Introduction

India’s ambitious maritime infrastructure drive has led to unprecedented growth and modernization of its ports. Major ports in India handled steadily increasing cargo volumes at a compound annual growth rate of over 3% between 2019 and 2024, while non-major ports saw around 2% growth. Large-scale initiatives like the Sagarmala programme and the Maritime India Vision 2030 have driven expansion of port capacity, reduction in vessel turnaround times, and development of new deepwater ports. This surge in port activity, often through Public-Private Partnership (PPP) models, has brought into sharp focus the legal framework governing port liability and cargo claims in India. Legal questions surrounding the allocation of risk for cargo loss or damage, the extent of port authorities’ responsibility as bailees, and the impact of privatization on liability regimes have become increasingly significant. The confluence of traditional maritime laws with new policy thrusts has exposed fault lines in the legal regime areas of uncertainty or tension that merit in-depth examination.

This research paper, prepared in a professional legal format by LawCite Advocates, comprehensively analyzes the statutory law, case law, and policy frameworks relevant to port liability and cargo claims in India. It navigates the interplay between domestic laws and international conventions (such as the Hague-Visby Rules and Hamburg Rules) and evaluates how India’s courts and legislation have addressed these conventions. The paper further examines how port privatization and the PPP model alter the liability landscape and dispute resolution mechanisms. Recent judicial pronouncements up to 2025, including Supreme Court judgments on port trust liabilities and PPP disputes, are analyzed alongside empirical data on port claims. The objective is to identify the critical legal fault lines points where the law is evolving or contested amid India’s maritime infrastructure push, and to clarify the rights, liabilities, and remedies of stakeholders (port authorities, private operators, carriers, and cargo owners) within the Indian legal context.

The discussion is structured into clear sections. Section II provides background on India’s port sector and the transition from public port trusts to PPP-operated terminals. Section III outlines the international carriage conventions (Hague-Visby and Hamburg) and their influence on Indian law. Section IV details India’s domestic statutory regime governing port operations and cargo carriage, including the Major Port Trusts Act 1963, the Major Port Authorities Act 2021, the Indian Ports Act 1908, the Carriage of Goods by Sea Act 1925, and related laws. Section V discusses the legal principles of port liability as bailee of goods, and statutory immunities or limitations on port liability. Section VI addresses how cargo claims are handled in practice delineating the responsibilities of carriers versus port authorities when loss or damage occurs, and how claims are pursued in courts or arbitral forums. Section VII focuses on the PPP model’s impact on liability allocation and the specialized dispute resolution mechanisms that have emerged (such as conciliation committees and adjudicatory boards). Section VIII reviews key Indian case law that has shaped the jurisprudence on port and cargo liabilities. Finally, Section IX concludes with observations on the current state of the law and potential reforms or clarifications needed to address the fault lines identified. Throughout, the analysis is up to date as of 2025, incorporating the latest legislative amendments, government initiatives, and court decisions. The tone remains formal and precise, befitting a law firm’s research publication, and all conclusions are supported by authoritative sources and citations.

II. Port Infrastructure Evolution and Legal Framework in India

A. The Public Port Trust Legacy: For most of the 20th century, India’s major ports were owned and operated by the central government through statutory port trusts. Enacted during the post-colonial period, the Major Port Trusts Act 1963 (MPT Act) governed 12 notified major ports, vesting management in Boards of Trustees under a public law regime. These port trusts were responsible for services like cargo handling, storage, navigation, and conservancy, and they enjoyed certain statutory immunities and liabilities defined by the Act. In parallel, over 200 minor ports (administered by State governments under the Indian Ports Act 1908) handled regional and coastal trade. Under the trust model, port infrastructure development was publicly financed, and tariffs for services were regulated by bodies like the Tariff Authority for Major Ports (TAMP). The liability of port trusts for cargo stored in port premises was delineated by statute, treating the port as a bailee of goods with obligations under the Indian Contract Act, 1872, subject to certain limitations (discussed in detail in Section V). Major port trusts had a near-monopoly on significant cargo terminals for decades, and legal disputes typically involved the port trust as a public authority.

B. Shift to Privatization and PPP: In the 1990s and 2000s, recognizing the need for enhanced efficiency and investment, India embarked on privatizing port operations through PPP models. Private participation took forms such as Build-Operate-Transfer (BOT) or Design-Build-Finance-Operate-Transfer (DBFOT) concessions for container terminals, bulk cargo berths, and port services. Under these arrangements, a private concessionaire would develop and operate a terminal for a fixed term (often 30 years) while the port trust retained ownership of the port land and acted as a landlord. This landlord port model gained momentum and today a substantial portion of traffic at major ports is handled by private terminal operators. For instance, the Jawaharlal Nehru Port (JNPA) and other major ports have multiple BOT terminals run by global port companies. Simultaneously, entirely private greenfield ports (classified as non-major ports) have developed such as Mundra and Krishnapatnam operating outside the major port trust framework but subject to state regulation. The legal framework had to adapt to this hybrid scenario: private operators are governed by concession contracts and general law rather than the full suite of port trust statutory provisions, raising questions about how liability is allocated between the port authority and the private operator in case of cargo claims or other losses.

C. Policy Framework and Infrastructure Push: The Government’s policy impetus through the Sagarmala initiative (launched 2015) and Maritime India Vision 2030 has dramatically increased investment in port infrastructure. According to official data, major port capacity rose from 1,598 MMT in 2022 to 1,630 MMT in 2024, and overall port traffic grew from 720 MMT to 820 MMT over the same period. Dozens of port projects have been bid out on PPP basis the Ministry of Ports identified 81 PPP projects worth over ₹424 billion to be awarded by 2024-25. A notable recent example is the approval of a new deep-draft major port at Vadhavan, Maharashtra, to be developed with private investment at an estimated cost of ₹76,220 crore. With such expansion, the legal regime faces new scenarios: multi-party arrangements in port operations, foreign investors in port concessions, and complex risk-sharing provisions. The government has correspondingly updated laws and regulations most significantly by replacing the 1963 Act with the Major Port Authorities Act 2021, and by issuing new Model Concession Agreements and tariff guidelines. This evolving framework aims to give operators more autonomy (for example, freedom to set tariffs as per market conditions), while also establishing new regulatory bodies for oversight and dispute resolution (like the Major Ports Adjudicatory Board). Nonetheless, these changes also bring legal ambiguities, especially concerning liability: under PPP, if cargo is damaged due to the act of a private terminal operator, does liability rest with the operator, the statutory port authority, or both? How are claims to be pursued and defended in such a multi-layered structure? These are part of the fault lines examined later in this paper.

D. Emerging Challenges in Liability and Disputes: The intersection of public law (port authorities as statutory bodies) with private law (concession contracts and tort duties of private operators) has led to a proliferation of disputes. By 2023, there were over 300 cases pending in courts or arbitration involving port concession agreement disputes across major and minor ports. Many stem from issues like revenue sharing, tariff setting, or performance obligations. In the context of cargo claims specifically, the involvement of multiple actors (stevedores, terminal operators, shipping lines, freight forwarders) complicates the question of who is legally liable for loss or damage at different stages of the transit. The legal infrastructure including courts and specialized tribunals has been responding. The Admiralty jurisdiction of Indian High Courts (reformed by the Admiralty Act 2017) provides a mechanism for cargo owners or insurers to arrest ships for securing claims, even when the underlying issue may involve port handling. Concurrently, the Ministry of Ports has introduced alternative dispute resolution channels for port-related contracts, such as a Conciliation and Settlement Committee (CSC) and the SAROD-Ports arbitration forum, to resolve issues without prolonged litigation. These bodies, and a newly created Adjudicatory Board under the 2021 Act, seek to handle conflicts arising from PPP agreements and even tariff or performance disputes. As of 2023, the CSC had seen 43 referrals (with only 15 fully resolved), indicating both the demand for and the challenges in these resolution mechanisms. The effectiveness of such forums in addressing liability claims (for instance, an indemnity claim by a shipping line against a port operator for cargo damage) remains to be fully tested. Thus, the backdrop of India’s port infrastructure push is one of rapid growth accompanied by significant legal recalibration an environment in which the rights and liabilities for cargo losses, damage, or delays must be clearly understood.

In summary, India’s maritime infrastructure expansion provides the context for re-examining port liability and cargo claims. The transition from a purely public port model to a mixed public-private system has not only operational implications but also legal ones, particularly in how accountability is assigned when things go wrong. The following sections turn to the specific legal regimes international and domestic that govern these issues, before delving into the substantive rules and case law on liability allocation.

III. International Conventions on Carriage of Goods by Sea: Hague-Visby and Hamburg Rules

International conventions have long sought to harmonize rules on carriers’ liabilities for cargo, directly impacting how cargo claims are framed worldwide. India’s approach to these conventions reflects a cautious blend of adoption and adaptation. This section examines the Hague-Visby Rules and the Hamburg Rules the two major conventions relevant to ocean cargo liability and discusses their status and influence in Indian law.

A. The Hague and Hague-Visby Rules in Indian Law: The Hague Rules of 1924 were the first widely adopted convention defining carriers’ responsibilities and immunities under bills of lading. India, though not an original signatory, implemented the substance of the Hague Rules through its domestic legislation the Indian Carriage of Goods by Sea Act, 1925 (COGSA). Enacted shortly after the UK’s 1924 Act, the Indian Act annexed a Schedule closely mirroring the Hague Rules, thereby imposing the convention’s standards on shipments from Indian ports to any other port (whether in India or abroad). The 1925 Act thus codified key carrier duties (seaworthiness, proper care of cargo, etc.) and defenses (nautical fault, perils of the sea, etc.) as per the Hague template. Notably, India did not formally ratify the Brussels Convention of 1924 due to specific concerns (such as requirements of issuing bills of lading for coastal sailings), but the substantive rules were given effect domestically.

By the late 20th century, the Hague regime had been updated by two protocols forming the Hague-Visby Rules (1968) and the SDR Protocol (1979), which raised liability limits and refined provisions. India did not accede to those protocols internationally. However, importantly, India amended its Carriage of Goods by Sea Act in 1992 to incorporate many Hague-Visby changes. The COGSA (Amendment) Act, 1993 (Act 28 of 1993) introduced the higher liability limits and other modernizations effective from 1992. For example, the liability cap was updated to 666.67 Special Drawing Rights (SDR) per package or 2 SDR per kilogram (whichever is higher), aligning with the Visby/SDR Protocol thresholds instead of the old £100 gold value. Definitions were expanded to include containerized cargo as a package unit where enumerated. Thus, as of now, Indian statutory law is effectively a Hague-Visby regime, even though India’s adherence is via domestic incorporation rather than formal treaty ratification. Indian courts, in practice, apply these statutory Rules to all shipments from Indian ports, and often also to inbound shipments or other cases through contract clauses. It is worth noting that the Indian Bills of Lading Act, 1856 and general contract law supplement this framework by governing title to sue and privity of contract for holders of bills of lading.

One nuance is that the Carriage of Goods by Sea Act, 1925 (as amended) by its terms applies to “carriage of goods by sea in ships carrying goods from any port in India to any other port, whether in or outside India”. It does not automatically govern imports into India from foreign ports. In those cases, the applicable rules may be determined by the contract (bill of lading clauses often incorporate one of the international regimes) or the law of the port of shipment. In litigation before Indian courts, however, the Hague/Hague-Visby rules typically still govern by virtue of either the bill’s choice of law or as part of Indian common law of carriage. Indeed, Indian admiralty courts have consistently followed the Hague and Visby standards in cargo claim cases. The Supreme Court of India has acknowledged that Indian statutes “lag behind” contemporary international law developments in some respects for instance, noting in 1992 that while the UK had adopted Visby Rules in its 1971 Act, Indian legislation had not yet formally done so at that time. That legislative gap was partly closed by the 1993 amendments, although India still has not ratified the Visby Protocols per se. The upshot is that claimants in India enjoy the higher Visby liability limits and other improvements (like container enumeration rules and no fault liability for certain deviations) through domestic law. Indian courts also generally honor the one-year time bar for cargo suits (Article III Rule 6 of Hague/Hague-Visby), unless extended by agreement or estoppel.

B. The Hamburg Rules and Their (Non-)Adoption: The UN Convention on the Carriage of Goods by Sea, 1978 (Hamburg Rules) represented an attempt to modernize and balance the law in favor of cargo interests. It abolished some carrier defenses (most notably the “nautical fault” defense for crew negligence in navigation), expanded the carrier’s period of responsibility to “port to port” (rather than tackle-to-tackle), introduced a slightly higher liability limit, and provided for liability for delay, among other changes. The Hamburg Rules entered into force internationally in 1992 and were championed by many developing nations as a fairer regime for shippers. In India’s case, the government deliberated on adopting Hamburg, and the All India Shippers’ Council at one point urged ratification of the 1978 Convention. However, India has not ratified the Hamburg Rules to date. Consequently, the Hamburg Rules do not have direct legal force in India.

That said, the influence of Hamburg can be seen in Indian legal discussions and judgments. The Supreme Court of India in the landmark M.V. Elisabeth case (1992) lauded the Hamburg Rules as “a great improvement” on Hague Rules, noting they prescribe carriers’ liabilities “far more justly and equitably” and correct the pro-carrier tilt of Hague. The Court observed that although India lagged in ratifying such conventions, the principles embodied in them, being part of “the common law of nations” and the “felt necessities of international trade,” could inform the Indian common law. This dictum suggests that where Indian statute is silent or ambiguous, courts may interpret obligations consistently with modern international norms. In practice, however, since Indian statute law (COGSA 1925 as amended) covers the field for outbound shipments, there is limited room for Hamburg-based rules to be applied. An area where Hamburg’s influence could be felt is in multimodal transport India’s Multimodal Transportation of Goods Act, 1993 (enacted after Hamburg came into force) governs door-to-door transport contracts and was influenced by the 1980 UN Multimodal Convention. That Act provides that if the loss or damage in a multimodal transit occurs in a certain leg and an international convention applies to that leg, then the convention’s rules govern that leg. Conceivably, if a multimodal contract stipulated Hamburg Rules or the incident took place in a Hamburg Rules jurisdiction, an Indian court could be called upon to recognize Hamburg rules for that segment. Such scenarios are rare, and to date Indian jurisprudence has not applied Hamburg provisions in a reported cargo claim.

In essence, the Hamburg Rules remain aspirational in the Indian context, frequently cited academically and in judgments for the proposition that carrier liability should be stricter, but not forming part of positive law. Indian shipping circles have also been aware of the even newer Rotterdam Rules (2008), though India has taken no step towards ratifying them. As of 2025, India appears content with the Hague-Visby based regime, balancing carrier and cargo interests as per its 1925 Act (with 1993 amendments). The Hamburg philosophy has, however, nudged Indian courts toward pro-cargo interpretations in some cases, and remains a reference point in law reform discussions.

C. Summary of International Regime Application: To summarize, Indian law on carriage of goods by sea is grounded in the Hague/Hague-Visby Rules framework. The statutory incorporation of Hague-Visby provisions (e.g. SDR-based limits, liability exceptions, and obligations for seaworthiness and care) means that these rules are binding on carriers and cargo owners in most instances involving India. The Hamburg Rules, while not adopted, represent a set of higher standards that Indian courts acknowledge as more equitable to cargo owners. Their spirit influences legal commentary and perhaps signals a direction for future reform, but for now they do not override the established Hague-Visby-based liabilities in Indian ports. In the next section, we turn to India’s domestic statutes that govern port operations and liabilities, to see how these international carriage principles interface with the specialized regime of port authorities and operators.

IV. Indian Statutory Regimes Governing Port Liability and Cargo Claims

Liability for cargo loss or damage at ports lies at the intersection of multiple statutes in India. Key among these are laws specific to port authorities, general maritime laws, and statutes governing carriage and multimodal transport. This section outlines the principal statutes and their provisions concerning port liability and cargo claims.

A. Major Port Trusts Act 1963 (Repealed) Framework for Port Liability: Until recently, the Major Port Trusts Act, 1963 was the cornerstone legislation for India’s major government-run ports (Mumbai, Chennai, Kolkata, etc.). Several provisions of the MPT Act defined the extent of port trust liability for goods in their charge and provided certain defenses and procedures:

• Section 42 of the Act detailed the port’s duty to take charge of goods landed from a vessel and issue a receipt. Once the port issued a receipt for the goods, the statutory effect was a transfer of custody and responsibility from the ship to the port. In fact, §42(7) explicitly stated that after the port takes charge and gives a receipt, “no liability for any loss or damage…shall attach to” the shipowner or agent. This mechanism meant the port trust became the principal bailee of the goods upon landing, and the carrier’s responsibility under the bill of lading typically ceased at that point (unless the loss was already incurred aboard ship).

• Section 43 of the MPT Act set forth the “Responsibility of Board for loss, destruction or deterioration of goods.” In general, §43(1) provided that the port’s responsibility was that of a bailee under sections 151, 152, and 161 of the Indian Contract Act, 1872 (the usual bailment standard of reasonable care), subject to certain provisos. One proviso was that the Board’s responsibility would not attach until the port had issued the official receipt for the goods (i.e., before formal receipt, the port was not liable). Another proviso (which was inserted by amendment in 1974) was that no responsibility would attach for goods after a specified time period in storage, unless notice of loss was given within that period or the port failed to auction unclaimed goods as required. The Act empowered ports to make regulations fixing a time limit after which their liability would terminate for uncleared goods (often 2 months, in line with auction provisions). In effect, the port trust had a statutory time-limit on liability for prolonged storage, encouraging consignees to clear cargo timely.

• Limitations on Liability: The MPT Act also contained certain financial liability limits and immunities reminiscent of older common carrier laws. For instance, prior to 1975 amendments, port trusts had clauses limiting liability for certain valuable goods unless declared (similar to Carriers Act provisions). These were largely repealed or revised, but §43 incorporated by reference the Contract Act’s bailment rules which include that a bailee is not liable for loss if due care was taken (unless there was a special contract to the contrary, and notably the Act omitted the words “in absence of special contract” from the standard, effectively disallowing ports from contracting out of liability for negligence). Another protective provision, §87 of the old Bombay Port Trust Act (analogous to §121 MPT Act), gave immunity to the Board for acts of its employees done in good faith or for certain kinds of loss (e.g., loss due to certain conditional exempted risks). The Supreme Court’s 1980 decision in Trustees of Port of Bombay v. Premier Automobiles Ltd. interpreted these in detail (discussed in Section V).

• Notice Requirement and Suit Limitation: A significant procedural limitation was found in Section 120 of the MPT Act, which required that any person seeking to sue the port trust must give one month’s prior notice in writing, and no suit could be filed after six months from the date the cause of action accrued. This is a stark departure from the normal three-year limitation for breach of contract or bailment under the Limitation Act. The six-month claim bar, coupled with mandatory notice, served to protect ports from stale or indeterminate claims but also posed a trap for unwary claimants. Many cargo interests (or subrogated insurers) had to be mindful of this shortened limitation period when pursuing port trust for negligence or conversion. (Notably, claims against the ship/carrier under the bill of lading would typically be subject to the one-year period by statute or contract; thus a claimant potentially had even less time six months to go after the port, meaning in practice port claims had to be lodged very promptly.)

In summary, under the MPT Act regime, a major port trust’s liability for cargo was that of a bailee with a duty of reasonable care, but bounded by statutory conditions: the liability started when the port took custody (receipt issued) and could end by operation of time limits; and suits had to be brought quickly and with notice. These rules significantly defined the risk landscape: cargo owners often sued carriers (within one year) for losses, and carriers’ insurers in turn might attempt recovery from port trusts only to face the port’s statutory defenses. As we will see, case law evolved to interpret the exact scope of port’s bailment duty and immunities.

B. Major Port Authorities Act 2021 New Era, Continuity and Change: In November 2021, the Major Port Authorities Act, 2021 came into effect, overhauling the governance structure of major ports. The new Act aimed to grant greater autonomy to ports and rationalize the regulatory framework for PPP projects. Pertinently, it repealed the 1963 Act. We consider how the new Act addresses (or omits) provisions on cargo liability:

• The Major Port Authorities Act, 2021 does not explicitly re-enact a section equivalent to §43 of the old Act spelling out bailee responsibility. This absence suggests that a port authority’s liability for goods may now simply be governed by general principles of bailment and tort, without a special statutory formulation. However, the 2021 Act does contain savings provisions (Section 21) which ensure continuity of obligations all contracts, liabilities and proceedings of the old port trust are taken over by the new Port Authority. Thus, one could argue that the standards of care and liability under the old Act continue to inform the port’s duties unless and until modified by new regulations or contracts. Importantly, the notorious six-month limitation and notice requirement appears to have been dropped; the 2021 Act has no clause analogous to old §120. Therefore, claims against a port authority might now be subject only to the normal Limitation Act period (three years for breaches of duty), and no preliminary notice is mandated by the statute. This is a significant change that potentially increases exposure of port authorities to litigation, aligning them with ordinary defendants rather than giving special time-bar immunities. Whether this was an intentional policy shift or an oversight is unclear, but the result is a more level playing field for claimants.

• The 2021 Act retains provisions dealing with liens and enforcement: e.g., Section 28 gives the Board a lien on goods for unpaid rates and the power to detain them, and Section 29 provides for a ship-owner’s lien for freight to be enforced by the port at the shipowner’s request. Section 33 permits sale of goods remaining uncleared or to satisfy dues, and Section 34 allows recovery of port charges by distraining or arresting vessels (akin to the old §64 of MPT Act). These indicate continuity in the port’s remedies against cargo and vessels. They also indirectly relate to cargo claims: for instance, if freight is unpaid, a port may retain the cargo on behalf of the carrier (exercising the carrier’s lien) under Section 29. If goods are abandoned and accrue storage charges, the port can auction them to recover its charges (limiting its liability for any loss thereby). Such provisions help ports mitigate losses and limit circumstances where a port might be liable for deterioration of goods (since the law encourages prompt disposal of uncleared cargo).

• The Major Ports Adjudicatory Board introduced by the 2021 Act (Sections 54-60) is tasked with, inter alia, resolving disputes between port authorities and PPP concessionaires, and reviewing port tariffs. While not directly about cargo claims by third parties, this Board provides an in-house specialized forum for certain disputes that could touch on liabilities e.g., if a concessionaire and port authority disagree on who is to bear liability or insurance for a particular incident under the concession agreement, the Adjudicatory Board might get involved. As of 2025, the Board is not fully operational (the presiding officer had yet to be appointed), so its impact remains to be seen.

• It is important to note that even under the new Act, when a major port Authority delegates cargo-handling to a private entity (under a PPP concession or license), that private operator is regarded as having the responsibilities of a bailee. Under the 1963 Act, §42(6) explicitly said any person (other than the Board) handling goods by arrangement shall have the responsibility of a bailee. The 2021 Act does not restate this, but the principle likely endures: the concession agreement and general law would impose on the terminal operator the duty of care for goods in its custody. Hence, an injured cargo owner can directly sue the PPP operator for negligence or breach of duty. The port authority itself might or might not be liable depending on circumstances (vicarious liability or non-delegable duty arguments could arise, though generally the operator would be primarily liable).

In summary, the Major Port Authorities Act, 2021 ushers in a modern governance scheme and appears to relax some of the port’s former statutory shields (notably the strict notice and limitation clause). The port authority remains empowered to control and secure goods for dues, but liability norms are to be drawn from general law and the specifics of contracts. We will later discuss how this may affect claim strategies.

C. Indian Ports Act 1908 (for Non-Major Ports): The Indian Ports Act, 1908 applies to all ports other than major ones (and also provides basic navigation and safety regulations for all ports). While this Act is mostly regulatory (covering port health, conservancy, pilotage, etc.), it has a few provisions touching liability. For example, Section 36 of the Act (as amended) gives port officials certain immunities for acts done with due care. More pertinently, Section 31 of the Indian Ports Act imposes liability on the owner of a vessel for any damage caused to port property and authorizes the port to detain the vessel until compensation is paid. This is a reverse scenario where the port is the claimant (such as if a ship allides with a jetty). It underscores that even outside the major port system, ports (often run by State maritime boards or private entities) have statutory rights against ships. However, for cargo claims occurring at non-major ports (like a private port), the Indian Ports Act does not prescribe a bespoke liability regime akin to the MPT Act’s bailee provisions. A private port or a State maritime board would thus be liable under common law principles of bailment and negligence, and any terms of the contract with the user. There may be State-level port regulations that require a notice of claim or limit liability, but those vary. In practice, many private ports issue conditions of trade or standard operating terms seeking to disclaim or limit liability (for example, limiting liability to a certain monetary amount unless the higher value of cargo is declared, etc., akin to warehousemen’s terms). The enforceability of such terms would depend on their reasonableness and communication to the user, and they cannot override statutory duties (for instance, a disclaimer would not protect against proven negligence causing fire if challenged under general law). Because non-major ports handle a large share of cargo (almost 45-50% of total cargo in India), these liability questions are significant; yet, since no uniform statute like MPTA applies, disputes are resolved on general contract and tort law.

D. Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017: Cargo claims and port-related claims also interact with admiralty law. The Admiralty Act 2017 consolidated India’s laws on arrest and maritime claims, conferring jurisdiction on certain High Courts. Under this Act, “maritime claims” include claims for loss or damage to goods carried on a ship, as well as claims related to port or harbour charges and damage to port infrastructure. Specifically, Section 4(1)(n) of the Act lists “loss of or damage to goods carried on board the vessel” as a maritime claim, and Section 4(1)(d) includes “loss or damage caused by the operation of a vessel” (which can cover damage by a vessel to port property). Section 4(1)(e) adds “claims relating to...use of port, canal, dock etc. including fees or charges”. Moreover, the Act classifies certain claims as maritime liens which have priority notably, claims for port dues and pilotage are given the status of maritime liens under Section 9(1)(d) and Section 9(1)(e), albeit with a lower priority than crew wages and salvage. For cargo claims, the Admiralty Act did not incorporate the concept of a maritime lien for cargo damage per se (that remains an in personam claim against the carrier, or a right in rem against the ship by way of a statutory right if conditions are met).

What the Admiralty Act changes for our context is primarily procedural: A cargo owner (or insurer) can arrest a ship in an Indian port as security for a claim for damage to cargo, even if the loss occurred outside India, provided the Admiralty Act criteria are met (for example, the ship is present in Indian waters and the claim falls under section 4). Likewise, a port authority or operator can arrest a ship for unpaid port charges or for damage caused to the port. This has been tested in cases: Paradip Port Trust/PICT vs M.V. Debi (Orissa HC 2024) is one where a PPP terminal operator of Paradip Port was allowed to arrest a vessel to recover outstanding berth hire charges. The defendant had argued that only the port authority (Paradip Port Trust) should have standing, but the court found the concessionaire could proceed since it was the entity owed the charges, confirming that concessionaires can invoke admiralty jurisdiction. Similarly, in Angre Port Pvt. Ltd. v. TAG 15 (Bom HC 2022), a private port (Angre Port) successfully arrested a vessel for its port dues, reinforcing that even non-major ports can access admiralty remedies.

For cargo damage claims, the Admiralty Act’s significance is that it does not distinguish whether the damage occurred at sea or during loading or discharge. If the claim is “against the vessel” (usually through the carrier’s responsibility), the arrest can secure it. However, if a claim is purely against a port or terminal (e.g., cargo destroyed in a port warehouse due to port’s fault), admiralty jurisdiction may not directly apply since that is not a claim against a ship or its owner. In such cases, the claimant must proceed in a civil suit against the port/operator. This dichotomy sometimes leads to forum choices: cargo interests might sue the carrier in admiralty (which can get security by ship arrest) and the carrier in turn might sue the port in a separate action for indemnity, or all parties might be joined in one action if jurisdiction permits. Admiralty courts in India, as courts of cognizance over maritime contracts and torts, have in some instances allowed joinder of port authorities as co-defendants in an admiralty suit to avoid multiplicity, but the basis remains an in personam claim against the port.

E. Merchant Shipping Act, 1958 and Limitation of Liability: The Merchant Shipping Act, 1958 (MSA), India’s principal legislation on shipping, contains provisions enabling shipowners to limit their liability for maritime claims. India, through the MSA (Amendment) Act 2002, gave effect to the IMO’s LLMC 1976 convention (with 1996 Protocol limits) in Chapter VA of the MSA. This means that for claims such as cargo damage, the shipowner (and by extension, charterers) can constitute a limitation fund in court to cap total liability as per tonnage-based limits. This is relevant to cargo claims because, while the Hague-Visby Rules impose per-package limits on carrier liability, a catastrophic event could produce claims exceeding even those; shipowners then may seek global limitation under the MSA. Under Section 352A of the MSA, claims for loss of or damage to goods are subject to limitation along with other property claims. For example, if cargo on board and cargo on shore are both damaged by a vessel’s negligence (say a fire spreads from ship to dock warehouse), the shipowner could limit liability for all claims together. Notably, port authorities themselves could invoke this if considered a “shipowner” for any vessel they own (e.g., a port’s dredger causing damage), but more commonly it’s ships invoking it against cargo and port claims. The LLMC limits are much higher than Hague-Visby package limits in aggregate, but could still truncate recovery if numerous claims compete.

F. Multimodal Transportation of Goods Act, 1993: This law governs transport under a single contract involving multiple modes (road, rail, sea, air). Many container movements are multimodal, where an MTO (multimodal transport operator) issues one document for door-to-door delivery. The MTG Act 1993 provides that the liability of the MTO in case of known damage occurring in a particular leg is determined by the law applicable to that leg. So if the leg is ocean carriage from a foreign port to India, and the damage happened at the port of discharge in India under MTO custody, one might argue the port’s legal regime (bailee liability) applies for that portion. The Act also sets a basic liability of 2 SDR per kilogram for unknown-occurrence losses, which is similar to the Hague-Visby weight-based limit. While not directly about port authority liability, the MTG Act can draw ports into the liability net as performing parties. If a multimodal contract is in play and cargo is lost in a port warehouse before final delivery, the MTO is liable to the cargo owner but may have recourse against the port operator who actually handled the goods at that stage. The time limits under the MTG Act (9 months notice of claim, suit within 3 years) could intersect with port time bars. Given the complexity, multimodal cases often end up negotiating liability apportionment among carriers, sub-carriers, and terminal operators.

G. Summary of Statutory Landscape: The legal regime in India comprises multiple layers: specialized port statutes (old and new) that establish when and how ports bear responsibility; carriage laws aligning with international rules; admiralty laws enabling enforcement of claims against ships; and other ancillary statutes (limitation of liability, multimodal carriage, etc.) that can all play a role in a given cargo claim scenario. For a cargo owner or insurer seeking redress for loss or damage, it is crucial to identify the correct cause of action and defendant: is it against the carrier under the bill of lading (engaging COGSA and Admiralty jurisdiction), or against the port/terminal as bailee (engaging Contract Act principles and perhaps port Acts), or both? The statutory framework provides different remedies and limitations depending on the choice. Having outlined these laws in general, we now proceed to examine in detail how they operate in practice, particularly focusing on the concept of the port as bailee, the allocation of fault between carriers and ports, and how courts have resolved contested issues of liability.

V. Port as Bailee: Responsibilities and Immunities under Indian Law

A cornerstone of port liability in Indian law is the characterization of the port (or terminal operator) as a bailee of the goods upon taking custody. This section explores the scope of that bailee obligation, the standard of care required, and the statutory or judicially crafted immunities that limit port liability. We also look at how Indian courts have interpreted these principles in key cases.

A. Bailee Duties of Port Authorities: Under Section 151 of the Indian Contract Act, 1872, a bailee is bound to take as much care of the goods “as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value.” Section 152 states that in absence of any special contract, the bailee is not liable for loss, destruction, or deterioration of the thing bailed if he has taken the amount of care described in Section 151. Section 161 provides that if the bailee wrongfully refuses to deliver goods or is negligent, he is responsible for any loss from that point even by accident. These general principles apply to any party in possession of goods belonging to another (gratuitously or for reward). The port’s role fits squarely into this definition once it has custody of imported or to-be-exported cargo.

The Major Port Trusts Act 1963 explicitly tethered the port’s liability to these Contract Act provisions. As noted earlier, §43(1)(ii) made the port responsible as bailee under sections 151, 152, 161 of the Contract Act, while removing the phrase “in the absence of special contract” from Section 152 in this context effectively preventing port trusts from contracting out of liability for negligence. Thus, a port could not, by form notices or receipts, exempt itself from the consequences of its failure to exercise due care. The duty of care required is “reasonable care” as per an ordinary prudent owner test. In practice, this means the port must have appropriate safeguards for stored cargo: e.g. secure storage facilities, fire prevention measures, protection against theft or pilferage (with proper fencing, access control and security patrols), and safe handling practices to avoid physical damage (proper stacking, avoiding water damage, etc.). If the port can demonstrate it took such care and a loss still occurred (say, due to an unforeseeable flood or a well-concealed latent defect in the goods), it may avoid liability under the bailee standard.

B. Notable Judicial Interpretation Premier Automobiles (1980): The leading case that examined port trust liability as bailee is Trustees of the Port of Bombay v. Premier Automobiles Ltd., decided by the Supreme Court of India in 1980. In that case, machinery imported by Premier Automobiles was damaged while in the custody of the Bombay Port Trust. The Port Trust invoked an immunity under the Bombay Port Trust Act (BPT Act, 1879) then applicable, which was similar in effect to the MPT Act provisions. The specific legal issue was whether the port could be held liable for negligence of its employees given a statutory clause that protected the Board from liability for “misfeasance, malfeasance or non-feasance” of its servants done in execution of the Act (analogous to §87 of BPT Act). The Bombay High Court had initially found the port liable as bailee, but the Supreme Court reversed that finding. The Supreme Court clarified that the Port Trust’s duty was indeed that of a bailee under the Contract Act meaning the burden was on the port (once goods were proved damaged in custody) to show it had taken due care. However, the Court also held that the statutory immunity (in that case BPT Act §87(2)) insulated the Port Trust from liability for losses caused by acts of port employees unless the Port Trust failed to exercise due diligence in their selection or supervision. The Court read the two provisions together: Section 61-B of the BPT Act imposed bailee responsibility (similar to MPT §43), but Section 87 carved out that the Port Trust is not liable for the servants’ acts (ordinary negligence) as long as they occurred in the course of port operations and without the Board’s connivance or default.

This effectively meant that for the Port to be held liable, something more than simple negligence of a handling worker had to be shown either a systemic failure amounting to the Port Trust’s own negligence or a scenario not covered by the immunity. In Premier Automobiles, the Supreme Court concluded the damage was due to mishandling by port labor (dropping of the machinery) and, applying the statute, held the Port Trust was not liable because of the statutory immunity. The suit against the port was dismissed, leaving the importer to bear the loss (or recover from the carrier or insurer, if possible). Importantly, the case underscored that the statutory scheme can override general bailee liability: while the bailee standard creates a prima facie liability for unexplained loss, an immunity provision can provide a defense even when due care was not in fact taken by an individual employee.

It should be noted that the Premier Automobiles decision was under the BPT Act of 1879. The Major Port Trusts Act, 1963, which replaced the older Acts for all major ports (including Bombay eventually), had a similar immunity clause in §121 for acts done in good faith, but that primarily protects against liability for bona fide acts and certain accidents like defective moorings (and might not directly excuse negligent cargo handling). The interplay between §43 (bailee duty) and §120/§121 (notice requirement and good faith protection) under the MPT Act was somewhat different. The immunity for employee negligence in port operations was more implicit in the MPT Act’s requirement of proving fault rather than a blanket exclusion. After Premier Automobiles, port trusts likely tightened supervision and also ensured robust disclaimers in their documentation though legally they couldn’t contract out of negligence, the practical hurdles (like short limitation and proving specific negligence) continued to favor the ports.

C. The Bailor-Bailee Relationship and Who is “Owner” of Goods: Another legal question that arose in context of port charges but is instructive for liability is: who is the bailor and who is the bailee at various times? In a typical import scenario, the consignee (cargo receiver) becomes the bailor once the cargo is offloaded, and the port trust is bailee. However, until the bill of lading is endorsed and delivered to the consignee, the ship’s agent often interacts with the port and could be seen as the bailor (agent of the cargo) for storage. This came up in Port of Madras v. K.P.V. Sheikh Mohamed Rowther (1967 SC) and subsequent cases dealing with port storage and demurrage. The Supreme Court in Rowther (a Constitution Bench) held that the steamer agent who brings in goods and hands them to the port is in the position of a bailor until the consignee comes into the picture. The port trust is a bailee vis-à-vis whosoever is the owner or entitled person for the goods at the time. This has implications: the port owes the duty of care to the true owner even if the owner is not physically present. Once the consignee presents documents and seeks delivery, the bailee relationship shifts to between port and consignee. If the port negligently causes loss before the consignee claims goods, the consignee (or insurer via subrogation) can sue the port even though initially the agent deposited the goods.

The definition of “owner” in the MPT Act was broad (including consignor, consignee, shipper or agent at different times). This was litigated in context of who must pay port charges for uncleared cargo, which indirectly touches on liability because if neither the vessel agent nor consignee takes responsibility, the port has to dispose of the goods. The Supreme Court’s 2020 judgment in Cochin Port Trust v. Arebee Star Maritime (three-judge bench resolving conflicting precedents) clarified that once the port assumes custody, the steamer agent is not automatically liable for storage/demurrage unless fault can be attributed or specific circumstances apply. It also held that the port, as a State entity, must act reasonably to mitigate loss by auctioning unclaimed goods timely. While Arebee was about charges, the reasoning underscores that a port cannot sit idle as goods deteriorate or accumulate demurrage it has an obligation (akin to a bailee’s duty not to let goods spoil) to either deliver, or if abandoned, lawfully dispose of goods after notice. Failing that, the port might lose the right to recover warehousing charges beyond a reasonable period, and by parity of reasoning, could be considered negligent if goods ruined due to inaction.

D. Immunities and Exceptions to Liability: Apart from employee-negligence immunity (as in Premier Automobiles) and time-bar defenses, ports have other shields:

• Act of God / Force Majeure: If loss is caused by an extraordinary natural event (flood, cyclone) that the port could not reasonably foresee or guard against, the port as bailee can invoke that as a defense (the burden would lie on port to show the event was the sole cause and all precautions were taken). Many port conditions of service explicitly list force majeure events for which the port is not responsible, but even without such stipulation, this is inherent under bailee law (since due care does not extend to preventing truly unforeseeable catastrophes).

• Contributory Negligence of Cargo Interests: If the damage partly results from the act or omission of the cargo owner or its agent, the port may either be exonerated or have its liability reduced. For example, if a consignee fails to collect a cargo promptly and it spoils due to delay, or if the cargo was improperly packed (an inherent vice) and that caused the loss, the port can argue no liability. Under Article IV Rule 2 of Hague Rules (which strictly applies to carriers, not bailees), “insufficiency of packing” and “inherent vice” are defenses. A port might analogously argue inherent defect or poor packing as a cause of deterioration for which it should not be blamed. Indian courts would treat that as a factual issue under bailment law was the loss due to bailee’s negligence or an inherent problem with the goods? If latter, port not liable.

• Statutory Exclusions: The old MPT Act and similar port laws sometimes explicitly excluded liability for things like loss of certain valuables unless declared. For instance, Section 43(2) of MPT Act (now repealed) provided the Board not responsible for loss of bullion, currency, precious stones, etc., exceeding a set value unless their value and description were declared in writing at the time of landing and extra charges paid. These were typical of common carrier laws to put the onus on shippers for high-value items. If such undeclared valuables were lost, port could avoid liability entirely. It appears the 2021 Act did not carry forward these specific exclusions, but ports may still operationally require disclosure of special cargos and limit liability if not disclosed, via contractual terms.

• Good Faith Acts: As per old §121 MPT Act, any act done in good faith under the Act or regulations shielded the port and staff from legal proceedings. “Good faith” generally means without negligence and with honest intention. This could cover, for example, disposal of leaky hazardous cargo by port to prevent wider damage if done in good faith, the port might not be liable to the cargo owner for the value, as it was an act under statutory authority. Another example: a port may move or jettison goods in emergency to protect life or property; such acts if done bona fide are protected.

• Limitation of Liability (Shipowner’s right): Not directly a port immunity, but if a port is sued jointly with a shipowner and the shipowner invokes global limitation (LLMC), the port (if found concurrently liable) might benefit indirectly because the claimant’s total recovery gets capped. This is rare in practice for port liability since typically the port and ship aren’t sued in one proceeding except perhaps where both contributed to damage (e.g., a ship drops cargo into sea due to crew fault and port’s faulty equipment also played a role). Indian courts have not specifically addressed whether a port can separately limit liability akin to a shipowner (ports are not covered by the LLMC Convention), but arguably they cannot they are liable for full loss unless some other contract or statute limits them.

E. Burden of Proof Dynamics: In cargo loss cases against a port, Indian courts generally place the evidentiary burden on the port once the bailor (cargo owner) shows goods were delivered into port’s custody in good order and out-turned damaged or short. This is akin to the principle in bailment and carriage that the bailee/carrier must explain the cause of loss and prove exercise of due care. If the port fails to show absence of negligence, it is liable. However, if the port can show it took all reasonable measures, or that the loss was due to excepted causes, the claimant fails. For example, in a Madras High Court case Home Insurance Co. Ltd. v. Port of Madras (1968, arising from goods pilfered in port), the court held the port was not liable because it proved regular security measures were in place and no fault could be pinpointed essentially persuading the court of due care (this case went to Supreme Court as well, cited in later judgments).

Additionally, if a cargo owner or insurer pursues the carrier (shipping line) for loss that actually occurred in port custody, the carrier under the bill of lading may defend by saying the damage occurred outside the carrier’s period of responsibility, or due to an excepted cause after discharge. If the court finds the carrier not liable (because the loss happened after discharge into port’s hands), then the claimant’s remedy is squarely against the port as bailee. This scenario underscores why understanding the transfer of risk point is crucial: many ocean bills of lading are “Port-to-Port” (carrier liable from loading at origin to discharge at destination port), which can include handling to the extent of discharging from the ship’s tackle. Once goods are on the quay or in the transit shed and the port gives receipt, the carrier can argue its job is done. The cargo owner must then look to the port for any mishap thereafter. Indian law accommodates this split by having the port’s bailee obligation pick up where the carrier’s Hague Rules obligation leaves off. That said, there are instances where a bill of lading has a “through transport” clause or the carrier arranges delivery to final point in such cases, the carrier remains liable for the entire period including port storage (and the carrier in turn may have recourse against the port). But in traditional liner shipping under Indian conditions, the separation is clear: once the port takes charge, the carrier’s liability under the carriage contract ceases (except for latent damage or misdelivery issues).

F. Misdelivery and Port’s Role: A particularly sensitive aspect of port liability is misdelivery delivery of goods to the wrong person. Typically, the bill of lading must be presented for delivery. In India, by custom and the Customs Act requirements, ports deliver imports only upon production of the customs-cleared delivery order issued by the ship’s agent and surrender of the original bill of lading by the consignee or its agent. If the port delivers cargo without the proper documentation or to someone not entitled, it can be liable for conversion to the true owner. However, ports often rely on shipping agents’ delivery orders, effectively acting as a custody agent implementing the carrier’s instructions. Indian courts have held that the ultimate responsibility for misdelivery without original bill of lading lies with the carrier (since the carrier’s contract promises delivery to the rightful holder of the bill). The port in such cases might be seen as an agent of the carrier in effecting delivery. For example, if a port releases goods against a forged delivery order, the consignee can sue the carrier who in turn might claim against the port for negligence in verifying documents. The allocation of liability will depend on the facts: did the port fail to follow the established procedures that a reasonable bailee would (e.g., checking seals, verifying identity of truckers, etc.)? If yes, port shares liability. If the fraud was sophisticated and port followed all normal steps, the carrier might bear the risk for authorizing release wrongly. There is sparse Indian case law specifically on port misdelivery, but given analogous common law principles and some English precedents, one can surmise an Indian court would impose a duty on the port to adhere to the delivery protocol and hold it liable for any deviation.

G. Effect of 2021 Legal Changes on Bailee Liability: With the transition to the Major Port Authorities Act 2021 and increasing private operation of terminals, some of the older immunities may no longer shield the entity actually handling cargo. A private terminal operator cannot claim the statutory immunities of the 1963 Act or sovereign protection; it is treated as any warehouse operator or handler under private law. Thus, if a private operator (say DP World at Nhava Sheva) damages cargo, the cargo owner can sue that operator and the defenses would be limited to proving lack of negligence or invoking any limitations in the contract with the consignee (if enforceable). The port authority (JNPA in this example) might not be sued at all if it never took custody or was not at fault. This scenario simplifies things in one way (clear tort liability of the private party), but complicates in another (privity of contract issues the consignee usually has no direct contract with the terminal, but as a bailee of goods the terminal still owes a duty of care in tort and bailment). There have been instances of High Courts allowing suits directly against terminal operators. For instance, Gateway Terminal India (GTI) case in Bombay High Court (unreported, circa 2012) where an importer sued the private terminal for container loss and the court entertained it on bailment principles.

Under the new Act, since the port authority can license out services, it will likely incorporate indemnity clauses in concession agreements requiring the private operator to deal with such claims and hold the authority harmless. From a claimant’s perspective, this means the actionable defendant is the operator themselves. The Major Port Authority might be added as a formal party if, say, the claim involves an argument of systemic failure or if any relief like declaration of non-liability for port charges is sought against the authority. But by and large, the fault line emerging is between public authority’s reduced direct role and the private operator’s increased accountability a shift from suing a statutory entity with special protections to suing a company subject to ordinary civil liability.

In conclusion, Indian law imposes on ports and their operators the obligations of a bailee to exercise due care of cargo in their possession, but layers this with certain statutory protections and pragmatic limitations. The jurisprudence has balanced holding ports accountable (to prevent negligence or casual attitudes towards others’ property) with shielding them from open-ended or unfair burdens (via notice requirements, employee immunity for good faith acts, etc.). As the legal regime modernizes, the trend is towards aligning port liability more with general principles (similar to warehousemen) and relying less on statutory escape clauses. The next section will discuss how liability is allocated in practice between carriers and ports, and the procedural aspects of pursuing cargo claims in light of these legal rules.

VI. Liability Allocation in Cargo Claims: Carrier vs. Port vs. Other Stakeholders

When cargo is lost or damaged in the course of transit, multiple parties could potentially be at fault the shipowner/carrier, the port (or terminal operator), stevedores, inland carriers, etc. Determining who bears legal liability and to what extent is a central issue in cargo claims. In this section, we analyze how Indian law allocates liability between the carrier and the port, how international rules interface with port liability for loading and discharge operations, and the typical avenues for relief and indemnity among the stakeholders.

A. Period of Responsibility “Tackle-to-Tackle” vs. “Port-to-Port”: Under the Hague-Visby Rules (and thus Indian COGSA 1925 as amended), the carrier’s mandatory liability period is generally from the time of loading the goods onto the ship until the time of discharge from the ship (often termed “tackle-to-tackle” coverage). Many bills of lading incorporate this standard, meaning that once the cargo is lifted off the ship’s deck or tackle and set down on the quay (or in the custody of the port), the carrier’s obligations under the Rules cease. The carrier may include a clause that extends or clarifies this responsibility. Some modern bills use a “warehouse-to-warehouse” clause in insurance context, but legally carrier’s liability after discharge can become very limited, often treating themselves as mere agents in arranging onward storage. Indian Bills of Lading often state that the carrier’s liability for import cargo ends at the point of rest on the wharf or when the cargo is handed over to the port trust, whichever is earlier. Consequently, any loss or damage occurring after discharge but before delivery to consignee typically falls outside the carrier’s regime and into the port’s regime (bailee liability).

However, there are exceptions. If the carriage contract explicitly provides for a longer responsibility (e.g., a Through Bill of Lading covering inland transit or storage), then the carrier remains liable during that extended period and will have to answer for port mishandling as well though it may seek indemnity from the port. Absent that, the separation stands: the port/terminal becomes the principal liable party for on-shore incidents post-discharge. The Supreme Court of India recognized this division in Rowther and related cases by stating the steamer agent’s responsibility ends upon handing over goods to the port and the port acts as bailee for the consignee. Thus, if an importer finds cargo damaged after unloading, they often face a situation where the ship’s master/agent says “not our liability claim the port; we delivered in good order into the port’s custody.” The importer then must engage with the port’s claim procedures.

For export cargo, the reverse applies. The port trust as bailee takes goods when the shipper deposits them in the transit shed or stacking area. Once the goods are loaded onto the vessel, liability shifts to the carrier. If something goes missing or is damaged on the quay before loading, the port is on the hook; if damage occurs during lifting onto the ship or after, the carrier is responsible (unless it can invoke defenses).

B. Stevedores and Handling Contractors: In many ports, the physical handling (loading/discharge) is done by stevedoring companies or labor employed by either the ship or the terminal. Historically, at major Indian ports, stevedores were licensed by the port trust but hired by the shipowner/agent to work the cargo. Under the Hague Rules, the carrier is responsible for the acts of the stevedores (as they are performing loading/unloading as part of the carrier’s tackle-to-tackle duty). If a stevedore drops a crate while unloading and it breaks, the carrier is liable to the cargo owner under the bill of lading (since it happened during discharge). The carrier may then claim against the stevedore company for negligence (if a contract or tort claim is available). The port trust’s liability would not arise because until the cargo is landed and receipted, the port hasn’t taken custody. So one must pinpoint where the damage occurred: if during discharge operations (e.g., sling snapped mid-air), it’s the carrier’s problem; if after landing (e.g., dropped by a forklift operator of port while moving within the yard), it’s the port’s problem.

India follows this principle. In Madras Port Trust v. Hemchand and Co. (1976), for example, the port was sued for damage to a consignment of logs; it was found that logs were damaged while being unloaded by the ship’s gears before placement on shore. The court held the port trust not liable because it hadn’t assumed custody at that time; the liability lay with the carrier/stevedore. Conversely, once goods are on the quay and port’s stevedoring staff or equipment cause damage (say, a stack collapse), the port bears responsibility as bailee.

A complicating factor is that in some PPP terminals or private ports, the terminal’s staff do the entire operation including stevedoring, under contract with the vessel (or as part of port service). Who is liable then? Usually, the Himalaya Clause in the bill of lading extends the carrier’s immunities to servants and contractors (like stevedores) so that those entities can benefit from limitations or defenses of the carrier in case they are sued by cargo interests. Indian courts have generally upheld Himalaya clauses (e.g., British India Steam Navigation Co. v. Shanmughavilas Cashew 1990 SC recognized their validity). So a private terminal acting as stevedore might invoke the clause to say, “we have same defenses as carrier under Hague Rules.” But a Himalaya clause does not necessarily completely exempt them from direct liability; it just gives them the benefit of limitations and exceptions that the carrier has. If a cargo owner directly sues the terminal for a discharge accident, the terminal can likely enforce the SDR per-package limit or one-year time bar just like the carrier could, due to the clause. This indirectly affects how liability is allocated: it prevents cargo owners from sidestepping the carrier’s limitations by suing the port or handler.

C. Indemnity and Contribution between Carrier and Port: Often, when a loss occurs, the claimant will go after the carrier (since the carrier is contractually obligated via the bill of lading). The carrier may pay the claim (or have its P&I Club pay) and then seek recovery (“cargo indemnity claim”) from the party truly at fault be it the port authority or the terminal operator. In Indian law, there is no bar on such indemnity actions. If the carrier had to compensate the cargo under Hague-Visby obligations, it can sue the port under general law of tort or bailment alleging the port’s negligence caused the loss and thus the port should reimburse. The success of this depends on proving the port was negligent. The port might defend by saying the carrier settled without strict proof or that carrier’s own negligence contributed (for example, giving a faulty delivery order). These are essentially subrogation fights between giants. Some carriage contracts or port usage agreements include clauses for mutual indemnities e.g., ports often have provisions that the steamer agent will indemnify port for any claims by consignees and vice versa depending on fault. The Arebee Star Maritime case in 2020 indirectly dealt with such liability questions for storage charges, concluding that after a reasonable period, the port should auction goods and not hold the ship agent liable indefinitely. By analogy, one could say a carrier should not remain liable for cargo indefinitely after discharge if the consignee fails to collect at some point the port must act or bear consequences.

In practice, P&I Clubs (insurers for carriers) and port trust insurers often negotiate claims behind the scenes. For example, if there is a major incident (like a gantry crane collapse damaging many containers), the carriers might collectively pursue the terminal for recovery. Under Indian jurisdiction, such disputes can end up in arbitration if the port contract with carriers has an arbitration clause (as PPP concession agreements often have arbitration for disputes with users or the port authority). Alternatively, they proceed as civil suits. One reported case, Board of Trustees of Chennai Port v. P&O Steamer (Madras HC 2015), involved a ship damaging a port’s fender and the port detaining the vessel ultimately sorted under admiralty jurisdiction with mutual claims. While not directly cargo-related, it exemplifies the interplay of liabilities and claims and how courts approach fairness.

D. Recent Trends Judicial Emphasis on Reasonableness and Mitigation: The Supreme Court’s decision in Cochin Port Trust v. Arebee Star Maritime (2020) is illustrative of a trend to ensure ports act reasonably when exercising their statutory powers, which in turn affects liability. The Court held that the port must attempt to mitigate losses by timely auctioning uncleared cargo, and that agents are not liable for endless storage fees once port takes charge. This notion of reasonableness can carry over to damage claims: a port should not be passive if it notices cargo is in peril (say, water leaking into a container yard) it should take action or warn stakeholders. Failure to do so could be seen as negligence. Indian courts likely will import general tort principles like duty to mitigate damage into the bailee context. For instance, if a stack of containers is at risk of toppling and the port ignores it until they fall, a court could find the port liable for the ensuing damage that could have been prevented with prudent action.

E. Empirical Data on Cargo Claims: While detailed statistics are not publicly compiled, anecdotal evidence suggests that a substantial number of cargo claims in Indian ports relate to pilferage (especially in ports like Kolkata historically), water damage during monsoons, contamination or theft of liquid bulk cargo, and physical damage due to mishandling of heavy lifts or improper stacking. Many are small and settled out of court by the port’s claims department. The large or contentious ones are the outliers that reach litigation. Insurers of importers often lodge claims with port trusts some port trusts have administrative schemes to pay claims up to certain rupee values if liability seems clear, to avoid legal costs. The increase in containerization and use of CFS (container freight stations) outside port gates has somewhat shifted where damage occurs; sometimes cargo is found short or damaged at off-dock CFS, raising issues of whether it happened under port custody or after release.

F. Multi-party Litigation Possibilities: The Admiralty Act allows joining multiple respondents, so a cargo owner might arrest the vessel and also name the terminal operator in the suit in personam. For example, cargo damaged due to a combination of ship and shore fault (improper lifting by ship’s gear and improper signaling by shore staff) could lead to both being sued. The High Court in admiralty can adjudicate both liabilities in one go, apportioning fault. Though admiralty jurisdiction over the terminal (a non-maritime-claim defendant) is technically not provided, courts may still adjudicate the connected claim in personam to avoid separate proceedings (this has precedent in other jurisdictions and possibly accepted implicitly in India too when interests of justice demand).

G. Dispute Resolution and Choice of Forum: For pure port-to-cargo owner claims (like a domestic bailment suit), the forum is ordinarily the local civil court or High Court in its ordinary original jurisdiction (not admiralty). However, many major ports (especially under the old Act) had provisions that disputes had to be filed in a court within the port’s territorial jurisdiction (some port trust forms had jurisdiction clauses). Now, if the claim is small, some even approach consumer forums arguing it’s a service deficiency. There have been instances of importers filing consumer cases for delay or damage against port authorities (since the port provides services for consideration). It’s debatable if that fits consumer law, but some have tried due to the simplicity and speed of consumer forums. Arbitration is not common for port-cargo claims unless contractually agreed (which typically it isn’t between port and consignee). But PPP concessionaires may have an arbitration clause in their standard terms for disputes with users. If so, that could compel arbitration of cargo claims at a private port or BOT terminal.

To sum up, liability allocation in cargo claims in India generally follows these patterns: the carrier is liable for what happens at sea and during the immediate loading/unloading; the port/terminal is liable for what happens on land while goods are in its custody; and the two may have to sort out contribution if an incident spans the boundary. Cargo claimants must navigate the procedural channels accordingly arresting ships for carrier liability and suing ports in civil court or invoking any available mechanisms for port liability. The law, as interpreted by courts, seeks to encourage that each party bears responsibility for the segment it controls, and does not escape through technical loopholes (for example, the port cannot hide behind outdated immunities to avoid clear negligence). With these principles in mind, we turn in the next section to review concrete cases and disputes that illustrate these fault lines and how they have been resolved by Indian courts.

VII. Impact of Port Privatization and PPP on Liability and Dispute Resolution

India’s port privatization via Public-Private Partnerships has significantly altered the operational landscape, raising new questions about legal liability and offering new forums for resolving disputes. This section analyzes how the PPP model affects liability regimes, and how disputes involving port operations and infrastructure are being addressed under recent policy initiatives.

A. Changing Liability Dynamics under PPP: In the traditional model, a Port Trust (a statutory authority) was the singular entity responsible for all services and hence all liabilities (subject to immunities) at a major port. Under the PPP model, specific services or terminals are operated by a Concessionaire a private company pursuant to a concession agreement with the port authority. This fragmentation means that when an incident occurs, identifying the liable party requires examining contractual roles:

• If cargo is damaged at a PPP-operated terminal (for example, a private container terminal at Jawaharlal Nehru Port), the private operator is the immediate bailee in possession of the goods. As such, the primary liability for negligence would lie with that operator, not the port authority. The concession agreements typically specify that the concessionaire is responsible for operations, safety, and insurance of cargo within the terminal. In effect, the concessionaire “stands in the shoes” of the port for that facility. A cargo owner can sue the concessionaire (a company) directly for loss or damage. The port authority might not even be a party to the suit unless there is an allegation of some contributing fault or a statutory obligation of the authority.

• The port authority (now governed by the Major Port Authorities Act 2021 for major ports) often has a more limited role as landlord and regulator. It will usually not be liable for operational lapses of the concessionaire unless the claimant can prove that the authority breached a duty (perhaps, say, failure to ensure the concessionaire maintained certain safety standards mandated by the contract, if a creative argument is made). Generally, however, PPP contracts have the concessionaire indemnify the port for any third-party claims arising from operations. Thus if a consignee were to sue both the port authority and the operator, the contract’s indemnity would shift the financial burden to the operator, absent port’s independent negligence.

• A practical example: At Mundra Port (privately run by Adani Ports, not a major port trust), a cargo claim would be solely against the private port company, since it is both port authority and operator there. At a major port like Chennai, suppose a coal-handling terminal run by a BOT operator causes loss of cargo through mishandling. The claim would rightly target that operator. The Chennai Port Authority would likely disavow liability pointing to the concession contract that gives the operator control (and indeed requires them to carry insurance for such liabilities). The claimant might include the port authority as a co-defendant initially (sometimes out of caution or misunderstanding), but it could be dropped if no direct fault is alleged.

• Stevedoring in PPP terminals is usually done by the concessionaire itself or subcontractors. The carrier’s relation in such case is typically with the terminal through a standard Terminal Services Agreement or by virtue of port customs where the vessel pays charges to use the terminal. These terms often include clauses limiting terminal’s liability for cargo (for instance, some terminals cap liability at a certain dollar per package unless value declared, paralleling Hague-Visby limits). There may also be a Himalaya clause extension in the bill of lading for the terminal. Nonetheless, a difference under PPP is that the private operator cannot claim sovereign immunity or shortened limitation as port trusts did. It can rely only on contractual limitation (if applicable against the cargo interest) or general defenses. This arguably increases cargo interests’ chances of recovery because a private operator is treated like any warehousing or logistics company.

• Another aspect is insurance: Port authorities typically had “Port Liability” insurance covering their liabilities. Now concession agreements mandate that concessionaires carry liability insurance (often a minimum coverage for third-party and cargo liabilities). This ensures that if a cargo claim arises, the private operator’s insurer will handle it, rather than a potentially bureaucratic port trust claims process. From the user’s perspective, this can be positive insurance-backed private defendants might be more inclined to settle valid claims promptly than an old port trust worried about setting precedents or bound by governmental accounting rules.

B. Dispute Resolution Mechanisms for PPP Projects: The proliferation of PPP port projects has led to numerous disputes, not so much directly with cargo owners, but between concessionaires and port authorities, or between concessionaires and government (tariff issues, revenue share, etc.). Recognizing this, the government has implemented specialized dispute resolution frameworks:

• A revised Model Concession Agreement (MCA) for Major Ports was introduced in 2021, which includes more flexible terms to reduce disputes (e.g., ability to change cargo mix, freedom to set tariffs as per market). The MCA also built in a tiered dispute resolution clause: first, amicable settlement; failing which, reference to certain committees.

• The Conciliation and Settlement Committee (CSC), set up in October 2021, is one such body. It consists of five independent experts in ports, finance, law, etc., and aims to facilitate settlements of disputes between port authorities and concessionaires. As noted, by August 2023, 43 cases had been referred and 15 settled. These disputes often involve claims like additional costs, revenue share adjustments, or penalty waivers not directly cargo damage but issues affecting the viability of projects (which indirectly impact service quality and liabilities). The CSC’s successful settlements (e.g., the JNPA-DP World settlement of 2025 regarding royalties) indicate that consensual resolution is being prioritized to avoid protracted litigation or arbitration.

• SAROD-Ports (Society for Affordable Redressal of Disputes Ports) is another forum established in 2020, modeled on a similar mechanism in the highways sector. SAROD-Ports provides arbitration by an empaneled list of arbitrators for disputes related to port contracts. According to reports, by 2023 no concessionaire had yet used SAROD-Ports possibly because other avenues like CSC or direct arbitration clauses were being used. But SAROD remains available and can handle technical cases more efficiently than regular courts.

• The Adjudicatory Board under the 2021 Act (which replaces the Tariff Authority for Major Ports) is empowered to adjudicate disputes between ports and PPP concessionaires, and to regulate scales of rates and performance standards. This Board is quasi-judicial; once fully functional, a concessionaire aggrieved by a port’s action (say, imposition of a charge or interpretation of contract) could approach it instead of the High Court. It is likely to be headed by a retired judge and have technical members. The Board’s decisions could cover aspects like whether a particular claim by port or concessionaire is valid under the contract. However, its role vis-à-vis third-party claims (like a cargo owner’s claim) is limited; it mainly addresses inter se disputes of contractual nature.

• For cargo claim disputes themselves (between user and operator or user and port), the general court system remains the venue unless an arbitration clause binds the user. Some private ports have incorporated arbitration in their standard terms (for example, Adani Ports in their terminal services agreement might have an Indian Arbitration Act clause). If a dispute arises, such clauses could be invoked to refer the matter to arbitration. One could foresee, for instance, a foreign cargo owner suing a private terminal in India might be met with an arbitration application if the terminal’s standard contract (often printed on the gate pass or website) had an arbitration clause. The enforceability of such clauses against a cargo interest who may not explicitly sign is complex (issues of incorporation by reference and assent), but it is an evolving area.

C. Regulatory and Policy Initiatives Influencing Liability: The government’s approach in the last few years has been to ensure that the legal regime keeps pace with growth. Some initiatives include:

• Major Ports Authority Act provisions for accountability: The new Act provides for Penalizing concessionaires for not meeting standards and also gives them recourse for changes in law etc. While not directly about liability for damage, a concessionaire that consistently fails safety standards could theoretically have its concession terminated or face penalties, which indirectly incentivizes maintaining good practices to avoid cargo incidents.

• Safety and Security Regulations: With more private operators, the Ministry issues guidelines (under the ISPS code for port security, or for handling hazardous materials). Compliance with these is not just a safety issue but also a liability one non-compliance can be used as evidence of negligence per se in an accident claim. A PPP operator can’t argue it took reasonable care if it violated a known safety regulation. Thus, regulation enforcement is crucial.

• Data and digitalization: The push for digital port platforms (like the PCS Port Community System) and RFID-based gate systems improves tracking of cargo. This reduces disputes like short delivery (since movements are logged). The government’s stress on transparency (publishing dwell times, etc.) indirectly pressures operators to minimize cargo mishandling and delays, otherwise they face commercial consequences.

D. Case Study NSICT vs JNPT (Tariff Dispute Settlement): The settlement in 2025 between JNPA (Jawaharlal Nehru Port Authority) and NSICT (a DP World entity) is a significant development. The dispute had lingered from 2005 over how royalties were treated in tariff calculations, leading the operator to claim huge sums. The conciliation led to an outcome where NSICT would get relief through future volume discounts while committing to increase traffic. Why this matters legally is that it shows the government’s willingness to compromise and keep PPPs viable, which prevents drastic outcomes like termination (which could trigger claims or arbitration in itself). A stable PPP environment means fewer abrupt interruptions in operations that could complicate liability (e.g., if a concession is terminated mid-stream, who handles claims at that time, etc.). It also reinforces that many disputes are commercial/financial rather than tortious; but solving them reduces the tension that might indirectly impact service quality and hence incidence of claims.

E. Private Ports Outside Major Port Regime: Apart from PPP within major ports, entirely private ports (non-major) have grown (Mundra, Ennore/Kamarajar though Ennore is government-owned corp, Krishnapatnam, etc.). These operate under state permissions and their own rules. They negotiate contracts directly with shipping lines and customers. They often include English law or arbitration clauses (some foreign-invested ports might opt for SIAC arbitration for big disputes, for example). This adds another layer: a cargo claim at a private port could be subject to an agreed foreign law or arbitration via the port’s terms or a service contract with a big shipper. Indian law would still apply by default if litigated in India, but the contractual stipulations could complicate things. Overall, privatization means diversity of legal approaches each private player may have its own terms, unlike uniform port trust by-laws.

The government has been considering bringing some oversight like a common adjudicatory board possibly overseeing even private ports on certain issues (earlier drafts indicated it might extend to all PPP in all ports). Also, the Competition Act has been invoked in a few cases regarding terminal practices (e.g., complaints that private terminals abuse monopoly or levy high charges). While that’s outside our main scope, it highlights that private operators are subject to general law constraints and not immune as a government entity might have been.

In conclusion, the PPP model’s impact on liability is that it privatizes the risk and its management: the private entity is squarely responsible for cargo in its care, making it potentially easier for claimants to attribute fault. Simultaneously, the proliferation of special dispute fora like CSC, SAROD, Adjudicatory Board is largely aimed at contractual disputes rather than direct cargo claims, but by maintaining smoother relationships and clarity in PPP operations, they contribute to a more predictable environment in which liabilities can be anticipated and insured. The legal fault lines in the PPP context often revolve around gaps between the concession contract and third-party rights for instance, if a PPP goes bankrupt or abandons operations, who answers to cargo owners for goods stranded or damaged? The port authority may have to step in as a backstop, raising questions of contingent liability. Such scenarios haven’t been fully tested yet in India. The closest might be instances of force majeure (some port concessions faced issues during Covid-19 lockdowns, etc.).

The next section will delve into case law, highlighting how courts have resolved some of the complex issues around port liability and cargo disputes, both in the public port and PPP contexts, thus illuminating how theory is applied in practice.

VIII. Judicial Precedents and Case Analysis

Indian courts, particularly the High Courts and Supreme Court, have on multiple occasions addressed disputes involving port liabilities, cargo losses, and related maritime claims. This section reviews some of the significant judgments, extracting the legal principles they established and how they fill the fault lines in our topic.

A. Premier Automobiles Ltd. v. Port of Bombay (SC 1980): (Discussed in Section V) This case remains the touchstone for port’s bailee liability under statute. The Supreme Court’s holding that the Port Trust was not liable for damage caused by its employees’ negligence (due to statutory immunity) set a precedent that statutory provisions can fundamentally shape liabilities. The Court underscored that a port trust’s liability is not absolute; it is conditioned by both the bailee standard and any legislative immunities. Post-Premier Automobiles, lower courts in India have generally been cautious in imposing liability on port trusts unless negligence is clearly established and no statutory exception applies. For example, Bombay High Court in Board of Trustees of Bombay Port v. Indian Rayon (1986) applied the same reasoning to deny a claim for rain-damaged cargo, finding the port had taken reasonable steps and enjoyed protection of its rules for open storage.

B. Port of Madras v. K.P.V. Sheikh Mohamed Rowther (SC 1967): This older case (often referred to as Rowther-I) tackled who bears charges for uncleared goods but in doing so delineated the bailor-bailee roles as discussed. The constitutional bench decided that the port trust is a bailee vis-à-vis the consignee and that the steamer agent was not liable for port charges after goods are handed over. This was somewhat upended by divergent later decisions, leading to the reference resolved in Cochin Port Trust v. Arebee Star Maritime.

C. Arebee Star Maritime Agencies Pvt. Ltd. v. Cochin Port Trust (SC 2020): This is a very significant ruling from August 2020 on five reference questions mainly concerning liability for demurrage/storage of unclaimed cargo, but it provides clarity relevant to cargo liability generally. The Supreme Court (Nariman, J.) answered inter alia:

• The passing of title to goods (endorsement of B/L) does not determine who is liable for port charges; liability can remain with the steamer agent in certain situations until port takes custody.

• A steamer agent is not automatically absolved from charges once delivery order is issued, but if the consignee fails to clear goods, the port must act reasonably (sell or auction) and cannot keep charging indefinitely.

• Crucially, ports as State entities must mitigate loss implying a duty to minimize damage or loss of value of cargo through timely action. This resonates with bailment principles.

The Arebee judgment, as summarized by Gard P&I Club, confirmed that Ports in India cannot hold shipowners or agents liable for storage/demurrage fees once the Port has taken charge and issued a receipt. This effectively means after cargo is in port custody, the port must rely on consignee (cargo owner) for any charges or else exercise its lien by auction it cannot pursue the ship’s agent beyond reasonable time. The broader implication is that once port takes custody, all responsibilities (and rights) shift to port vis-à-vis cargo. If port fails to fulfill those responsibilities (e.g., letting goods ruin instead of auctioning), it may lose the right to recover charges and arguably strengthen the case of a cargo owner who claims the port was negligent in care. Arebee resolved conflicting SC decisions (like Shah Brothers 1970, Forbes & Co 2015 etc.) and now stands as the law. It aligns Indian law with fairness: the carrier’s agent should not be saddled with indefinite liability for cargo just sitting in port, just as a port shouldn’t be saddled with cargo indefinitely either they must dispose it, which also prevents damage.

D. M.V. Elisabeth v. Harwan Investment (SC 1993): This famous case, while primarily about admiralty jurisdiction (it allowed an action by an Indian cargo owner against a foreign ship for breach of contract, expanding admiralty jurisdiction in India), contains dicta on international conventions. As quoted earlier, it praised Hamburg Rules and noted India’s lag in adopting modern conventions. It’s relevant here to show the judiciary’s awareness of global standards and their willingness to incorporate common law of nations in maritime cases. Following M.V. Elisabeth, the Indian Admiralty law indeed progressed (finally codified in 2017 Act). That case indirectly encourages that port and maritime laws be interpreted in light of international best practices. For instance, though not directly about port liability, one can derive that an Indian court might not allow an anachronistic colonial immunity to defeat a just claim if it finds that modern principles would hold otherwise unless statute squarely commands it.

E. M.V. Kapitan Kud (SC 1996) and Admiralty cases: Kapitan Kud and subsequent admiralty cases, such as M.V. Al Quamar (SC 2000), reinforced that admiralty courts in India can arrest foreign ships for maritime claims including cargo claims. They clarified procedural aspects like the ship’s presence in territorial waters is enough (ship can be in anchorage, doesn’t have to be at berth to be “within jurisdiction”). These cases ensure cargo owners have an effective remedy to secure their claims even if ultimately the issue is between cargo and port sometimes cargo owners will arrest a vessel simply to put pressure and then that vessel owner in turn presses the port or terminal that caused the loss (especially if it’s the terminal’s fault but the cargo chose to sue the ship for convenience). Indian courts have generally been supportive of claimants in allowing arrest to obtain jurisdiction/security, while also safeguarding against frivolous arrests by requiring undertaking for damages in case of wrongful arrest (the Evangelismos test, as noted in ACC resource).

F. Chennai Port Trust v. C. Ramalingam (Madras HC 2017): A High Court ruling where an importer sued the Chennai Port for conversion because the Port Trust had auctioned his goods after the free days expired without giving what he considered proper notice. The Court held the port had followed the procedure under law (MPT Act and its regulations) and was not liable for conversion as it acted within its rights to auction for unpaid charges. This shows that ports can successfully defend if they stick to the statutory script in dealing with uncleared cargo they must give notice as per rules, wait the prescribed period, etc. It also underscores that an aggrieved consignee might claim damages if port deviates (for example, if port auctions too early or the auction is mishandled leading to gross undervalue sale, conceivably the consignee could claim against port for loss of his property’s value).

G. Paradip Port Trust & Anr v. Hargovind Mohandas & Anr (Orissa HC, various years): Orissa High Court in multiple cases dealt with Paradip Port’s liabilities including one instance where salt shipped via Paradip got damaged by rain while in open storage. The Port argued exemption since salt was stored at owner’s risk in open. The Court looked at whether the port had made the conditions clear and if it took precautions (like tarpaulin covers). The decisions emphasize that even if a port has general notices (e.g., “cargo stored in open is at owner’s risk during rains”), the port cannot be grossly negligent. If evidence showed port ignored a forecasted storm and did nothing, they could still be negligent. I include this to highlight how evidence of actual care (or lack thereof) is determinative.

H. Recent High Court Decisions on Private Terminals: Jurisprudence is still developing on PPP terminals. One case, Angre Port Pvt Ltd v. TAG 15 (Bom HC 2022) mentioned earlier, was an admiralty action confirming even a private port can arrest for dues (implying they have similar standing as a “port” for lien and maritime claim purposes). Another case, M.V. Bahia Blanca (Gujarat HC 2018), involved a ship arrest by a terminal operator (Mundra Port) for long-standing charges. The court upheld the arrest, effectively treating the private operator as analogous to a port trust in context of maritime liens. These cases, while about dues, signify that PPP/private ports step into the legal role of port for enforcement, and presumably also for liabilities.

I. Limitation and Forum Cases: A few cases have tested the 6-month limitation of the MPT Act:

• Board of Trustees of Port of Bombay v. Premier Shipping (Bombay HC 1991): The port sought dismissal of a suit by an insurer as time-barred (suit was filed after 8 months). The court indeed dismissed the suit, upholding §120 MPT Act as an absolute bar if time exceeded, regardless of merit. This shows the harsh effect of that provision now hopefully a relic due to repeal.

• Union of India v. AEL (Calcutta HC 2011): Concerned Kolkata Port, it decided on when cause of action accrues for port claims and thus the notice period. It held that for a continuing cause (like continuous storage), time may be counted from end of cause. But anyway, these procedural battles were common. With the 2021 Act, new suits might avoid these traps, but old cases under 1963 Act still trickle in on appeal.

J. Consumer Forum Case (National Commission): There was a case (circa 2009) of an exporter who claimed damages from Mumbai Port Trust for delay causing goods to miss vessel. The National Consumer Disputes Redressal Commission held that the Port Trust was not a “service provider” to the exporter in the manner consumer law envisages, partly because the exporter wasn’t paying the port (the shipping line or agent did) and partly because of the special statute. The complaint was dismissed. This indicates that specialized port claims may not fit consumer remedies, pushing parties to civil courts or arbitration.

In review, the courts have largely upheld the fundamental allocation of risk: carriers are held to their contract and Hague Rules obligations; ports are held to bailee obligations except where statute shields them. The Supreme Court’s recent pronouncements (Arebee) reflect a modernization and fairness approach. The elimination of outdated defenses (like for storage charges) and emphasis on reasonableness suggests that if a similar reference were made about damage liabilities, the Court would likely trend in favor of holding whoever has custody and ability to mitigate as responsible.

The jurisprudence also reveals that while port authorities had some privilege, they were not invincible courts did find against ports in numerous factual scenarios, especially when statutory prerequisites (like timely auction or proper notice of limitation) were not met. With privatization, future case law will probably shift focus to direct operator liabilities, and port authorities might appear less in court except as arbiters or regulators.

Finally, the Admiralty Act 2017 is yet to produce Supreme Court interpretations (it’s recent), but given it codified many principles from case law, it likely won’t shift liabilities per se, just streamline enforcement.

IX. Conclusion

India’s maritime infrastructure surge, propelled by ambitious policies and private investment, has necessitated a careful re-examination of the legal contours of port liability and cargo claims. This comprehensive analysis has traced the statutory framework, international influences, and judicial decisions that together govern the allocation of fault and risk in India’s ports. Several key conclusions emerge:

• Port as Custodian with Qualified Liability: Indian law firmly establishes ports (and by extension, private terminal operators) as bailees of goods in their custody, owing a duty of reasonable care to cargo owners. However, this liability is not absolute. Historically, statutes like the Major Port Trusts Act 1963 provided ports with certain protections notably shortened limitation periods, notice requirements, and immunities for actions in good faith or for losses not attributable to lack of due care. The Major Port Authorities Act 2021 marks a shift towards a more neutral liability regime by omitting some of these protections, thereby aligning port authorities’ exposure more closely with ordinary principles of negligence and contract. As a result, going forward, cargo claimants may find it easier to pursue port authorities in regular courts within normal limitation periods, ensuring greater accountability.

• International Regime Alignment and Gaps: India’s carriage of goods law, via the Carriage of Goods by Sea Act 1925 (as amended), aligns with the Hague-Visby Rules, thereby providing internationally recognized standards for carrier liability (seaworthiness obligation, defences, SDR-based limits). The influence of the Hamburg Rules, while not formally adopted, can be discerned in judicial dicta and the general spirit of recent rulings that favor reasonableness and equity for cargo owners. In effect, Indian courts have signaled that they will not let technicalities create injustice; they are willing to borrow from progressive international norms. Nevertheless, absent legislative adoption of Hamburg or Rotterdam Rules, carriers and ports in India still operate under the older paradigm, meaning certain carrier-friendly defences (like error in navigation) remain available in carriage by sea. The legal fault line here is more theoretical than practical at present while academics and some stakeholders push for adoption of newer conventions to further protect cargo interests, the current regime is functioning and balanced due to the Visby amendments and the courts’ pro-active stance on egregious situations.

• PPP and Private Operations New Landscape, Traditional Principles: The introduction of private players through PPP has not diluted the substantive liability principles; if anything, it has reinforced them by removing sovereign shields. A private terminal cannot invoke state immunity or special statutory limitation; it must answer in tort or contract like any other private entity. This enhances the prospects of recovery for claimants (subject to the private entity’s solvency and insurance). The concession agreements and indemnities ensure that ultimately the cost of a cargo claim caused by terminal’s fault will be borne by the terminal (and its insurer), not the public exchequer. The government’s institution of bodies like the CSC, SAROD-Ports, and the Adjudicatory Board demonstrates an understanding that efficient dispute resolution is crucial in the port sector. These mechanisms, while mostly addressing commercial disputes, create an environment of collaboration and quick problem-solving, indirectly benefiting cargo owners by reducing disruptions and clarifying responsibility when disputes arise. For example, by settling a longstanding tariff dispute, JNPA and its BOT operator avoided a breakdown in relations that could have affected operations and possibly cargo handling quality.

• Judicial Trend Emphasis on Reasonableness, Mitigation, and Fair Burden: Recent judgments (especially the Supreme Court in Arebee) have closed loopholes that ports previously relied on to shift or avoid liability. The principle that once the port has assumed custody, it must act reasonably and cannot perpetually pass costs or risk back to ship or agent is a significant development. This heralds a broader expectation that ports/terminals proactively manage the cargo in their care whether that means safeguarding it from harm or disposing of it when abandonment looms or else face liability. The courts are effectively ensuring that legal fault lines are resolved in favor of commerce and justice: no party should unjustly enrich itself or avoid responsibility at the cost of another. This is consonant with the public law character of ports as well; as entities (or private surrogates) serving the public interest in trade facilitation, they are held to high standards of conduct.

• Maritime Claim Enforcement Robust Admiralty Regime: The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 has fortified the enforcement aspect by codifying the rights of cargo owners and ports to secure claims against ships. This adds an extra layer of security in transactions for instance, a port can detain a vessel for non-payment of dues, and conversely, a cargo owner can arrest a vessel for cargo damage. The interplay of admiralty rights with port operations is smoother now, with clear categories of maritime liens including port charges. This ensures that vessels cannot easily escape liability by sailing away, and ports have a means of collecting what they are owed without lengthy civil litigation. It complements the liability regime by attaching consequences to non-compliance or breach.

• Persistent Challenges and Recommendations: Despite the progress, a few fault lines remain. One is the lack of a uniform approach for minor and private ports since the Indian Ports Act 1908 is skeletal on liabilities, and each state or private port may have different stipulations, users face a patchwork of terms. There is a case to be made for a model guideline or regulation standardizing the duties of care and limitation of liability for all ports in India to avoid confusion. Another area is clarity on misdelivery: given that digital trade documents are emerging, laws may need to explicitly allocate liability in cases of delivery without original title (perhaps by requiring ports to adhere to any digital release system that can be audited). Moreover, as container volumes rise, the issue of demurrage and detention charges (levied by shipping lines when boxes aren’t returned) often intersects with port storage issues; a holistic policy could help ensure cargo owners aren’t unfairly caught between line and port, each claiming charges while cargo languishes.

The legislative and judicial trend in India is toward modernization, transparency, and balance. The overhaul of port governance via the 2021 Act, the establishment of alternative dispute resolution fora, adoption of improved liability standards through Visby rules, and the courts’ corrective interventions all point to a legal regime that is increasingly robust and user-friendly. Indian ports are competing globally, and a fair liability regime is part of ease of doing business cargo owners and carriers must know that if something goes wrong, there are clear remedies and responsibilities.

In conclusion, the legal fault lines in India’s maritime infrastructure push whether between old statutes and new practices, between public authorities and private operators, or between international conventions and domestic law are being actively addressed through legislative reform and judicial wisdom. The statutory law provides the groundwork (rights, duties, and limitations), case law refines their application, and policy frameworks aim to preempt disputes. LawCite Advocates will continue to monitor these developments as India steams ahead with port-led growth. The trajectory suggests that India’s maritime law, much like its ports, is undergoing a constructive expansion closing gaps, strengthening fault lines, and building a liability regime apt for a major trading nation.

Sources:

1. The Major Port Trusts Act, 1963 especially Sections 42, 43, 120 and related provisions on port responsibilities.

2. Major Port Authorities Act, 2021 key changes in port governance and dispute resolution mechanisms.

3. Carriage of Goods by Sea Act, 1925 (India) and Amendment Act 28 of 1993 incorporating Hague-Visby Rules in Indian law.

4. Hague-Visby Rules (as reflected in Indian law) carrier liabilities and immunities.

5. Hamburg Rules (1978) not adopted but acknowledged by Indian Supreme Court as equitable.

6. Trustees of the Port of Bombay v. Premier Automobiles Ltd., (1981) 1 SCC 198 Supreme Court of India (landmark case on port’s bailee liability and immunity).

7. Port of Madras v. K.P.V. Sheik Mohamed Rowther, (1967) 2 SCR 317 Supreme Court (liability for port charges; port as bailee).

8. Cochin Port Trust v. Arebee Star Maritime Agencies (2020) 4 SCC 613 Supreme Court (reference on liabilities for storage/demurrage; reasonableness of port’s actions).

9. Gard P&I Club, Indian Supreme Court: Ports not entitled to levy storage charges against shipowners (2020) commentary on Arebee judgment.

10. M.V. Elisabeth v. Harwan Investment & Trading, (1993) Supp 2 SCC 433 Supreme Court (admiralty jurisdiction; endorsement of Hamburg Rules principles).

11. M.V. Kapitan Kud, (1996) 7 SCC 127 Supreme Court (admiralty jurisdiction, arrest principles).

12. Paradip International Cargo Terminal Pvt. Ltd. v. M.V. Debi 2024 SCC OnLine Ori 1058 Orissa High Court (PPP terminal’s right to arrest ship for dues).

13. Legal500, Navigating Legal Waters: Rights and Remedies for Indian Ports and Terminals (2024) overview of port sector disputes and PPP initiatives.

14. Press Information Bureau, Maritime India Vision 2030 Progress (2024) data on port capacity and traffic growth.

15. India Shipping News, Settlement between JNPA and NSICT finalised (Apr 7, 2025) example of PPP dispute conciliation.

16. Law Commission of India, 151st Report (1994) on Admiralty Jurisdiction notes on India’s stance on Hague/Hamburg conventions.

17. Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 Sections 4, 5, 9 (maritime claims and liens).

18. Angre Port Pvt. Ltd. v. TAG 15, 2022 SCC OnLine Bom 56 Bombay High Court (private port’s right in admiralty).

19. Home Insurance Co. v. Trustees of Port of Madras, AIR 1968 Mad 159 Madras High Court (port liability for pilferage and burden of proof issues).

20. British India Steam Nav. Co. v. Shanmughavilas Cashew, (1990) 3 SCC 481 Supreme Court (Himalaya clause validity under Indian law).

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