Carriage of Goods by Sea
Carriage of Goods

Goods shipped from any port in Malaysia to any other port whether in or outside Malaysia under bill of lading contracts are mandatorily subject to the regime of Hague Rules (the International Convention for the Unification of Certain Rules relating to Bills of Lading, Brussels, 1924) as enacted in Malaysia.  The Hague Rules sets out minimum standards for risks to be borne by the carrier and specifies the maximum protection that a carrier can claim from exclusion and limitation of liability clauses.

The Hague Rules are given force in Malaysia under the following legislation:

• Carriage of Goods by Sea Ordinance 1950 (applicable in the states of West Malaysia);

• Merchant Shipping (Implementation of Conventions relating to Carriage of Goods by Sea and to Liability of Shipowners and Others Regulations, 1960 (applicable in Sarawak);

• Merchant Shipping (Applied Subsidiary) Regulations 1961 (applicable in Sabah)

The Hague Rules may also apply to any other document of title - example Mate’s Receipts - provided the following attributes exist: (a) must be issued by a carrier to a shipper; (b) must contain the name of shipper, consignee and a description of the goods to which the contract of carriage relates; (c) contain an acknowledgement by the carrier of the receipt of the goods.  The Rules are restricted to the ‘tackle to tackle’ period, from the time when the goods are loaded on to the time they are discharged from the ship whilst carrier and cargo interests are free to contract on terms outside this period where the liabilities are determined in accordance with the general principles of contract, tort, bailor/bailee relationship.  This position similarly obtains for charter parties or other contracts of affreightment where the Rules do not apply.

There is a significant difference in the application of the carrier’s limitation of liability provisions under the Rules between the states of West Malaysia and the East Malaysian states of Sabah and Sarawak. In West Malaysia the limitation amount is £100 per package or unit in gold value (as at 1924) which represent about 732.238 of fine gold at current prices, which in practical terms works out to RM80,000 or more, hardly representative of a limitation sum. In Sabah and Sarawak, however, £100 per package or unit has been converted by legislation to a fixed amount of RM850 which represents a realistic limitation sum.   

There is no international regime governing carriage of goods by road or rail in Malaysia.
Road haulage is regulated through national licensing laws, the principal legislation being the Commercial Vehicles Licensing Board Act 1987 which does not address cargo liability issues between the road haulier and the cargo owner.  These issues are left to agreement between the contracting parties and, in practice, dependent upon a haulier’s or its association standard terms and conditions.

Rail haulage is regulated by the Railways Act 1991 which provides for licenses, laws, duties and responsibilities and charges for the rail industry including a lien for the haulier’s freight and charges and, like road haulage, is not governed by any international convention.  The principal rail haulier, Malayan Railways, is not a common carrier and contracts on its own standard terms and conditions thus one has to look to the contract provisions to deal with cargo liability issues.

Malaysia gives effect to the Convention for the unification of certain rules relating to international carriage by air (‘The Warsaw Convention” as amended at the Hague, 1955) and the Convention supplementary to the Warsaw Convention (‘The Guadalajara Convention, 1961’). 

The provisions of these Conventions are given force through the Carriage of Goods by Air Act 1974 and orders made under it.

Limits of Liability under the Carriage of Goods by Air Act 1975
In the carriage of passengers, the liability of the carrier is limited to 250,000 francs equivalent to Malaysian Ringgit RM 48,000.  Liability for passenger accompanied baggage is limited to 5,000 francs per passenger equivalent to Malaysian Ringgit RM960.  For the carriage of registered baggage and cargo, unless a special declaration of interest has been made and additional fees paid, the liability of the carrier is limited to 250 francs per kilogram equivalent to Malaysian Ringgit RM 40 per kilogram.

The Firm regularly acts for carriers, cargo interests, multi modal operators, insurers in respect of loss and damage to cargo carried by sea, air, road or rail.

Contact person:
Tel +603 5891 1111
Fax +603 5633 1103

The information herein is for general guidance only, may have been superseded, circumstances may have changed and should not be relied upon for action. This does not in any way represent or replace professional legal advice which in each and every case must be obtained.
Sativale Mathew Arun
Malaysia's Maritime Lawyers
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