Shipping 2026

PAKISTAN Law and Practice Contributed by: Faisal Daudpota, Daudpota International

includes a “demise clause” identifying the owner as the carrier. 4.4 Misdeclaration of Cargo In Pakistan, a carrier can establish a claim against a shipper for misdeclaration of cargo, primarily under the Customs Act, 1969 (Sections 32, 156) and the Carriage of Goods Act, 1925. Shippers are liable for inaccuracies in, or non-disclosure of, the nature/value of goods. If the shipper misdeclares, leading to fines or damage, the carrier can claim damages, though the shipper is often penalised by customs authorities. Key Legal Positions and Judgments in Pakistan • Shipper’s liability for misdeclaration: the shipper is generally held liable if the cargo declaration is incorrect, leading to misdeclaration in the Import General Manifest (IGM). • Case example (misdeclaration/confiscation): in a High Court of Sindh case, East Wind Shipping was held liable for misdeclaring the IGM, resulting in a penalty and the cargo (xylene) being confiscated under the Customs Act. • “Shipper loaded” containers: if the bill of lading is marked as “shipper’s load, stow, and count” (SLSC/STC), the carrier is not liable for the con - tents if they are misdeclared or damaged, provided the container was delivered with seals intact (PLD 1992 SC 291). • Carrier’s defence: carriers can defend themselves if they prove they handled the cargo correctly and the damage/discrepancy resulted from the ship - per’s misdescription. Relevant Regulatory Context • SRO 2031 (1)/2022: this outlines procedures for compensation and liability, often capping carrier liability unless high value is declared. • Frustrated cargo (Section 138): if the misdeclara - tion causes issues, the cargo may be classified as “frustrated”, allowing for re-export, but the shipper/ consignee is typically liable for the costs. 4.5 Time Bar for Filing Claims for Damaged or Lost Cargo In Pakistan, the time bar for filing a claim for damaged or lost cargo, whether framed as a breach of contract or liability in tort, is generally governed by COGSA

(incorporating the Hague Rules) or the Limitation Act, 1908. The following is a breakdown of the limitation periods and extension possibilities. Time Bar for Cargo Claims (Limitation Period) • Sea carriage (most common): under Article III, Rule 6 of the Schedule to the Carriage of Goods by Sea Act, 1925, the carrier and the ship are discharged from all liability for loss or damage unless suit is brought within one year after the delivery of the goods or the date when they should have been delivered. • Other carriers (rail/inland): Articles 30 and 31 of the Limitation Act, 1908, also prescribe a limitation period of one year for compensation against a car - rier for non-delivery or damage to goods. • Contract/tort claims generally: if not covered spe - cifically by COGSA, suits for damages for breach of contract or for tort (negligence/misfeasance) are generally subject to a three-year period under the Limitation Act, 1908, starting from when the dam - age occurs or the contract is breached. However, the one-year rule for carriers is usually enforced for cargo damage. Extension or Sustainability of the Time Limit • Extensions by agreement: the one-year time limit can be extended by mutual agreement between the parties (eg, a “standstill agreement” or exten - sion of time limit). It is common practice for claim - ants to request an extension from the shipping line before the deadline expires. • Statutory exceptions: (a) acknowledgment – if the carrier acknowledges the debt/liability in writing before the expiry of the original period, a fresh period of limitation may begin from the time of that acknowledg - ment (Section 18 of the Limitation Act, 1908); and (b) fraud/concealment – if the carrier has commit - ted fraud or concealed the damage, the time limit might be extended, as equitable principles may apply (Section 18, Limitation Act, 1908). • Court discretion: the courts in Pakistan are strictly bound by the Limitation Act, 1908, and have lim - ited power to condone a delay in filing a suit once

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