Section 18 of The Multimodal Transportation of Goods Act, 1993
The multimodal transport operator shall not be entitled to the benefit of limitation of liability under any of the provisions of this Chapter if it is proved that the loss, damage or delay in delivery of consignment resulted from an act or omission of the multimodal transport operator with intent to cause such loss, damage or delay or recklessly and with knowledge that such loss, damage or delay would probably result.
Summary
- This section outlines when a multimodal transport operator is stripped of their right to limit how much compensation they have to pay.
- Normally, the operator can cap their financial liability for loss, damage, or delay under the various sections of this chapter.
- The operator loses this right if it is proved that the loss, damage, or delay resulted from their own intentional act or omission.
- This means if the operator intentionally caused the damage, they must pay the full value of the loss without any cap applying.
- The operator also loses the right to limit liability if they acted recklessly.
- For recklessness to apply, the operator must have acted with actual knowledge that such loss, damage, or delay would probably result from their behavior.
Practical examples
FAQ
1. What does it mean for an operator to limit their liability?
Under the Act, operators are normally allowed to cap the maximum amount of compensation they must pay for lost, damaged, or delayed goods (for example, capping it at a certain amount per kilogram or per package).
2. In what situations does an operator lose this legal cap on liability?
An operator loses the cap if it is proved that they caused the loss, damage, or delay intentionally, or if they acted recklessly while knowing that such a bad result would probably occur.
3. Who has the burden of proving that the operator acted intentionally or recklessly?
The claimant (the person suing the operator) must prove in court or arbitration that the operator acted with intent or recklessness.
4. What happens to the compensation amount if the operator loses the right to limit liability?
The operator can be held liable for the full, actual value of the lost or damaged goods without any of the statutory limits or caps applying.
Test yourself
Q1.Under Section 18 of The Multimodal Transportation of Goods Act, 1993, what state of mind must be proven to strip an operator of their right to limit their liability?
Q2.Under Section 18 of The Multimodal Transportation of Goods Act, 1993, if an operator loses the right to limit liability, what is the consequence?
Q3.Under Section 18 of The Multimodal Transportation of Goods Act, 1993, which of the following is required to establish recklessness that results in unlimited liability?
Q4.Under The Multimodal Transportation of Goods Act, 1993, how does Section 18 affect the limits of liability set out in other sections of the same chapter, such as Section 16?
Q5.Under Section 18 of The Multimodal Transportation of Goods Act, 1993, what must a claimant show regarding an operator's 'omission' to break the liability limit?