Association of Multimodal Transport Operators of India (AMTOI)

1. AMTOI celebrated its biennial annual day on 06^th Aug 2025 at Mumbai, India, and which we were fortunate to attend. We wish AMTOI every success in catalyzing multimodalism and which is what their moto is. Our attendance at the AMTOI event gave us an opportunity to meet friends in the industry (both AMTOI members and service providers).
2. We had the opportunity to view an earlier webinar conducted by AMTOI and which does provide useful nuggets to all in the Indian Freight Forwarding/Multimodal Industry. The participants are all well-known industry experts (Arun Kumar, Victoria Simpson, Priya Anil Thomas, Anand Sheth, Ashwin Shankar and Shantanu Bhadkamkar). While this is a 2 hrs+ webinar, we would recommend this for viewing for all doing trade to India. The issues discussed, amongst others, were:
   1. Liability of Freight Forwarder for abandoned cargoⁱ:
      1. The FF would be liable if they are a contractual party with the Overlying Carrier.
      2. The exposure to the FF in India under Indian Law would be based on the actual damages and not what was contractually agreed (due to the application of the Indian Contract Act). This will reduce the exposure vis-à-vis the potential claim for Demurrage/Detention.
      3. Certain commodities (scrap, wastepaper, woolen/textile rags, and large amount of fluctuation in market prices) have a higher tendency of being abandoned and therefore FF should be wary of handling such cargoes.
   2. Lien on shipments: Carriers sometimes hold lien on other shipments to pressurize agents to make payment of the detention accrued as mentioned in 2a above. The question is whether the Carriers are entitled to hold lien or not.
      1. This would depend on the contractual clause provided in the BL’s issued by Carrier and whether this extends to a general lien!
      2. Carriers are generally entitled to a particular lien i.e., they can only hold that specific shipment. However, holding other shipments may be the only leverage available to the Carrier to pressurize downward/contractual parties to make payment of the accrued Detention/Demurrage accrued.
      3. With respect to Carriers pursuing FF (who are only acting as a Booking party) on the basis that they come within the definition of a Merchantⁱⁱ, the consensus was that the FF had a valid defence given that they are not a party to the contract of carriage/BL.
   3. Use of Arbitration as the default dispute resolution process: There was reluctance in incorporating an Arbitration Clause in the MTD wordings used by AMTOI members given that the wordings incorporated in Indian MTD’s are prescribed in the schedule to the MTGA 1993 Act.
   4. Detention/Demurrage Claims: Some of the AMTOI members also act as agents for other companies which are MTO’s/Freight Forwarders (as Principals). If cargoes are not promptly cleared, members face pursuit from the actual carriers for container detention/demurrage on the basis that they are listed as the consignee in the BL issued by the Carrier.
      1. Given that AMTOI members only act as agents, they are not contractual parties to the original contract between the Carrier and the FF’s counterpart (who has engaged the FF).
      2. With respect to position that the BL’s were surrendered by the Indian FF and therefore the liability of the Detention/Demurrage should similarly be borne by them, the position under Indian Law is that this would only arise if the cargo is also transferred to the FF and which never happens.
      3. Under Indian Law, S74 of the Indian Contract Law only allows the Carrier to recover their actual losses even though contractually they may have provided for higher rates. This being the case, Carriers will only be entitled to recover the actual losses arising due to the delay in taking delivery.
   5. Release of cargo without OBL/MTD:
      1. The MTO’s liability for release of cargo without the original documents is for the full value of the cargo.
      2. The questions to be asked is whether
         1. the cargo was released intentionally, say under pressure or based on a Letter of Indemnity, ideally counter signed by a Bank/Bank Guarantee. In this case, the claim if any, is not covered by the MTO’s Liability Insurers.
         2. If unintentional, was it released by the MTO or the MTO’s agents. If it is the MTO’s agents, then the MTO could pursue their agent for any liability arising from the release of cargo without the original documents. If the release was by the MTO themselves, subject to them having cover, say for Errors & Omissions, this may trigger their liability policy. However, the limits under the policy for this cover is generally lower than the main policy and therefore the MTO may still face an exposure.
         3. If the demand for delivery is made after passage of time, then arguably, the Carrier is entitled to recover the storage charges and container detention which would have been incurred in any event.
      3. Criminal Action against FF under S 407 of the Indian Penal Code: Cargo interests are known to initiate criminal action to try and pressurize Carriers to settle their claims. One way to avoid any criminal action is to pre-empt this by filing a civil action and in which case, the Police would generally be reluctant to pursue with the criminal complaint.
   6. Electronic Bills of Lading
      1. EBL’s are like paper BL’s except they are in electronic format.
      2. Liability Insurers will cover losses arising in EBL’s if they would have also arisen in paper documents. However, Liability Insurers do not provide cover for any Cyber Fraud or Cyber Risks and therefore FF’s who use EBL’s systems must seek additional cover for these risks.

3. Our comments:
   1. Arbitration Clause:
      1. We have reviewed the wordings of the MTGA model conditions and note that Clause 25 states “Arbitration: Suitable provisions may be incorporated, by the parties to the Multimodal Transport Contract” which clearly suggests that a MTO may incorporate a suitable arbitration clause in their Multimodal Transport Document (“MTD”). Additionally, S 26 of the Multimodal Transport Goods Act 1993 allows parties to provide for arbitration to deal with any disputes arising from the multimodal transportation.
      2. The advantage of arbitration as the default dispute resolution process, at least in India, would be a speedier dispute resolution process. In addition, if the Rules used for the arbitration are well thought off, they can ensure that the process is not only quick but also economical.
      3. Accordingly, we would suggest that AMTOI consider drafting a suitable arbitration clause for inclusion in the MTD’s of their members. Alternatively, AMTOI should consider taking an opinion from an Indian Lawyer on whether they could incorporate an arbitration given that the wordings provided in the MTGA 1993 schedule makes mention of the potential use of an arbitration clause.
   2. Credit Risks:
      1. We were advised by a FF that some clients have a habit of exceeding the credit provided by alleging that they are going through a lean patch and simply do not pay. They then engage other FF’s for their ongoing shipments and repeat this process with others.
      2. If the FF decides to pursue the client for recovery, they must not only bear additional expenses but must wait for a substantial time (given the pace of Indian Courts and which may sometimes lead to liquidity issues impacting the very life of the FF).
      3. We understand that under Indian Law, there is a time limit of 45 days for payment if the services were provided by a MSMEⁱⁱⁱ. However, some clients deliberately avoid contracting with MSME’s to avoid these provisions.
      4. We would suggest that Industry bodies such as AMTOI have a reporting system by their members so that at the very least, members are aware of the delinquent shipper/cargo interests (without revealing the name of the member or the exact amount) and if they wish to provide services to the same client, they can take an informed decision to avoid a similar fate.
      5. Given that the MSME Act does provide for Arbitration as a Dispute Resolution Process, it is beneficial to Industry bodies such as AMTOI to craft an arbitration clause so that their members can initiate arbitration for recovery of their outstanding dues.
      6. Industry bodies as AMTOI could also consider working with companies providing invoice discounting facilities allowing their members to discount the unpaid invoices, thereby allowing them to focus on their core business instead of recovery of outstanding payments.

4. We again wish AMTOI every success and look forward to the growth of the Indian Trade and AMTOI members who perform various functions such as Freight Forwarders/Multimodal Operators & NVOCC’s.

^i. See our earlier articles, Abandonment of Cargo, Uncollected / Abandoned Cargo, Freight Forwarder – are they the correct punching bag? Also an article published by Shipping & Freight Resource on  Liability of Freight Forwarder on Abandoned Cargo.
^ii. See our earlier article, The Merchant Clause.
^iii. See article by Khaitan Legal Associates on India’s MSME Arbitration : Lifeline or Legal Labyrinth