Keywords: marine insurance, cargo loss, loss mitigation, subrogation, seaworthiness, insurable interest, case law.

Common Risks in Carriage by Sea

Carriage by sea remains one of the most cost-effective yet risky methods of cargo delivery. The length of sea voyages, dependence on weather conditions, passage through the territorial waters of various states, and the involvement of numerous parties expose cargo to a wide range of risks. The most common are the so-called “perils of the sea,” including storms, heavy seas, seawater damage, and cargo spoilage due to condensation (cargo sweat). Additional risks include fires, vessel collisions, groundings and containers lost overboard.

Another category of risks includes technical failures and unlawful acts such as reefer equipment failures resulting in temperature deviations, theft, piracy and misdelivery of cargo without an original bill of lading being presented. For this reason, marine cargo insurance is not merely a formality but an essential risk management tool.

Stages of Loss Adjustment: A Litigation Lawyer’s Perspective

Marine insurance claims adjustment generally consists of two stages: pre-litigation and litigation. The pre-litigation stage is of paramount importance, as the outcome of the entire case largely depends on the quality of the initial loss documentation. This stage involves notifying the insurer of the insured event, documenting the nature and extent of the damage, compiling a complete set of supporting documents (including the bill of lading, insurance policy, survey reports, commercial damage reports, and photographic evidence), and arranging for an independent cargo survey or expert examination.

At the same time, the legal merits of the claim are assessed, the quantum of loss is determined, requests for information are submitted to third parties (including the carrier, surveyor, and port authorities), and all relevant evidence is preserved. The pre-litigation stage typically concludes with the submission of a formal claim to the liable party or its insurer, followed by negotiations and, where appropriate, mediation. These procedures may result in agreement on the amount of compensation, a payment schedule, and appropriate security. Any agreement reached is formalised in a settlement agreement, compliance with which should be carefully monitored.

If the dispute cannot be resolved out of court, it proceeds to the litigation stage. The first step is to develop a litigation strategy, including determining the appropriate jurisdiction, identifying the parties to the dispute, calculating the amount of the claim, and verifying the applicable limitation period. Where necessary, an application for interim measures may also be filed. The next stage involves collecting and organising evidence, filing the statement of claim, and participating in court proceedings, during which the court examines the evidence and, where necessary, appoints a forensic expert examination. The proceedings conclude with the issuance of a judgment, which may be appealed before a higher court. The final stage is the enforcement of the judgment, including obtaining a writ of execution and commencing enforcement proceedings through the Federal Bailiff Service of the Russian Federation (FSSP) or the debtor’s bank, while monitoring the effectiveness of enforcement measures. Legal costs are generally recoverable from the unsuccessful party. In addition, the parties may conclude a settlement agreement at any stage of the proceedings, often allowing the dispute to be resolved more quickly and at lower cost.

Common Mistakes in Loss Adjustment (To Be Avoided)

In practice, a significant proportion of insurance claim denials and unsuccessful disputes result from mistakes made by the cargo owner during the claims adjustment process. One of the most common mistakes is the late notification of the insurer or the failure to comply with the applicable time limits for bringing claims against the carrier or freight forwarder. Since maritime transport is subject to relatively short limitation periods, even a minor delay may result in the loss of the right to compensation. Another common problem is inadequate documentation and insufficient evidence gathering. The absence of a commercial damage report, survey report, photographic evidence, or a timely expert examination significantly weakens the claimant’s position and makes it more difficult to establish both the occurrence and the extent of the loss.

Particular attention should be paid to mistakes relating to the parties’ conduct in correspondence and the identification of the proper defendant. Written admissions of liability or waivers of claims made during negotiations with counterparties are often used against the claimant in subsequent proceedings. The right to compensation may also be lost where a claim is brought against a party that is not legally liable for the loss. In such cases, valuable time is wasted pursuing the wrong party, while the actual wrongdoer remains outside the scope of the proceedings. Finally, failure to comply with the insurer”s reasonable instructions aimed at mitigating the loss may itself constitute a serious breach. Acting contrary to such instructions is inconsistent with Article 272 of the Merchant Shipping Code (hereinafter, the “MSC”) and Article 962 of the Civil Code of the Russian Federation (hereinafter, the “CC”) and may constitute an independent ground for reducing or denying insurance indemnity to the extent of the resulting loss. These risks can largely be avoided by engaging qualified professionals at an early stage and strictly following the established claims adjustment procedures.

Case 1. Is a Freight Forwarder Always Liable for the Loss of Containers?¹

It is commonly believed that a freight forwarder is liable for the cargo under any circumstances. This perception has become even stronger today: since 2026, the scope of freight forwarders’ duties and liability has expanded significantly. However, the extent of a freight forwarder’s liability depends directly on the nature of the obligations assumed.

An illustrative example is Case No. A65– 40632 / 2025, considered by the Commercial Court of the Republic of Tatarstan. A freight forwarding agreement was concluded between the client and the freight forwarder, under which the client instructed the freight forwarder to book cargo space with a sea carrier. During the voyage from Shanghai to St. Petersburg, a container carrying cargo fell overboard. After paying the insurance indemnity, the insurer filed a subrogated claim against the freight forwarder, alleging that it was liable for the loss of the cargo.

The freight forwarder’s defence was based on the distinction between the functions of a carrier and those of a freight forwarder. The key argument was that the client’s instructions confirmed that the freight forwarder performed informational and organisational functions (booking, informing the client, and settlement services), but did not accept the cargo for carriage. The freight forwarder did not perform the carriage using its own means of transport, was not the shipowner, did not issue transport documents, and did not assume responsibility for the safe delivery of the cargo. Another significant circumstance was that the carrier had been chosen by the client, and the case file contained neither a forwarder’s receipt nor a warehouse receipt confirming that the cargo had been accepted into the freight forwarder’s custody. Relying on Federal Law No. 87‑FZ “On Transport and Freight Forwarding Activities” (Arts. 2 and 7), paragraphs 25‑26 of Resolution No. 26 of the Plenum of the Supreme Court of the Russian Federation dated 26 June 2018, as well as paragraphs 4‑5 of the Rules on Transport and Freight Forwarding Activities (approved by Government Resolution No. 554 dated 8 September 2006), the court concluded that there were no grounds for holding the freight forwarder liable as a carrier.

This case clearly demonstrates that liability for loss of cargo cannot be inferred merely from a party’s participation in the logistics chain as a freight forwarder.

Case 2. Storm at Sea: Who Bears the Loss?²

A storm is frequently regarded as the quintessential example of force majeure, automatically exempting the carrier from liability. However, judicial practice approaches this issue much more subtly. The Commercial Court of Moscow considered Case No. A40–140640 / 2024, the facts of which were as follows. Under a freight forwarding contract, the forwarder organised the sea carriage of cargo from Novorossiysk to Malaysia. During the voyage, the vessel encountered a storm, resulting in the loss of the cargo. The insurer paid insurance indemnity to the beneficiaries and, by way of subrogation, filed claims against the carrier (a Korean company) and its general agent (a Russian company).

The carrier’s position was based on both procedural and substantive legal arguments. Procedurally, the defendant requested that the claim be dismissed without consideration, objecting to the application of Article 248.1 of the Commercial Procedure Code of the Russian Federation (hereinafter, the “CPC”). On the merits, the carrier argued that it had provided a seaworthy vessel fit for the intended voyage, had properly secured the cargo, and that the loss occurred as a result of a storm, that is, due to force majeure and “perils of the sea” (arts. 124 and 166 of the MSC, the Hague Rules 1924, and the Korean Commercial Code).

A key counterargument was advanced in support of the insurer’s claim: the grounds for exempting the carrier from liability under Paragraph 1 of Article 166 of the MSC simply did not apply in this instance. Adverse weather conditions, in and of themselves, do not constitute “perils of the sea” nor do they amount to force majeure. Moreover, the carrier had acknowledged its awareness of the pre-voyage weather forecast and the vessel”s technical readiness, while the weather parameters it cited, measured against the universally accepted Beaufort scale, did not indicate any emergency situation. In other words, the weather conditions were not insurmountable, and the carrier failed to adduce any evidence of force majeure. This legal position was grounded in Article 166 of the MSC, the Annex to EMERCOM Order No. 429 dated 5 July 2021 (Item 2, “Natural Emergencies;” Sub-item 2.3.1, “Dangerous Meteorological Phenomena”), and the Rules for the Safety of Sea Cargo Transportation (Ministry of Transport Order No. VR-1 / p).

As a result, the parties concluded a settlement agreement. The case clearly demonstrates that a carrier’s reliance on a storm is not, in itself, sufficient to exempt it from liability and that such an exemption requires proof that the weather conditions were both extraordinary and insurmountable.

Case 3. Cargo Spoilage Due to Temperature Control Breach³

The transportation of perishable goods in reefer containers imposes heightened obligations on carriers and freight forwarders: even a minor deviation from the required temperature regime may result in the total loss of a shipment. An illustrative example is Case No. A56–100753 / 2022, considered by the Commercial Court of the North-Western District. A freight forwarding agreement was concluded between the cargo owner and the freight forwarder, under which the freight forwarder undertook to arrange multimodal transportation, including the sea leg, of 882 boxes of perishable food products in a reefer container at a temperature of 0.1°C. The cargo arrived spoiled; the cargo owner arranged for an expert examination, disposed of the goods, and filed a claim for approximately 1.9 million roubles, which the freight forwarder refused to satisfy.

The freight forwarder based its defence on several arguments: the expiration of the one-year limitation period, the claimant’s own breach of the loading requirements (which impeded ventilation), the existence of a contractual clause allowing a temperature deviation of up to 3°C, and the failure to prove that the breach occurred specifically during its stage of transportation. The court, however, rejected all these arguments and upheld the judgment awarding damages. First, the limitation period had not expired: the one-year period had been lawfully suspended for the duration of the pre-trial dispute resolution procedure (42 days) in accordance with art. 202 of the CC and art. 13 of the Law on Transport and Freight Forwarding Activities. Second, the court found that the causal link had been established: the temperature logger data (thermogram) conclusively recorded the breach of the temperature regime that caused the spoilage of the cargo. Third, the court interpreted the contractual provision restrictively: the reference to an “allowable deviation of 3°C” was rejected because that provision applied only to short-term power interruptions during maintenance work and not to a systematic breach of the temperature regime. Finally, the court confirmed that the freight forwarder is liable to the client for the acts of the carriers (subcontractors) engaged by it.

The case clearly shows that a thermogram is the key piece of evidence in disputes concerning the spoilage of reefer cargo. At the same time, courts interpret contractual clauses on “allowable temperature deviations” restrictively, applying them exclusively to short-term technical interruptions and not permitting them to justify systematic breaches of the cold chain.

Case 4. Cargo Shifting and Additional Discharge Expenses: Who is Liable for the Losses?⁴

Not all cargo damage during sea transportation is caused by natural forces; it is often the result of the carrier’s improper performance of its obligations regarding the stowage and securing of the cargo. The following case is illustrative. The policyholder arranged the transportation of equipment on the Shanghai–St. Petersburg route. Upon discharge at the port of destination, the packages were found to have shifted and the cargo was found to be damaged, resulting in additional expenses for unloading and repackaging, as well as increased handling charges for the damaged cargo. The carrier attributed the damage to a storm. However, the experts engaged in the case identified a different cause–improper stowage of the cargo units in the vessel’s holds, as well as insufficient separation and securing of the cargo stacks. After recognising the incident as an insured event, the insurer paid insurance indemnity and subsequently, by way of subrogation, filed a claim against the carrier (arts. 15, 393, 965, and 1064 of the CC).

The insurer’s legal position was based on the fact that the losses incurred, both as a result of the damage to the cargo and in the form of additional expenses for handling the damaged cargo, were directly caused by the carrier’s conduct. The key argument was that these losses would not have occurred if the carrier had properly secured the cargo, exercised due care, and duly performed its contractual obligations. Had these obligations been properly performed, the cargo entrusted to the carrier would have been delivered in good condition, and no loss would have occurred. Accordingly, the carrier, as the party responsible for the safe delivery of the cargo, is liable for the losses incurred, and its reliance on the storm, which was disproved by the expert opinion, does not exempt it from liability.

At present, the case is pending before the court. The insurer’s strong evidentiary position, supported by the expert opinion establishing the actual causes of the cargo shift and damage, creates favourable conditions for resolving the dispute by way of a settlement agreement.

Lessons from Practice: A Brief Summary

Adjusting insurance claims arising from maritime carriage is a complex legal task that requires careful consideration of domestic and international law, established case law, and the customs of maritime trade. Modern challenges, including sanctions, digitalisation, and changes in the international legal framework, require market participants to pay greater attention to the contractual regulation of their relationships and the proper preservation of evidence.

Effective protection of the parties’ interests is possible only through a systematic approach combining competent legal support, proactive risk management, and the use of modern technological solutions. At the same time, further development of Russian legislation governing the adjustment of insurance claims arising from carriage by sea, including its adaptation to the realities of sanctions, remains a key priority for both legislators and legal practitioners. ■

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