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

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

Read More »

BREACH OF CONTRACT – FORCE MAJEURE – FORCE MAJEURE UNPACKED: WHEN ‘REASONABLE ENDEAVOURS’ DON’T BEND CONTRACT TERMS

The UK Supreme Court clarified the limits of force majeure clauses, ruling that “reasonable endeavours” do not require a party to accept alternative performance outside the agreed contract terms. This decision emphasizes that force majeure clauses are meant to uphold, not alter, original obligations – even in unexpected circumstances. The case serves as a reminder for businesses to define alternative options explicitly within their contracts if flexibility is desired.

Read More »

NEGLIGENCE – MEDICAL NEGLIGENCE – HOSPITAL ACCOUNTABILITY REINFORCED: COURT UPHOLDS NON-DELEGABLE DUTY IN MEDICAL NEGLIGENCE

In a landmark ruling, the court reinforced the hospital’s non-delegable duty of care, holding that even when services are outsourced to independent contractors, the hospital remains accountable for patient welfare. This decision emphasizes that vulnerable patients, reliant on medical institutions, must be safeguarded against harm caused by third-party providers. The ruling ultimately rejected the hospital’s defense of independence for contracted consultants, underscoring a high standard of duty owed to patients.

Read More »

CONTRACTS – CONTRACT FOR THE SALE OF GOODS FOB – REMOTENESS OF DAMAGES IN BACK-TO-BACK CONTRACTS – COURT DEFINES LIMITS ON LIABILITY

In a complex dispute involving back-to-back contracts, the court clarified the boundaries for assessing damages, emphasizing that a chain of contracts does not automatically ensure liability passes through. Although substantial losses resulted from delays and disruption, the court highlighted the importance of the remoteness of damages, noting that each contract’s unique terms ultimately limited liability. This decision emphasise the need for parties in chain contracts to carefully define indemnity and liability provisions, as damages are assessed based on foreseeability rather than simply the structure of linked agreements.

Read More »

TORT – BREAKING CONFIDENTIALITY – COURT CRACKS DOWN ON INSIDER LEAKS AND CORPORATE CONSPIRACY

In a recent ruling on corporate confidentiality, the court held two former employees liable for disclosing sensitive business information to a competitor, deeming it a breach of both employment contracts and fiduciary duties. This case highlights the serious consequences of unauthorized sharing of proprietary data and reinforces that such disclosures can lead to substantial legal and financial repercussions, even for the receiving parties if they knowingly benefit from confidential information.

Read More »
zh_TWZH
× 联系我们