The plaintiffs, exporters of textile products, filed a suit against the defendant, a freight forwarding and logistics company, to recover INR 24,99,000 with interest, alleging failure to complete a contract of carriage for five containers of cotton yarn shipped from Chennai, India, to Xinging, PRC. The plaintiffs claimed that due to the defendant’s failure to deliver the goods as agreed, they incurred additional expenses in clearing and transporting the consignment. The trial Court dismissed the suit.

In defence, the carrier invoked its statutory protections under the Carriage of Goods by Sea Act 1925 (India) (COGSA), specifically arts 3.6 and 4.2.i of its Schedule. Under art 3.6, any claim against a carrier must be brought within one year after delivery of the goods, beyond which liability is extinguished. Under art 4.2.i, the carrier is not responsible for any loss or damage arising from the act or omission of the shipper, owner, or their agents. The defendant argued that the plaintiffs' forwarding agent had wrongly declared the cargo as 'cotton yarn waste' instead of 'cotton and yarn', causing its detention at Shanghai, where importation of such waste was restricted. The defendant further relied on s 3 of the Bills of Lading Act 1856 (India), emphasising that a bill of lading is conclusive evidence of shipment, but misrepresentation by the shipper absolves the carrier of liability.

The Court found that the plaintiffs' agent admitted the misdescription and that the goods were ultimately delivered to the consignee. The plaintiffs failed to prove actual financial loss with credible documentation.

Held: Appeal dismissed.

The appellate Court upheld the trial Court's decision, emphasising the applicability of COGSA and the Bills of Lading Act 1856 in determining liability. The court held that the transaction involved an international carriage of goods by sea, and therefore, the statutory protections provided to the carrier under these Acts were directly relevant.

Under art 4.2.i of COGSA, the carrier is exempted from liability for losses resulting from the act or omission of the shipper or its agent. The Court found that the plaintiffs' forwarding agent had incorrectly described the cargo as 'cotton yarn waste', a category of goods prohibited for transhipment under PRC regulations. The defendant, as the carrier, was therefore prevented from completing transhipment at Shanghai.

The Court further referred to s 3 of the Bills of Lading Act, which provides that a bill of lading serves as conclusive evidence of shipment unless the misrepresentation was caused by the shipper or its agent. Since the misdescription originated from the plaintiffs' side, the carrier was exonerated from liability.

Additionally, the Court noted that the defendant had ultimately delivered the cargo via Busan, South Korea, thereby fulfilling its contractual obligations. The plaintiffs failed to produce sufficient documentary proof of its alleged loss.