The liability of the maritime carrier for the loss of, damage to, or delay in delivery of cargo is one of the most important issues arising from contracts of carriage by sea, particularly for companies engaged in import, export, and marine insurance activities.
When damage occurs, the value of the cargo alone is not sufficient to determine compensation. The carrier may be subject to statutory limits of liability calculated according to the number of packages or shipping units, weight, or—in the case of delay—freight charges, depending on the legal regime governing the voyage.
In Egypt, a precise distinction must be made between the provisions of Maritime Trade Law No. 8 of 1990 and the United Nations Convention on the Carriage of Goods by Sea 1978, known as the Hamburg Rules. The Convention has been in force for Egypt since 1 November 1992, and where its conditions of application are satisfied, it governs the matters covered by it and the limits under domestic law do not apply in its place.
First: The First Question in Any Dispute – Does Egyptian Law or the Hamburg Rules Apply?
This issue must be determined before calculating any compensation.
The Hamburg Rules apply to a contract for the carriage of goods by sea between two different States where one of the connecting factors specified in Article 2 of the Convention is satisfied, including:
- The port of loading is located in a Contracting State.
- The agreed port of discharge is located in a Contracting State.
- The optional port of discharge actually used is located in a Contracting State.
- The bill of lading or other document evidencing the contract of carriage is issued in a Contracting State.
- The contract of carriage or bill of lading provides that the Hamburg Rules or the law of a State applying them shall govern.
The application of the Convention does not depend on the nationality of the vessel, carrier, shipper, or consignee.
As a general rule, the Convention does not apply to Charter-Parties, except where a bill of lading is issued pursuant to a charterparty and that bill governs the relationship between the carrier and a holder of the bill who is not the charterer.
Second: Egypt’s Position on the Hamburg Rules
Egypt ratified the Hamburg Rules, and the Convention entered into force for Egypt on 1 November 1992.
Since that date, the provisions of the Convention have formed part of the Egyptian legal system within their scope of application.
The Court of Cassation confirmed this principle in an important judgment issued in Appeal No. 18493 of Judicial Year 83 – session of 23 February 2021, holding that the Hamburg Rules apply exclusively to contracts of carriage that satisfy their conditions of application, thereby excluding the application of the Egyptian Maritime Trade Law in matters regulated by the Convention.
Accordingly, it is incorrect to calculate compensation first under Article 233 of the Maritime Trade Law and then compare it with the Hamburg limits and choose the higher amount merely because the voyage is connected with Egypt. The applicable legal regime must first be identified.
Third: Basis of Carrier Liability Under the Egyptian Maritime Trade Law
Article 227 of the Maritime Trade Law provides that the carrier is liable for the loss of or damage to the goods where the damage occurs during the period from the carrier’s receipt of the goods at the port of loading until their delivery to the person entitled to receive them at the port of discharge or their deposit in accordance with the law.
Under Article 229, the carrier may avoid liability if it proves that the loss or damage resulted from a foreign cause beyond its control and that of its representative or employees.
Accordingly, the cargo interest is not required to prove every technical detail of the carrier’s fault. In principle, it is sufficient to establish that the carrier received the goods and that the loss or damage occurred during the period of its responsibility, after which the carrier may prove a cause excluding liability.
Fourth: Basis of Carrier Liability Under the Hamburg Rules
The Hamburg Rules likewise establish a liability regime based on a presumption of fault or negligence.
The carrier is liable for loss resulting from loss of or damage to the goods or delay in delivery if the occurrence causing the loss took place while the goods were in its charge, unless the carrier proves that it, its servants, and agents took all measures that could reasonably be required to avoid the occurrence and its consequences.
There is therefore a degree of similarity between the two regimes, although the legal wording, grounds of exemption, and limits of liability are not identical in every respect.
Fifth: Limits of Compensation Under the Egyptian Maritime Trade Law
Where the Egyptian Maritime Trade Law applies to the matter, Article 233 provides that the carrier’s liability for loss of or damage to the goods shall not exceed:
- EGP 2,000 for each package or shipping unit; or
- EGP 6 for each kilogram of the gross weight of the goods lost or damaged;
and the higher resulting amount applies.
These amounts represent a ceiling on liability and are not compensation automatically due. The injured party does not recover the maximum amount unless the actual damage proved reaches that level.
Article 233 remained unchanged even after the enactment of Law No. 3 of 2025, as that amendment was limited to Article 5 and Item 1 of Article 11 of the Maritime Trade Law and did not extend to the rules governing the liability of the carrier of goods.
Sixth: Calculation Example Under Egyptian Law
If a shipment consisting of 100 packages with a total gross weight of 10,000 kilograms is lost, the calculation is as follows:
- By number of packages: 100 × EGP 2,000 = EGP 200,000.
- By weight: 10,000 × EGP 6 = EGP 60,000.
The maximum liability under Article 233 would therefore be EGP 200,000, unless there is a statutory ground preventing the carrier from relying on the limitation or the carrier has accepted a higher level of liability.
Seventh: Limits of Liability Under the Hamburg Rules
The Hamburg Rules differ fundamentally in the way the monetary value of the limitation is determined, as they use Special Drawing Rights (SDR) rather than a fixed amount in a national currency.
Article 6 limits the carrier’s liability for loss or damage to an amount equivalent to:
- 835 Special Drawing Rights for each package or shipping unit; or
- 2.5 Special Drawing Rights for each kilogram of the gross weight of the goods lost or damaged;
whichever is higher.
It is preferable not to convert these limits in a contract or legal article into a fixed amount in Egyptian pounds because the value of the SDR fluctuates. Under the Convention, conversion into national currency is made at the value applicable on the date of judgment or on another date agreed by the parties.
Eighth: Calculation Example Under the Hamburg Rules
If the shipment consists of 100 packages with a total gross weight of 10,000 kilograms:
- By number of packages: 100 × 835 = 83,500 SDR.
- By weight: 10,000 × 2.5 = 25,000 SDR.
The maximum liability would therefore be 83,500 Special Drawing Rights.
This amount is then converted into the currency in which the judgment is rendered in accordance with Article 26 of the Convention.
Ninth: Containers and the Number of Packages Within Them
The description of the cargo in the bill of lading may create a very significant difference in the maximum amount of liability.
Under Egyptian law, if several packages or units are consolidated in a container and the bill of lading states the number of packages contained within it, each package or unit is treated separately when calculating the limitation.
The Hamburg Rules adopt essentially the same principle: if the bill of lading or other document evidencing the contract of carriage states the number of packages contained in the container, that number is taken into account.
If the packages or units within the container are not stated in a manner that can be relied upon, the container itself may be treated as one shipping unit for limitation purposes.
The description of the shipment in the bill of lading is therefore not a mere formality, but may directly affect the amount of compensation that can be claimed.
Tenth: Liability for Delay Under Egyptian Law
Egyptian law defines delay as failure to deliver the goods within the agreed time, or—where no time has been agreed—within the period in which an ordinary carrier would deliver them in similar circumstances.
Article 240 provides that the carrier is liable for delay unless it proves that the delay resulted from a foreign cause beyond its control.
The important point is that Egyptian law does not establish a separate limit equal to 2.5 times the freight.
Instead, Article 240 provides that compensation for delay may not exceed the maximum limit prescribed by Article 233, namely the package or weight limitation described above.
Eleventh: Liability for Delay Under the Hamburg Rules
The position is different under the Hamburg Rules.
Article 6 limits the carrier’s liability for loss resulting from delay to an amount equivalent to:
Two and a half times the freight payable for the goods delayed, provided that the compensation does not exceed the total freight payable under the contract of carriage by sea.
The Convention also provides that where compensation for delay is combined with compensation for loss of or damage to the goods, the total liability may not exceed the limit that would have applied if the goods giving rise to liability had been totally lost.
Twelfth: When Are Goods Deemed Lost Because of Non-Delivery?
The Egyptian Maritime Trade Law provides that goods are deemed lost if they are not delivered within sixty days following expiry of the delivery period.
The Hamburg Rules likewise contain a specific non-delivery rule allowing the person entitled to the goods to treat them as lost if they have not been delivered within sixty consecutive days after expiry of the prescribed delivery period.
This situation differs from mere delay. Once its conditions are satisfied, the claim moves from compensation for delay alone to a claim treating the goods as lost.
Thirteenth: Loss of the Carrier’s Right to Rely on Limitation Under Egyptian Law
Article 241 of the Maritime Trade Law provides that the carrier may not rely on the limits of liability where it is established that the damage resulted from an act or omission by the carrier, its representative, or one of its employees:
- With intent to cause the damage; or
- Recklessly and with knowledge that damage could probably result.
This threshold is higher than ordinary negligence. It is therefore insufficient merely to characterize conduct as “gross negligence” without identifying facts satisfying the statutory test.
The Law also establishes a special presumption of intent in two cases:
- Issuing a clean bill of lading despite circumstances requiring reservations to be entered, where this is done with the intention of harming a third party acting in good faith.
- Carrying goods on deck in breach of an express agreement requiring carriage below deck.
Fourteenth: Loss of the Right to Limitation Under the Hamburg Rules
Article 8 of the Hamburg Rules establishes a similar standard, although there is an important legal distinction.
The carrier itself loses the right to rely on the limits under Article 6 if it is proved that the loss, damage, or delay resulted from an act or omission of the carrier committed with intent to cause such loss, damage, or delay, or recklessly and with knowledge that such loss, damage, or delay would probably result.
Where proceedings are brought directly against a servant or agent of the carrier, that person personally loses the benefit of the liability limits if the damage resulted from that person’s conduct meeting the same standard.
This differs from the wording of Egyptian Article 241, which expressly includes the acts of the carrier’s representative or employees among the grounds depriving the carrier itself of the right to limitation.
The two provisions should therefore not be described as completely identical despite their clear similarity.
Fifteenth: Carriage of Goods on Deck
Special attention should be given to whether the goods are agreed to be carried below deck or on deck.
Under Egyptian law, where the carrier carries goods on deck in breach of an express agreement requiring carriage below deck, one of the special cases under Article 241 arises.
The Hamburg Rules, by contrast, permit carriage on deck where it is agreed, customary in the relevant trade, or required by statutory rules, and in certain circumstances require the agreement to be stated in the bill of lading.
The Convention treats breach of an express agreement requiring below-deck carriage more severely and may result in application of the provisions concerning loss of the right to limitation under Article 8.
Sixteenth: Declaration of the Value of Goods Under Egyptian Law
Article 234 of the Maritime Trade Law gives the shipper an important mechanism for escaping the limits prescribed by Article 233.
If, before shipment, the shipper provides a declaration concerning:
- The nature of the goods;
- Their value; and
- Any special importance attached to their preservation;
and this declaration is inserted in the bill of lading, the carrier may not rely against the shipper on the limits under Article 233.
The declared value is also presumed correct unless the carrier proves otherwise.
Accordingly, declaration of value may be appropriate for high-value goods whose actual value is disproportionate to the ordinary statutory limits.
Seventeenth: Does Declaration of Value Have the Same Effect Under the Hamburg Rules?
Not under the same wording.
The Hamburg Rules permit the carrier and shipper to agree on higher limits of liability than those prescribed by Article 6, and the bill of lading may include any higher limitation agreed upon.
It is therefore incorrect to transpose Article 234 of Egyptian law directly into the Hamburg regime and state that a unilateral declaration of value by the shipper automatically deprives the carrier of the right to limitation in every case.
Where the Hamburg Rules apply, the bill of lading and terms of the contract of carriage must be examined to determine whether a value or higher limit of liability was agreed.
Eighteenth: Exemption Clauses in the Bill of Lading
Where the Egyptian Maritime Trade Law applies, Article 236 renders void any agreement made before the occurrence of damage if its purpose is to:
- Exempt the carrier from liability for loss of or damage to the goods.
- Alter the statutory burden of proof in favor of the carrier.
- Limit the carrier’s liability below the statutory limits.
- Assign to the carrier rights arising from insurance over the goods or create a similar arrangement.
Conversely, Article 237 permits the carrier to increase its liability or waive certain rights or exemptions, provided this is evidenced in the bill of lading.
Where the Hamburg Rules apply, Article 23 prohibits any contractual term that derogates from the Convention in a manner reducing the protection afforded to the cargo interest.
Nineteenth: Notice of Loss or Damage Under Egyptian Law
The applicable time limits are extremely important.
Under Article 239 of the Maritime Trade Law:
- If the loss or damage is apparent, written notice must be given to the carrier within the two working days following the day of delivery.
- If the damage is not apparent, notice may be given within the fifteen days following delivery.
If notice is not given within the prescribed period, a presumption arises that the goods were delivered in the condition stated in the bill of lading, although this presumption may be rebutted.
Notice is not required where the goods were jointly inspected and their condition at delivery was established in the presence of the carrier or its representative and the person receiving them.
Twentieth: Notice Under the Hamburg Rules
The period for apparent damage differs slightly from domestic law.
Under Article 19 of the Hamburg Rules:
- For apparent loss or damage: written notice must be given no later than the working day following the day on which the goods were delivered.
- For non-apparent damage: within fifteen consecutive days from the day following delivery.
- For loss resulting from delay: written notice must be given to the carrier within sixty consecutive days after the goods were delivered.
The one-day period under the Hamburg Rules should therefore not be confused with the two-working-day period under Egyptian law.
Twenty-First: Notice of Delay
Egyptian law and the Hamburg Rules are broadly aligned in requiring written notice of a claim for compensation arising from delay within sixty days after delivery.
Egyptian Article 240 provides that no compensation is payable for damage resulting from delay if notice is not given within this period.
Accordingly, a cargo interest should not wait until negotiations with the shipping company or insurer have ended before issuing a protective written notice preserving its rights.
Twenty-Second: Limitation Period for Maritime Cargo Claims
Article 244 of the Egyptian Maritime Trade Law provides that claims arising from a contract for the carriage of goods by sea are extinguished after two years from the date of delivery of the goods or from the date on which delivery should have taken place.
Egyptian law specifically regulates causes interrupting this period, including a registered letter with acknowledgment of receipt, delivery of documents relating to the claim, appointment of an expert to assess the damage, in addition to the causes prescribed by the Civil Code.
The Hamburg Rules likewise establish a two-year period for judicial or arbitral proceedings, beginning on the day on which the carrier delivered the goods or part of them, or on the last day on which the goods should have been delivered where no delivery took place.
However, the rules governing interruption or extension of the period are not completely identical under the two regimes. The applicable law must therefore be determined before relying merely on the sending of a claim.
Twenty-Third: Contracting Carrier and Actual Carrier
A bill of lading may be issued by one carrier, which then entrusts all or part of the voyage to another company.
The Maritime Trade Law defines that company as the actual carrier, and the Hamburg Rules regulate the same legal position.
The existence of an actual carrier does not automatically release the carrier that entered into the contract of carriage from liability.
Depending on the applicable regime, both the contracting carrier and the actual carrier may be liable for the part of the carriage performed by the actual carrier, while the total amount recovered remains subject to the applicable statutory limits.
Twenty-Fourth: Court of Cassation Application – Appeal No. 18493 of Judicial Year 83
The Court of Cassation judgment issued on 23 February 2021 in Appeal No. 18493 of Judicial Year 83 is one of the most important recent judgments in this field.
The case concerned a shipment carried from the Port of Calcutta in India to the Port of Alexandria, and the carrier relied on a clause in the bill of lading exempting it from liability for delay.
The Court of Cassation rejected this defense on the basis that the port of discharge was located in Egypt, a Contracting State to the Hamburg Rules, and the voyage was therefore subject to the Convention pursuant to Article 2.
The Court confirmed that the clause exempting the carrier from liability for delay was inconsistent with the Convention and void to the extent of that inconsistency.
Most importantly, the Court established the general principle that where the conditions for application of the Hamburg Rules are satisfied, they exclude the Egyptian Maritime Trade Law in matters regulated by the Convention.
Twenty-Fifth: What Did the Court of Cassation Examine in the Damage and Delay Claim?
In the same judgment, the Court examined several important practical issues in assessing the claim, including:
- The condition and description of the goods at shipment.
- The date of actual delivery.
- The date on which the carrier was notified of the damage or loss.
- Compliance with the notice periods prescribed by the Convention.
- Determination of the actual amount of damage.
- Whether the damaged goods still retained value or could still be used when calculating compensation.
This confirms that liability limits do not mean that the cargo interest automatically receives the maximum amount. The actual damage must first be proved and quantified, after which the liability ceiling applies if it is lower than the damage established.
Twenty-Sixth: Practical Example of Lightweight, High-Value Cargo
Assume a shipment of electronics consists of 50 packages with a total gross weight of 1,000 kilograms and is totally lost.
If the Egyptian Maritime Trade Law Applies
- 50 × EGP 2,000 = EGP 100,000.
- 1,000 × EGP 6 = EGP 6,000.
The higher ceiling would therefore be EGP 100,000.
If the Hamburg Rules Apply
- 50 × 835 SDR = 41,750 SDR.
- 1,000 × 2.5 SDR = 2,500 SDR.
The higher ceiling would therefore be 41,750 SDR, converted into national currency according to the value determined under Article 26.
Twenty-Seventh: Example of Heavy Cargo in a Single Unit
If the shipment consists of one machine weighing 5,000 kilograms:
Under Egyptian Law
- One package × EGP 2,000 = EGP 2,000.
- 5,000 × EGP 6 = EGP 30,000.
The ceiling would therefore be EGP 30,000.
Under the Hamburg Rules
- 835 SDR for the shipping unit.
- 5,000 × 2.5 SDR = 12,500 SDR.
The ceiling would therefore be 12,500 SDR.
Twenty-Eighth: Five Points to Examine Before Calculating Any Claim
- What law applies? There is no point calculating the limits under Article 233 if the Hamburg Rules are the mandatory governing regime.
- Who is the carrier? The bill of lading must be reviewed to identify the contracting carrier and the actual carrier.
- How many packages are stated in the bill of lading? This is particularly important in container shipments.
- Were notices given within the correct time limits?
- Is there a circumstance depriving the carrier of the right to rely on limitation?
Twenty-Ninth: Practical Advice for Cargo Interests
- Review the bill of lading immediately upon issuance and verify the number of packages, weight, and description of the goods.
- Record any special carriage requirements in writing, particularly those concerning below-deck carriage, temperature, or handling methods.
- Inspect the goods immediately upon arrival and do not delay in making reservations.
- Give written notice to the carrier immediately upon discovering shortage, damage, or delay without waiting for the outcome of an insurance claim.
- Engage an independent surveyor where a substantial loss occurs.
- Retain the bill of lading, invoices, certificates of origin, packing lists, survey reports, and correspondence.
- Consider declaring the value of the goods or obtaining appropriate cargo insurance where the actual value substantially exceeds the carrier’s statutory liability limits.
- Do not allow the claim to remain unresolved until the two-year period is close to expiring.
Thirtieth: Practical Advice for Maritime Carriers
- Record reservations concerning the condition of the goods or packaging in the bill of lading where there is a genuine basis for doing so.
- Maintain clear records of custody, handling, and delivery.
- Document the causes of delay and circumstances beyond the carrier’s control as soon as they occur.
- Distinguish in contractual documents between the contracting carrier and the actual carrier.
- Do not use exemption clauses that conflict with mandatory rules under the applicable legal regime.
- Review internationally used Bills of Lading in light of the States in which the ports of loading and discharge are located.
Conclusion
Determining the liability of a maritime carrier does not begin with calculating the number of packages or the weight of the cargo. It begins by identifying the legal regime applicable to the contract of carriage.
If the Hamburg Rules apply, the limits for loss and damage are 835 SDR per package or 2.5 SDR per kilogram, whichever is higher, while delay is subject to a separate limit linked to freight charges. If the Egyptian Maritime Trade Law applies, Article 233 limits liability to EGP 2,000 per package or EGP 6 per kilogram, whichever is higher, and compensation for delay is subject to the same limitation pursuant to Article 240.
The rules also differ in relation to notice, declaration of cargo value, and loss of the carrier’s right to limit liability. Transferring rules from one regime to the other without distinction can therefore lead to fundamental legal errors.
The Office of Dr. Mostafa El Rouby – Attorneys and Legal Consultants reviews bills of lading, transport documents, and survey reports to determine the applicable legal regime, the basis of liability, and the limits of compensation before pursuing or defending maritime transport claims.