINEAGE”:

The case of the ship “LIMNOS”[17] brought about a major change in interpretation of the Hague-Visby Rules. It mainly discusses a carrier’s liabilities which in case of economic loss was limited to only the cargo which is physical damaged or lost, under the Art. IV Rule 5 of Hague Visby rules. Inadvertently in the case of the ship “THORCO LINEAGE,” Sir Nigel Teare refused to follow the decision given previously in the “LIMNOS” case and held that the limitation of the Art extends to the weight of the cargo damaged or lost. In this case, the vessel onboard had metric tons of zinc voyaged from US to Australia. A part of the cargo onboard the ship was damaged during an engine failure of the ship, where the cargo owners were liable to pay salvage remuneration to the buyer of goods. The argument by the carrier was mainly based on the Art. IV rule 5(a) of the Hague Visby[18] like the decision in the “LIMNOS” case, where the carrier’s liability to the lost goods would become limited. The court acknowledged the fact that when considering an international convention such as the Hague-Visby rules, they must make broad interpretation of the act, making important references to other precedents laid down by the court. Hence, the judge held that the words lost and damaged used in the article could not just be interpreted to mean physically damaged goods, but also to economically damaged goods. And hence the liability for economically damaged goods was limited to Art. IV Rule 5 of the Hague-Visby rules. [19]

RECOMMENDATIONS:

DIGITAL TRANSITION & E-BILLS OF LADING:

Introducing new technological methods to eliminate paperwork will ensure more accountability and traceability in Indian maritime trade laws. The Indian government can consider incorporating the Model Law of Electronic Transferable Record (MLETR) introduced by the UN in 2017 and aim to make electronic records and e-bills of lading, makes the transfer of documents/instruments easier across different nations, promoting increase in international trade. This can mainly aim at providing electronic documents to ensure that holder of the Bills of Lading, can claim or sue for performance of their obligations and making it easier to transfer documents or instruments relating to such tasks. The availability of such commercial tools in electronic form can benefit e-commerce. These will serve as the major development in the new paperless trade economy. It benefits people who part take in international trade to make multi-party agreements at ease, creating obligations for all parties to adhere to the rules of the platform. The various legislations which still remain ambiguous in the nature of the public law, this platform can ease up their participation in international trade by carriage of goods by sea. [20]

CONCLUSION:

The Carriage of Goods by Sea Act, 2025 which was passed in India was not just India reforming its century old law but its attempt at replacing colonial-era laws to Indian laws. The carriage of goods by sea act is a derivative of the Hague-Visby rules and the Bills of Lading, but this was done by incorporating the international conventions into the domestic legislation formulated in India, like turkey and Bangladesh. But even with international maritime legislations such as the Hague-Visby rules, it faced challenges regarding the rule for accountability at different factors was lacking. Hence why it was incorporated into domestic legislation with necessary changes rather than adapting how it is. In the case of Thorco Lineage ship, the different levels of liability of the shippers and carriers was studied and how the Hague-Visby rule was widely interpreted to bring about a just judgement to the shippers of the cargo. Hence, the legislation in India considers various such factors to affluence maritime laws in India and to adapt to the evolving technologies such as AI and electronic commercial tools for ease of trade.

REFERENCES:

1. Carriage of Goods by Sea Act, 2025
2. Indian Carriage of Goods by Sea Act, 1925
3. “Parliament Passes Two Landmark Maritime Bills in Single Day, a First for Shipping Ministry,” Press Information Bureau, Ministry of Ports, Shipping & Waterways, 6 August 2025
4. UNCITRAL, “Texts on Transport of Goods” https://uncitral.un.org/en/texts/transportgoods
5. Marija Pijaca, “Comparison of Problems Related to the Carriage of Goods by Sea Between Traditional and Autonomous Vessels,” Mar 2021, P. 2-6
6. Bills of Lading Act, 1855 (18 & 19 Vict c 111)
7. Mustafa Yilmaz, “The Impact of Containerisation on Carrier Liability”, NUS Law, 30^th Jan, 2025.
8. Hague-Visby Rules (Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, as amended by Visby Protocol 1968 / SDR Protocol 1979)
9. Stephen Girvin, “The carrier’s fundamental duties to cargo under the Hague and Hague-Visby Rules”, NUS Law, 2019.
10. Kurratul Ayin, IJRISS, “The Viability of the Term “Seaworthiness” Under the Hague-Visby Rules and the Carriage of Goods by Sea Act 1971”, Oct 2023.
11. United Nations Convention on the Carriage of Goods by Sea (Hamburg Rules), adopted 31 March 1978
12. United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (Rotterdam Rules), adopted 11 December 2008
13. Febren Andrew, “The Position of Bills Of Lading in The Carriage of Goods at Sea”, Mar 2024.
14. Nguyen Tung Lam, “From ownership to entitlement: replacing the bills of lading act 1855 with the carriage of goods by sea act 1992”, IJR, May 2025.
15. ASM Mahmudul HASAN, “A Critical Analysis of the Laws Relating to the Carriage of Goods by Sea: Bangladesh and Türkiye Perspective”, GUJSS, Jan 2024.
16. LIMNOS, [2008] 2 Lloyd’s Rep 166
17. Ian Woods, “The “THORCO LINEAGE” – Clarification of limitation under Art IV r.5(a) of The Hague-Visby Rules in respect of economic loss”, Clydeco, 8^th Feb, 2023.
18. UNCITRAL, “UNCITRAL Model Law on Electronic Transferable Records (2017)”, 13^th July, 2017.

[1] Carriage of Goods by Sea Act, 2025 (India)

[2] Indian Carriage of Goods by Sea Act, 1925 (Repealed)

[3] “Parliament Passes Two Landmark Maritime Bills in Single Day, a First for Shipping Ministry,” Press Information Bureau, Ministry of Ports, Shipping & Waterways, 6 August 2025

[4] UNCITRAL, “Texts on Transport of Goods” https://uncitral.un.org/en/texts/transportgoods

[5] Marija Pijaca, “Comparison of Problems Related to the Carriage of Goods by Sea Between Traditional and Autonomous Vessels,” Mar 2021, P. 2-6

[6] Bills of Lading Act 1855 (18 & 19 Vict c 111)

[7] Mustafa Yilmaz, “The Impact of Containerisation on Carrier Liability”, NUS Law, 30^th Jan, 2025.

[8] Hague-Visby Rules (Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, as amended by Visby Protocol 1968 / SDR Protocol 1979)

[9] Stephen Girvin, “The carrier’s fundamental duties to cargo under the Hague and Hague-Visby Rules”, NUS Law, 2019.

[10] Kurratul Ayin, IJRISS, “The Viability of the Term “Seaworthiness” Under the Hague-Visby Rules and the Carriage of Goods by Sea Act 1971”, Oct 2023.

[11] Bills of Lading Act 1855 (18 & 19 Vict c 111)

[12] United Nations Convention on the Carriage of Goods by Sea (Hamburg Rules), adopted 31 March 1978

[13] United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (Rotterdam Rules), adopted 11 December 2008

[14] Febren Andrew, “The Position of Bills Of Lading in The Carriage of Goods at Sea”, Mar 2024.

[15] Nguyen Tung Lam, “From ownership to entitlement: replacing the bills of lading act 1855 with the carriage of goods by sea act 1992”, IJR, May 2025.

[16] ASM Mahmudul HASAN, “A Critical Analysis of the Laws Relating to the Carriage of Goods by Sea: Bangladesh and Türkiye Perspective”, GUJSS, Jan 2024.

[17] LIMNOS, [2008] 2 Lloyd’s Rep 166

[18] Hague-Visby Rules Art. IV Rule 5.

[19] Ian Woods, “The“THORCO LINEAGE” – Clarification of limitation under Art IV r.5(a) of The Hague-Visby Rules in respect of economic loss”, Clydeco, 8^th Feb, 2023.

[20] UNCITRAL, “UNCITRAL Model Law on Electronic Transferable Records (2017)”, 13^th July, 2017.