On 7 July 2026, the Ministry of Ports, Shipping and Waterways notified the Merchant Shipping (Limitation of Liability for Maritime Claims) Rules, 2026, prescribing revised limits of liability for maritime claims, including claims arising from loss of life, personal injury and passenger-related incidents.Key Points:
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These Rules are formulated under Section 174 read with Sections 165 (1) and 166 of the Merchant Shipping Act, 2025.
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As per Section 173 of the Act, the rules apply to every Indian vessel as well as every other vessel that is not Indian but is entering or departing a port in India or operating in its coastal waters.
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However, the Rules do not apply to warships, naval auxiliary or other ships owned or operated by the government of any State and being used for non-commercial purposes.
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The Rules do not affect the operation of other laws relating to nuclear damage, oil pollution, or liabilities governed by special enactments.
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The Rules implement the Convention on Limitation of Liability for Maritime Claims, 1976.
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The term ‘Units of Account’ refers to Special Drawing Rights (SDRs) as defined by the International Monetary Fund.
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The SDR value will be converted into Indian rupees according to the value determined by the Reserve Bank of India on the date of constitution of the limitation fund under the Act.
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For claims involving loss of life or personal injury, the liability limit for ships not exceeding 2,000 tons has been fixed at 3,020,000 Units of Account, with additional tonnage-based liability limits prescribed for larger vessels.
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For claims other than loss of life or personal injury, the liability limit for ships not exceeding 2,000 tons has been fixed at 1,510,000 Units of Account, subject to additional tonnage-based calculations for larger vessels.
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Where the amount available for death or personal injury claims is insufficient, the amount available for other claims may be utilised to satisfy the unpaid balance.
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For salvors not operating from a ship, or operating solely on the ship in respect of which salvage services are rendered, liability limits will be calculated on the basis of a notional tonnage of 1,500 tons.
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For passenger claims involving death or personal injury, a ship owner’s liability limit will be calculated by multiplying 1,75,000 Units of Account by the number of passengers the vessel is authorised to carry.
Also Read: Modern Maritime Governance takes shape under Merchant Shipping Act, 2025
[Merchant Shipping (Limitation of Liability for Maritime Claims) Rules, 2026, dt. 7-7-2026]
