The Carriage Of Goods By Sea Bill, 2024 – IMPRI Impact And Policy Research Institute

Policy Update
Geetam Acharya

Introduction

The Carriage of Goods by Sea Bill, 2024 was introduced in Lok Sabha on August 9, 2024.  The Bill seeks to replace the Indian Carriage of Goods by Sea Act, of 1925.  The Act establishes the responsibilities, liabilities, rights, and immunities in case of goods carried from a port in India to another port in India or any other port in the world.  The Act is in conformance with the. 

The Bill retains all provisions of the Act. The bill aims to modernize and update the legal framework governing the responsibilities, liabilities, rights, and immunities of carriers involved in the sea transport of goods. The Carriage of Goods by Sea Bill, 2024, aims to modernize India’s maritime cargo laws, Ports Shipping and Waterways.

Functions 

The Bill:

1. issues directions for the government to carry out provisions of the Bill, and 
2. Amends the schedule specifying rules applicable to bills of lading.  A bill of lading refers to a document issued by a freight carrier to a shipper.  It contains details such as the type, quantity, condition, and destination of goods being carried.  The rules outline the responsibilities, liabilities, rights, and immunities of goods carriers.
3. Removes exemptions for contracts made before January 1, 1926, creating a more uniform legal environment for maritime trade.
4. When the weight of bulk cargo (e.g., grains, minerals) is determined by a third party, it will not be considered prima facie (at first glance) evidence against the carrier. This protects carriers from being held responsible for third-party errors in weight.
5. The bill clarifies that the Merchant Shipping Act, of 1958, and any other laws limiting the liability of shipowners will remain in force and are unaffected by this Act.

Indian Carriage of Goods by Sea Act, 1925, and Amendments

The Indian Carriage of Goods by Sea Act, 1925 establishes the legal framework for transporting goods by sea, aligning India’s maritime law with international standards of the time. It is based on rules from international maritime conventions held in Brussels in 1922 and 1923 and regulates contracts between shippers and carriers, focusing on their responsibilities, rights, and liabilities during the transportation of goods. The Act introduced the Hague Rules to India.

Key provisions of the Act include its title and extent, applying to the entire country. The rules in the Schedule of the Act govern the carriage of goods by ships from Indian ports to both domestic and international destinations. The Act does not impose an implied absolute warranty of seaworthiness in sea transportation contracts. Every bill of lading issued in India must include a statement subjecting it to the Act’s Rules.

Modifications to Article VI of the Rules are applied to sailing ships and specific routes, such as those between India and Sri Lanka, extending the Rules to goods of any class. Additionally, bulk cargo weight verified by third parties is not considered prima facie evidence against the carrier, and the shipper is not required to guarantee the weight’s accuracy. The Act also preserves provisions from other laws limiting shipowner liabilities, like the Merchant Shipping Act, of 1958, and does not apply to contracts before January 1926.

Amendments

1. The 2024 Bill acknowledges the amendments introduced by the 1968 Brussels Protocol (Visby Rules) and the 1979 Protocol, which were not part of the 1925 Act. These amendments updated international maritime law with more detailed rules concerning the liabilities of carriers and shippers.
2. The 2024 Bill applies the amended Rules more broadly to goods being transported by sea from any port in India to any port worldwide, while the 1925 Act had a more limited scope.
3. The 2024 Bill retains the provision that there is no implied absolute obligation for carriers to provide a seaworthy ship, just as the 1925 Act did. However, the updated Bill also provides for modifications in Article VI for specified routes and the carriage of goods in sailing ships, ensuring the Rules apply more broadly and flexibly.
4. The provision in the 1925 Act that allows third-party weight verification for bulk cargo is carried forward in the 2024 Bill. However, the 2024 Bill gives greater clarity to the procedure and legal consequences of such third-party verification.
5. The 2024 Bill introduces more discretionary powers for the Central Government to issue directions and amend the Schedule as needed. This was not as clearly laid out in the 1925 Act, which only allowed the government to notify the commencement of the Act.
6. The 2024 Bill explicitly repeals the Indian Carriage of Goods by Sea Act, of 1925, but ensures that past actions and legal obligations under the 1925 Act continue to be valid. This provision modernizes the framework by completely reconfiguring the older Act.

Emerging Issues

The Carriage of Goods by Sea Bill, 2024, while updating and modernizing maritime regulations in India, could lead to several potential issues. The Bill applies to ships carrying goods from any port in India to ports both within and outside India, but the definition of what constitutes a “port” or the nature of “goods” may need further clarification to avoid legal disputes. Moreover, the removal of an implied absolute warranty for seaworthiness could create challenges for shippers, as carriers are no longer automatically responsible for ensuring a seaworthy ship. 

The modifications allowing goods of any class to be carried on sailing ships and special routes (e.g., between India and Sri Lanka) could lead to inconsistent safety standards. Additionally, the relaxed evidentiary standards for bulk cargo weight verification might create challenges for shippers if disputes arise over the actual cargo weight or condition. Also, the Bill’s provisions might not address dispute resolution mechanisms, especially in international contexts. Furthermore, existing limitations on carrier liability may still not be updated to reflect current market realities, leaving shippers vulnerable in cases of cargo damage or loss.

Way Forward

The Carriage of Goods by Sea Bill, 2024, represents a significant step towards refashioned India’s maritime legal infrastructure, replacing the nearly century-old 1925 Act. By aligning with international conventions such as the Hague and Visby Rules, the Bill brings India’s maritime regulations up-to-date with global standards. Its key objectives include clarifying the legal responsibilities, liabilities, and rights of carriers and shippers, streamlining the process for handling disputes, and ensuring greater flexibility in regulations through government oversight.

This modernization is crucial as India continues to expand its role in global trade, particularly in maritime commerce. The removal of certain outdated provisions, such as the implied warranty of seaworthiness, and its efforts to simplify bulk cargo verification reflect an approach that balances the interests of both carriers and shippers. As part of India’s broader vision for economic growth and integration into the global economy, the Bill enhances efficiency, legal transparency, and safety in sea transportation, ultimately supporting the nation’s evolving trade ambitions.

References

About the Contributor– Geetam Acharya is a Research Intern at IMPRI and an undergraduate student at Sri Venkateswara College, University of Delhi with a keen interest in Political Science and International Relations.

Acknowledgment– The author would like to thank Dr. Arjun Kumar, Vaishali Singh, and Aasthaba Jadeja, who helped throughout this article and reviewed the same.

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