Cargo Claims in the UAE: Carrier Liability Caps and Legal Framework

Short answer

• UAE carrier liability changed significantly in 2022-2024 following two complete legislative overhauls.
• Liability caps differ by transport mode: sea freight is capped at 835 SDR per package, international air at 26 SDR per kilogram, and international road at 8.33 SDR per kilogram (if expressly incorporated).
• The UAE has not ratified the Hague-Visby Rules. Bills of lading incorporating those limits will be disregarded by UAE courts.
• Freight forwarders who issue house bills of lading are treated as carriers under UAE law, regardless of whether they own or operate any vehicles or vessels.
• Time bars are strict: 1 year for sea freight claims, 2 years for international air cargo, and a 90-day window for recourse against actual carriers.

Who this applies to

This article applies to freight forwarders, 3PLs, shippers, importers, and in-house counsel managing cargo movements through the UAE, whether by sea, air, or road. It is relevant to both UAE-mainland and free zone entities that are party to carriage contracts as shipper, carrier, or intermediary. It does not address passenger liability or domestic courier services.

The legal framework: two statutes, selective convention adoption

UAE carrier liability rests on two domestic statutes, supplemented by a narrow set of ratified international conventions. The Commercial Transactions Law (Federal Decree-Law No. 50 of 2022, in force 2 January 2023) governs land carriage and domestic air cargo. The New Maritime Law (Federal Decree-Law No. 43 of 2023, in force 29 March 2024) governs sea freight and any multimodal movement that includes a maritime leg. Where the Maritime Law is silent, the CTL applies as a fallback. Where a ratified convention conflicts with domestic legislation, the convention takes precedence.

The UAE's ratification record is selective in ways that frequently catch international operators off guard:

• For international air cargo, the Montreal Convention 1999 applies and is directly enforceable in UAE courts.
• For limitation of liability in maritime claims, the UAE ratified the LLMC 1976 and its 1996 Protocol.
• For international road transport, the UAE acceded to the CMR Convention by Federal Decree No. 98 of 2018, though its enforceability in UAE courts is contested (addressed below).

The critical gap is maritime cargo. The UAE has not ratified the Hague Rules, Hague-Visby Rules, Hamburg Rules, or Rotterdam Rules. UAE courts will disregard Hague-Visby limitation provisions incorporated into bills of lading and apply domestic law instead. In practice, cargo interests often recover more under UAE domestic caps — 835 SDR per package — than under the Hague-Visby figure of 666.67 SDR. Carriers relying on a Hague-Visby bill of lading to cap their exposure against a UAE-domiciled claimant are exposed.

How liability caps apply by transport mode

Financial exposure for cargo loss or damage turns primarily on mode of transport. The caps are not absolute: they fall away where the carrier acted with intent to cause loss, or recklessly with knowledge that loss would probably result, or where the shipper made a valid declaration of value recorded in the transport document before loading.

For sea freight, the New Maritime Law sets the cap at 835 SDR per package or 2.5 SDR per kilogram, whichever produces the greater recovery. For containerised shipments, whether the entire container counts as one package or each item within it counts separately depends on whether the bill of lading enumerates the packages inside. Shippers should ensure their bills of lading specify individual package counts — in a significant loss, the difference is substantial.

For international air cargo, the Montreal Convention cap was revised upward to 26 SDR per kilogram from 28 December 2024 following the ICAO's fourth periodic review. An Abu Dhabi first-instance court has treated a "declared value for customs" notation on an air waybill as a special declaration of interest, awarding significantly above the convention cap. While a single trial court decision, it suggests UAE judges may interpret value declarations broadly. Shippers of high-value goods should ensure the "declared value for carriage" field is properly completed rather than marked NVD.

For international road transport, the CMR cap of 8.33 SDR per kilogram does not apply automatically. The Dubai Court of Cassation has held that CMR limitation provisions must be expressly incorporated into the carriage contract and clearly accepted by all parties. In a reported claim arising from a Dubai-Jeddah road movement, courts at all three levels rejected the carrier's reliance on CMR limits because the contract did not incorporate them — the carrier paid the full claim. Road operators on GCC corridors should not assume CMR protection without explicit written incorporation in the contract itself, not merely in standard terms printed on the reverse of a consignment note.

For domestic road carriage, no statutory per-kilogram cap exists. Courts award actual damages. The Civil Transactions Law (Article 296) voids any contractual clause that limits liability for gross negligence or fraud, so limitation clauses must be carefully scoped.

When a freight forwarder becomes the carrier

The classification of a freight forwarder as agent or principal is the most consequential liability question in UAE logistics law. It is resolved by what the forwarder actually does, not what the contract calls it.

Article 199 of the New Maritime Law draws the distinction explicitly: a forwarder acting as principal carrier assumes carrier-like liability for the entire movement; a forwarder acting as agent of the consignor is liable only for its own negligence in arranging services. The issuance of a house bill of lading is treated by UAE courts as near-determinative of principal status. When a forwarder issues an HBL, it is treated as the carrier regardless of whether it owns or operates a single vessel. Courts also examine whether the forwarder charged a freight markup rather than a commission, and whether it retained operational control over the movement.

The practical split:

• As agent: Exposure is limited to negligent carrier selection, failure to follow shipper instructions, and documentation errors. The forwarder is not liable for loss caused by the actual carrier, provided it exercised due diligence in selection.
• As principal: The forwarder is liable for loss or damage during the entire carriage. Article 278 of the New Maritime Law renders void any clause in a bill of lading that attempts to exempt or reduce carrier liability below the statutory minimum. Disclaimers in house bills are unenforceable in UAE courts.

This distinction shapes how well-advised logistics companies structure their commercial contracts. Forwarders operating as agents decline to issue HBLs, use the carrier's own transport document, and ensure their agreements document agency status and disclose the actual carriers used. Those operating as principals put back-to-back contracts with actual carriers in place, incorporate limitation provisions, and size their professional indemnity cover to actual exposure — not convention caps alone.

Joint liability and the 90-day recourse window

Article 186(2) of the New Maritime Law introduced explicit joint liability between the contractual carrier and the actual carrier. The contractual carrier — typically the forwarder that issued the HBL — is responsible for all damages across the entire carriage. The actual carrier is liable only for the leg it performed. A shipper or consignee can pursue either or both.

The consequence for freight forwarders is that paying a claim does not end the matter. The forwarder that pays can seek contribution from the actual carrier under the master bill of lading, any contractual indemnity arrangement, or the Civil Code's tort provisions. The catch: recourse claims must be filed within 90 days of either the date the main action was filed or the date payment was made, whichever comes first. Claims processes must be activated the moment notice of a cargo claim is received — not after the dispute is resolved.

Back-to-back contracts, where the forwarder's obligations to the shipper are mirrored in its agreement with the actual carrier, remain the standard structural approach. Himalaya clauses extending carrier defences to subcontractors exist under Article 184 of the New Maritime Law but require the claimant to have been on notice of them. Courts may disregard clauses on the reverse of a bill of lading against consignees who were not party to the original negotiation. Express indemnity provisions in the sub-carriage contract are more reliable.

Declared value and contractual protections

The declared value mechanism is the most direct tool available to shippers of high-value cargo. Where the shipper declares the nature and value of goods before shipment and that declaration appears in the transport document, the carrier is liable up to the full declared amount. A reference to value in a commercial invoice or letter of credit does not count — the declaration must be in the bill of lading or air waybill. Carriers charge an ad valorem surcharge for this, which shippers should treat as the cost of full coverage.

Beyond declared value, shippers should ensure their contracts address:

• Whether the forwarder acts as agent or principal, and what that means for liability in the event of a claim.
• Disclosure of actual carriers, particularly where the forwarder operates as agent.
• Whether the forwarder's back-to-back arrangements with actual carriers are adequate for the cargo values being moved.

FIATA standard conditions are widely used by UAE freight forwarders, and the FIATA FBL is accepted under UCP 600 for letter of credit transactions. No UAE statute endorses FIATA conditions, however, and UAE courts treat the FBL as a bill of lading — meaning the forwarder that issues it is treated as the carrier. Any FBL terms seeking to reduce liability below the statutory minimum are void.

Cargo insurance is a complement to liability claims, not a replacement. A cargo owner can claim from both the insurer under the policy and the carrier under the carriage contract. In practice, insurers pay first for speed, then pursue the carrier through subrogation under Article 1030 of the Civil Code. The insurer's subrogated rights are no broader than the assured's — if the carrier can invoke limitation, that limit binds the insurer too. Marine insurance claims under the New Maritime Law are subject to a one-year time bar, reduced from two years under the old code.

Time bars and the claims procedure

Cargo claims under UAE law operate on two tracks — notice of damage and filing of proceedings — and missing either can extinguish the claim regardless of its merits.

Sea freight:

• Visible damage: notice to the carrier at or before delivery
• Non-visible damage: written notice within 3 working days of delivery
• Suit: within 1 year of delivery or the date delivery should have occurred
• Recourse against actual carrier: within 90 days of filing the main claim or making payment

International air cargo (Montreal Convention):

• Damage: written notice within 14 days of receipt
• Delay: written notice within 21 days
• All proceedings: within 2 years of arrival or intended arrival — an absolute extinction of the right of action, not a procedural bar

International road transport:

• Notice to carrier: within 60 days of the incident
• Filing: no specific statutory period; general commercial limitation applies — 10 years for contractual claims under Article 95 of the CTL, and 3 years for tort under Article 298 of the Civil Code

Claims should be filed against the carrier named on the transport document. Where a forwarder issued the HBL, it is the contractual carrier and should be named as defendant. Under Article 186(2) of the New Maritime Law, both contractual and actual carriers may be sued jointly.

Required documentation includes the original transport document (B/L, AWB, or consignment note), joint survey reports from the point of discharge, commercial invoice and packing list, written notice of loss or damage, and a notarised power of attorney. All documents filed with UAE courts must be translated into Arabic by a certified translator.

UAE courts readily accept jurisdiction where any defendant is domiciled in the UAE, where loss occurred there, or where the contract was to be performed there. Foreign jurisdiction clauses on the reverse of bills of lading are regularly disregarded against consignees who were not party to the original contract. Arbitration clauses require explicit written consent under the UAE Arbitration Law (Federal Law No. 6 of 2018).

What this means in practice

Three aspects of the current regime carry disproportionate practical weight.

First, the UAE's non-ratification of the Hague-Visby Rules means that bills of lading incorporating those limits offer no reliable protection in UAE courts. Carriers operating on routes calling at UAE ports cannot rely on Hague-Visby to cap their exposure.

Second, the joint liability provision in the New Maritime Law creates two-party exposure for any forwarder that issues house bills of lading, and the 90-day recourse window means internal claims processes must be triggered immediately upon notice of a loss — not once the dispute is settled.

Third, the CMR enforceability gap means road carriers on GCC corridors face potential full-damages awards unless CMR limits are expressly incorporated and accepted in the carriage contract itself.

Kayrouz & Associates advises shippers, freight forwarders, carriers and insurers on cargo claims and commercial disputes across UAE mainland and free zone jurisdictions. These issues fall within our International Law and Logistics sector practices. For advice on a specific claim or contract review, contact our team.

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