Goods lost or damaged in transit — who pays? This is the most disputed question in transport and logistics contracts in Vietnam. Many cargo owners are shocked to learn that, even for goods worth billions of dong, the logistics provider’s liability is capped at VND 500 million if the cargo value was never declared in advance.
This article analyses liability for lost or damaged goods under the Commercial Law 2005 (Articles 233–240 on logistics services) and Decree 163/2017/ND-CP — the liability principle, exemptions, liability caps, and the deadline traps cargo owners fall into.
1. General principle: whoever causes the loss pays
Under the Commercial Law 2005, a logistics service provider must safeguard goods while performing the service. Where goods are lost or damaged, the provider must compensate the customer — except in exempted cases (section 2) and within the liability cap (section 3).
2. Six exemption cases (Article 237)
Article 237 of the Commercial Law 2005 exempts logistics providers from goods-loss liability where:
- Customer’s fault: loss caused by the customer or its authorised person (e.g. improper packing done by the cargo owner itself);
- Following instructions: loss arising from correctly following the customer’s instructions;
- Inherent defect: goods deteriorating by their own nature (e.g. produce shipped without the required refrigeration the owner never disclosed);
- Transport law/practice exemptions: where the provider organises transport, statutory and customary transport exemptions apply;
- No complaint within 14 days: no complaint notice received within 14 days of delivery to the consignee;
- No suit notice within 9 months: after a complaint, no notice of arbitration/court proceedings within 9 months of delivery.
Providers are further not liable for: the customer’s lost anticipated profits; or delays/wrong-place performance not caused by their fault.
3. Liability cap: the VND 500 million figure (Decree 163/2017)
Article 238 of the Commercial Law 2005: absent other agreement, a logistics provider’s total liability must not exceed the liability limit for total loss of the goods. Decree 163/2017/ND-CP (Article 5) specifies:
- Sectoral law (maritime, aviation, road…) sets its own cap → sectoral law prevails;
- No sectoral cap → as agreed by the parties;
- No agreement: customer did not declare cargo value in advance → maximum VND 500 million per claim; customer declared and the provider confirmed → capped at the declared cargo value.
The practical lesson: always declare cargo value in writing and obtain the provider’s confirmation before handover. Otherwise, even a VND 5 billion consignment caps at VND 500 million — unless the contract agrees higher.
4. When does the provider LOSE the liability cap?
Article 238 strips the cap where the claimant proves the loss, damage or delay resulted from the provider intentionally acting or omitting to act to cause it, or acting recklessly with knowledge that it would probably result. In short, the cap shields negligence — not wilful or reckless conduct.
5. Right to retain goods for unpaid freight (Articles 239–240)
Conversely, the provider may retain a quantity of goods (and related documents) to secure due debts — subject to immediate written notice to the customer. After 45 days from notice without payment, the provider may dispose of the goods as prescribed by law (perishable goods may be disposed of immediately).
While retaining, the provider must: preserve the goods; not use them without consent; return them when retention ends; and compensate for loss of or damage to retained goods.
6. Frequently asked questions
Q: Goods lost in the provider’s warehouse — who proves what?
A: The provider must prove an Article 237 exemption; failing that, it compensates within the liability cap.
Q: Damage discovered more than 14 days after delivery — still claimable?
A: Very difficult — no complaint within 14 days of delivery is an exemption ground under Article 237. Inspect and count goods immediately on receipt.
Q: Should we buy separate cargo insurance?
A: Yes. The provider’s cap (VND 500 million or declared value) is usually below actual consignment value; standalone cargo insurance is the second layer of protection.
Negotiating a logistics or transport contract and need a review of liability and cap clauses? Contact us for advice.
Prepared by the FLAW AI Legal Council. This content is pending QA Council review before submission for approval; it is for reference only and does not replace legal advice for your specific case.
