Article 7 – Time Limitation – Multimodal Shipment Under Indian Law

This article is about a case in which the carrier filed a legal proceeding against the cargo interest in order to protect its position in a claim instituted against the carrier by the cargo interest.

The brief summary of the case has to do with the law in India affecting shipments under multimodal transport, in particular whether a 9 month time limitation applies. The parties to the legal action are both Indian concerns. Another issue to consider was whether action should be taken in India or could be taken in a court of law in the country of destination. The case relates to action by the carrier against the shipper who has filed a separate claim against the carrier. Briefly the details of this case are as follows.

The carrier contracted with the shipper (Alcobex Metal) in Feb 2002 for a carriage of eight boxes of bronze tubes from Mumbai to Stafford England via the port of Avonmouth . A multimodal mode was concluded, as the carrier through its agent would provide the on-carriage of the goods from Avonmouth to Starfford.

The multimodal transport documents were issued pursuant to the Indian Multimodal Transport of Goods Act 1993, and the following relevant clauses were included therein.

Clause 12

Liability for loss or damage when the stage of transport where loss or damage occurred is known:

(1) When the MTO (Multimodal Transport Operator or carrier) is liable to pay Compensation in respect of loss of or damage to the goods between the time of taking them into his charge and the time of delivery and the stage of transport where such loss or damage occurred is known, the liability of the MTO in respect of such loss and damage shall be determined … by the provisions of the applicable law of the country where the loss or damage occurred ….

Clause 22

Limitation of action:

Any action relating to multimodal transport under theses conditions shall be time barred if judicial proceedings have not been instituted within a period of nine months after:

•  the date of delivery of the goods, or

•  the date when the goods should have been delivered, or

•  the date on and from which the party entitled to receive has the right to treat the goods as lost.

Clause 23

Jurisdiction:

In judicial proceedings relating to the contract … the plaintiff, at his option, may institute an action in a court which according to the law of the country where the court is situated, is competent and within the jurisdiction of which is situated one of the following places:

(c) the place of taking charge of the goods for multimodal transportation or the place of delivery thereof.

Clauses 22 and 23 being similar with the relevant provisions in the Indian Multimodal Transportation Act 1993 would be deemed to reflect Indian law.

The shipment arrived at Avonmouth and was discharged from vessel on 9 April 2002. Instead of continuing with the on-carriage to Stafford , the receivers were somehow able to obtain release of goods to them in Avonmouth without production of the bills of lading. The release occurred before 17 May 2002.

Upon this release, Alcobex filed a claim against the carrier, alleging that the release was unauthorized, for loss that the receivers have not paid for the goods, as the shipment was cash against documents. The claim was filed on grounds of mis-delivery and conversion of goods. Various letters on the claim were sent to the carrier in 2002 and 2003 but it was only in Jan 2004 that Alcobex instituted legal proceeding in the Indian High Court at Mumbai .

In protecting its position, the carrier in April 2003 commenced its proceeding against various parties including Alcobex in the English High Court , seeking a declaration that it was not liable to Alcobex on ground of time bar under the terms of the MTD. In the claim against the other parties, the carrier was seeking damages or indemnity if the carrier was held liable for mis-delivery.

The proceeding was duly served on Alcobex but its acknowledgement was defective on some technicality. Although Alcobex was not represented in the proceeding, the carrier sought the trial of its claim on its merit in order to seek enforcement in India should the judgment be in its favour, instead of obtaining a default judgment.

Judgment was arrived at on the following issues:

Jurisdiction and choice of law

It was ruled the English law would apply and the carrier's claim could be taken in England . Various legal issues were considered by the court in arriving at this ruling.

Time Limitation

Clause 22 was considered very wide and encompassing when it relates to a multimodal transport and the nine month period would have expired on 17 Feb 2003 at the latest for Alcobex to bring an action against the carrier. Once that date had lapsed the right of Alcobex to bring an action would have extinguished.

Disclaimer: This is only a very brief outline of the legal case and does not intend to reflect the legal position on shipments from India at the present moment. The law may have changed since the judgment. No professional advice is intended.