Yew Huoi, How & Associates | Leading Malaysia Law Firm

Cargo Damage

ADMIRALTY IN REM – CARGO DAMAGE

My company shipped steel bars from Port Klang to Kota Kinabalu. The steel bars were discovered damage upon discharge in Kota Kinabalu. Who can we claim against? Can we arrest the shipowner’s vessel?

Yes. The Admiralty jurisdiction of the High Court includes “(g) any claim for loss of or damage to goods carried in a ship” and “(h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship. In another words, you may invoke the “Admiralty” or “In Rem” jurisdiction of the High Court for cargo damage.

However, it must be mindful that a claim under Section 20(2)(g) and (h) of the UK Seniors Courts Act 1981 (“SCA 1981“) must satisfy two (2) requirements in s. 21 of the SCA 1981 as follows:

a.)The claim arises in connection with a ship; and
b.)The person who is liable is either owner, charterer or in possession or in control of the ship.

In another words, if the person who would be personally liable to the plaintiff’s cargo damage is someone other than “the owner, charterer or in possession or in control of the ship“, Admiralty in Rem action cannot be maintained on that ship.

It is also important to note that a claim under sub-section (g) and (h) above may be brought against either the offending ship or the sister ship(s).

 Once the aforesaid criteria are met, a writ in rem may be taken out against the ship. Before a writ in rem is issued, cargo owners might also want to take note of the following matters and perform the following steps.

  • STEP 1 : Get hold and go through the contract of carriage. This can be in the form of a bill of lading or a charterparty (fixture notes).

  • STEP 2 : Obtain a chemical or expert report identifying the cause of damage. The damage could be as a result of seawater damage, physical damage due to loading and unloading of cargo, inherent manufacturer’s defects etc.

  • STEP 3 : Identify who would be personally liable to the damage. We do note the difficulty in ascertaining who would be liable to the damage at times. However, chemical or expert report would be able to shed some light in finding this answer. If the chemical report shows the presence of chloride, then it is likely the damage is caused by seawater contamination. An action can then be commenced against the shipowner for negligence, bailment or unseaworthiness of vessel. Cargo owner may rely on the doctrine of res ipsa loquitor to imply negligence on shipowner.

  • STEP 4 : Consult your lawyers and track down the offending ship or sister ships. Lawyers might need some time to prepare the arrest papers, obtain an arrest order and making arrangement to serve the Writ on the vessel. Coordination too has to be made with the respective departments such as the marine department etc to ensure arrest is properly effected.

If you need more information on our legal updates, our Knowledge and Law News Division by clicking here , we would be  pleased to assist.

Recent Post

REGULATIONS – GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT 1947 ) – ARTICLE I

This legal update explores key provisions of the General Agreement on Tariffs and Trade (GATT 1947), focusing on Article I (Most-Favoured-Nation Treatment), Article II (Schedules of Concessions), Article XX (General Exceptions), and Article XXI (Security Exceptions). Article I mandates that any trade advantage granted by one contracting party to another must be extended unconditionally to all other parties. Article II ensures that imported goods from contracting parties receive treatment no less favourable than that outlined in agreed schedules, while also regulating permissible taxes and charges. Articles XX and XXI provide exceptions for measures necessary to protect public morals, health, security interests, and compliance with domestic laws. The provisions reflect the foundational principles of non-discrimination, transparency, and fair trade, while allowing for limited, well-defined exceptions. This summary is intended to provide a concise reference for businesses and legal practitioners involved in international trade law.

Read More »

ROAD ACCIDENT – INSURANCE COMPANY STRIKES BACK: HIGH COURT OVERTURNS ROAD ACCIDENT CLAIM

When a motorcyclist claimed he was knocked down in an accident, the Sessions Court ruled in his favor, holding the other rider fully liable. But the insurance company wasn’t convinced. They appealed, arguing that there was no proof of a collision and even raised suspicions of fraud. The High Court took a closer look – and in a dramatic turn, overturned the decision, dismissed the claim, and awarded RM60,000 in costs to the insurer. This case is a stark reminder that in court, assumptions don’t win cases – evidence does.

Read More »

CHARTERPARTY – LIEN ON SUB-FREIGHTS: CLARIFYING OWNERS’ RIGHTS AGAINST SUB-CHARTERERS

In Marchand Navigation Co v Olam Global Agri Pte Ltd and Anor [2025] 1 Lloyd’s Rep 92, the Singapore High Court upheld the owners’ right to enforce a lien on sub-freights under Clause 18 of the NYPE 1946 charterparty, ruling that the phrase ‘any amounts due under this charter’ was broad enough to cover unpaid bunker costs. Despite an arbitration clause between the owners and charterers, the sub-charterer was obligated to honor the lien, as it was not a party to the arbitration agreement. This decision reinforces that a properly exercised lien on sub-freights can be an effective tool for owners to recover unpaid sums, even in the presence of disputes between charterers and sub-charterers.

Read More »

SHIP SALE – LOSING THE DEAL, LOSING THE DAMAGES? THE LILA LISBON CASE AND THE LIMITS OF MARKET LOSS RECOVERY

In “The Lila Lisbon” [2025] 1 Lloyd’s Rep 101, the court ruled that a buyer cancelling under Clause 14 of the Norwegian Salesform Memorandum of Agreement is not automatically entitled to loss of bargain damages unless the seller is in repudiatory breach. The case clarifies that failing to deliver by the cancellation date does not constitute non-delivery under the English Sale of Goods Act 1979, as the clause grants the buyer a discretionary right rather than imposing a firm obligation on the seller. This decision highlights the importance of precise contract drafting, particularly in ship sale agreements, where buyers must ensure that compensation for market loss is explicitly provided for.

Read More »

CRIMINAL – KIDNAPPING – NO ESCAPE FROM JUSTICE: COURT UPHOLDS LIFE SENTENCE IN HIGH-PROFILE KIDNAPPING CASE

A 10-year-old child was abducted outside a tuition center, held captive, and released only after a RM1.75 million ransom was paid. The appellants were arrested following investigations, with their statements leading to the recovery of a portion of the ransom money. Despite denying involvement, they were convicted under the Kidnapping Act 1961 and sentenced to life imprisonment and ten strokes of the whip. Their appeal challenged the identification process, the validity of the charge, and the admissibility of evidence, but the court found the prosecution’s case to be strong, ruling that the appellants had acted in furtherance of a common intention and were equally liable for the crime.

Read More »
en_USEN
× Contact Us