Limitations of marine liability under Kuwait law

Ahmed Rezeik
Senior Counsel and Head of Shipping, Al Tamini & Co, Kuwait
A.Rezeik@tamimi.com

Limitation of liability is a core component of maritime law, balancing the interests of carriers, shipowners, and cargo interests with the commercial realities of maritime navigation. Under Law No 28 of 1980 (Maritime Trade Law), Kuwait has codified liability rules for shipowners' limitation of liability and maritime carrier limitation of liability that reflect both domestic needs and long‑standing maritime legal principles. This article provides an update on how liability is limited under Articles 91, 94, and 193 of the law, and discusses relevant legal developments and judicial approaches in Kuwait’s maritime jurisprudence.

Shipowners’ limitation of liability

Article 90 of the Kuwaiti Maritime Trade Law establishes the shipowner’s civil liability for the actions of the captain, crew, and pilot performed within the scope of their employment, such as liability for collision and liability for personal injury and property damage in collisions. The owner is also bound by contracts signed by the captain under their legal mandate. Although the shipowner is responsible for vessel-related damages, the law acknowledges the financial risks involved; specifically, Articles 91 and 94 define the boundaries of this liability to prevent debts from disproportionately exceeding the ship’s actual value.

Article 91 allows shipowners to cap their liability (per Article 94) for damages involving:

• Passengers and cargo: personal injury or property damage for those being transported on the vessel.
• Third-party claims: injury or damage to persons or property on land or sea, provided the incident occurred during core maritime operations (navigation, cargo handling, or passenger service).

Critically, this law allows a shipowner to limit their financial exposure even in cases of strict liability (where fault is not proven). Importantly, choosing to limit liability cannot be used against the owner as an admission of guilt in legal proceedings.

Under this provision, liability is allocated according to the degree of fault of each vessel, and where the fault cannot be precisely measured, liability is presumed equal.

This fault‑based approach serves as a built‑in limitation mechanism: compensation is capped by each vessel’s share of responsibility rather than exposing one party to full liability without regard to comparative fault.

Importantly, although Article 91 does not prescribe financial caps, its principle of proportional fault allocation limits the burden on an individual shipowner where shared fault is demonstrated. This mechanism aligns with traditional maritime collision jurisprudence, which treats fault apportionment as part of liability limitation. This is where Article 94 comes in, which specifies how to calculate the amount of liability for the shipowner.

Article 94 defines the specific financial caps for a shipowner’s liability, calculated as a fixed rate per ton of the vessel's tonnage. The total exposure is categorised by the nature of the damages:

• material damage only: liability is capped at 25 KWD 25 per ton;
• bodily injury only: liability is capped at KWD 50 per ton;
• mixed claims (material and bodily): a combined cap of KWD 75 per ton applies.

The Priority Rule: In mixed cases, KWD 50 is reserved exclusively for bodily injury and KWD 25 for material damage. If the injury fund is exhausted, any remaining unpaid injury claims are merged with the material damage claims to be settled from the remaining pool.

Funds within each category are distributed pro rata among all undisputed creditors, and if a shipowner settles a debt listed under Article 91 prior to the fund's distribution, they are legally permitted to ‘step into the shoes’ of that creditor, reclaiming that amount from the distribution pool.

Although the number of published judicial rulings in Kuwait regarding collision incidents is small, we have not seen any ruling that applied the text of Articles 91 and 94 of the law. In general, despite the existence of articles in maritime law that allow the shipowner to determine his liability for maritime accidents, we have not seen any ruling that applied those limits so far. Even if the shipowner requests that his liability be determined, the courts do not apply it, and it is difficult for them or for experts to calculate the determination of liability.

Accordingly, we rule out the possibility that any court in Kuwait has applied those limits in relation to a maritime accident.

Marine carrier limitation of liability

Regarding the determination of the maritime carrier's liability for goods damage, the matter differs according to Article 193 of the Maritime Law, where the article establishes both the method for assessing compensation and the statutory limits applicable to such liability.

Where the carrier is found liable for the total loss or total damage of goods, compensation is calculated on the basis of the customary value of goods of the same type and quality at the place and time at which delivery should have occurred. This objective standard ensures that compensation reflects the market value of the goods at destination.

In cases of partial damage or delay in delivery, compensation corresponds to the diminution in value of the goods, calculated according to the same valuation method. However, in all circumstances, such compensation may not exceed the amount that would have been payable in the event of total loss. This provision prevents disproportionate recovery exceeding the maximum compensation applicable to complete loss.

Article 193 further introduces a clear monetary cap on the carrier’s liability. In all cases, the carrier shall not be liable for loss, damage, or delay in delivery of goods in an amount exceeding: KWD 250 per package or unit; or 750 Kuwaiti fils per kilogram of the gross weight of the goods (whichever calculation results in the higher amount).

This dual calculation mechanism protects both bulk cargo interests (through the weight-based formula) and packaged goods (through the per-unit formula), while simultaneously ensuring predictability and financial certainty for carriers.

It should be borne in mind that the statutory limitation does not apply where the shipper has, prior to shipment, declared the nature and value of the goods, and such declaration has been recorded in the bill of lading by the carrier. In such cases, the declared value constitutes prima facie evidence of the goods’ value, although the carrier retains the right to rebut or challenge the accuracy of that declaration.

This mechanism allows parties to contractually allocate risk for high-value cargo and ensures transparency in commercial dealings.

With respect to goods shipped in containers, boxes, or similar packaging, Article 193 provides specific guidance:

• If the bill of lading specifies the number of packages or units contained within the container, each specified package or unit is treated separately for the purpose of calculating the liability limit.
• If no such specification is made, the container and its contents are deemed a single package or unit for limitation purposes.

This rule underscores the importance of accurate documentation in the bill of lading and prevents ambiguity in determining liability limits.

Having said that, the carrier and shipper may, by special agreement, stipulate a higher maximum liability limit than that provided under Article 193. However, such an agreed limit may not be lower than the statutory minimum established by the article. This ensures that the protective purpose of the statutory framework is preserved while allowing commercial flexibility.

Finally, Article 193 provides that the carrier shall not be liable for loss or damage where the shipper has intentionally provided false information in the bill of lading concerning the nature or value of the goods. This provision safeguards carriers against fraudulent or misleading declarations and reinforces the principle of good faith in maritime transactions.

In practice, the Court of Cassation has consistently affirmed the proper and strict application of Article 193 of the Maritime Trade Law. In particular, as regards paragraph (2) of Article 193, the following Court Precedent stated that:

‘In all cases, the carrier shall not be liable for loss or damage to goods or delay in their delivery for an amount exceeding two hundred and fifty Kuwaiti Dinars per package or unit, or seven hundred and fifty Kuwaiti Fils per kilogram of the gross weight of the goods, whichever is greater, unless the shipper has, prior to shipment, declared the nature and value of the goods and the carrier has recorded such declaration in the bill of lading. Such a declaration shall constitute evidence of the value assigned by the shipper to the goods, and the carrier may prove otherwise’.

This provision is drafted in clear, general, and mandatory terms. As confirmed by the explanatory memorandum to the Maritime Trade Law, the legislator intended to impose a definitive limitation on the carrier’s liability for loss, damage, or delay in delivery in all cases – whether the goods are transported in packages, units, containers, or otherwise – unless the bill of lading expressly includes a prior declaration of the nature and value of the goods. It is a well-established principle of statutory interpretation that where the wording of a legal text is explicit, clear, and unambiguous, it must be applied as written, without deviation or recourse to speculative interpretation based on perceived legislative intent beyond the text itself. In the case at hand, although the bill of lading clearly specified the type and weight of the shipped goods, it did not include any declaration of their value. Accordingly, compensation must be assessed strictly in accordance with the statutory limitation set forth in Article 193(2).

The appealed judgment departed from this binding principle by calculating compensation based on the customary market value of the goods at their destination, despite the absence of a declared value in the bill of lading. In doing so, the court misapplied the law and contravened the explicit provisions of Article 193(2), thereby committing an error warranting partial reversal of the judgment in this respect. This position was expressly upheld by the Court of Cassation in Appeal No 943 of 2006 (Commercial Circuit, judgment dated 7 October 2007), which reaffirmed the mandatory nature of the statutory liability cap and the necessity of a declared value in the bill of lading to depart from it.

Although numerous published judgments address the determination of the maritime carrier’s liability, most of them date back several years and can now be regarded as relatively outdated. For a considerable period – approximately 15 years – the courts issued very few, if any, decisions dealing specifically with the assessment of the maritime carrier’s liability, similar to the noticeable decline in rulings concerning shipowner liability.

In recent years, however, the courts have begun once again to render decisions addressing the determination of the maritime carrier’s liability for cargo loss and damage. This renewed judicial engagement is a welcome development, as it contributes to clarifying the application of the Maritime Trade Law and reinforces legal certainty in maritime commerce.

Conclusion

Kuwait’s maritime liability regime, as set out in Articles 91, 94, and 193 of the Maritime Trade Law, establishes a structured and integrated framework governing the limitation of liability in cases of maritime collisions and cargo damage. These provisions collectively reflect a legislative intent to balance the interests of shipowners, carriers, and cargo interests by imposing defined financial ceilings while preserving the right to compensation within those limits.

In practice, however, the application of this framework has not always been entirely consistent. The effectiveness of the limitation provisions often depends on the approach adopted by the court seised of the dispute and its adherence to the mandatory nature of the statutory caps. In some instances, courts have applied the limitation strictly in accordance with the clear wording of the law; in others, the reasoning has not fully aligned with the legislative structure governing limitation of liability.

As Kuwait continues to advance and modernise its maritime sector, there is a valuable opportunity to further strengthen the legal framework – whether through legislative refinement, clearer procedural mechanisms for invoking limitation, or greater harmonisation with widely adopted international conventions. Such developments would enhance legal certainty, promote uniformity in judicial application, and reinforce Kuwait’s position as a reliable jurisdiction for international shipping and maritime transport operations.