TRW & Co · Trade and customs
Logistics and Warehousing Contracts in the UAE
Logistics liability UAE law allocates depends on the transport mode and the role each provider plays. This guide explains the 2023 Maritime Law, the Montreal Convention for air cargo, warehouse and forwarding liability, the contract terms that matter and how to protect a cargo claim against short notice periods and time bars, as of October 2026.
Key pointWhether a freight forwarder is liable for the whole journey or only its own negligence turns on the documents it issued and how it charged, not on the 'agent only' label in its terms, so identify the role before choosing whom to claim against.
At a glance
New Maritime Law
Federal Decree-Law No. 43 of 2023 took effect on 29 March 2024, replacing the 1981 Commercial Maritime Law for sea carriage, liens and vessel arrest.
One-year sea time bar
Claims under contracts of maritime carriage and bills of lading are generally subject to a one-year limitation period under the new Maritime Law.
Montreal for air
The UAE is party to the Montreal Convention 1999, which imposes strict but limited carrier liability for international air cargo and a two-year time bar.
Warehousing is deposit
Storage contracts are governed by deposit rules in the Civil Transactions Law, in force from 1 June 2026, plus the Commercial Transactions Law and contract terms.
Caps have limits
Liability caps between commercial parties are generally upheld onshore but cannot protect fraud or gross fault, and courts can adjust disproportionate agreed compensation.
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The short answer: how logistics liability UAE rules work
Logistics liability UAE law allocates depends first on the mode of transport and the role each provider actually plays. Sea carriage is governed by the Maritime Law issued in 2023, international air cargo by the Montreal Convention, and land carriage and warehousing largely by the Commercial Transactions Law and the civil law rules on deposit. Contracts can shape that allocation, but mandatory rules limit how far.
The most expensive mistakes are rarely about the law itself. They come from not knowing whether a freight forwarder acted as carrier or agent, missing a short notice period after delivery, or signing a warehouse agreement whose liability cap bears no relation to the value of the stock.
This guide, current as of October 2026, explains the framework, how carrier and warehouse liability works in practice, the contract terms that matter and how to run a cargo claim. It is written for shippers, distributors and logistics providers operating onshore, in free zones and across the Gulf.
The legal framework for carriage and storage
Sea carriage: the Maritime Law
Federal Decree-Law No. 43 of 2023 concerning the Maritime Law was issued in September 2023 and took effect on 29 March 2024, replacing the Commercial Maritime Law of 1981. It governs contracts of carriage by sea and bills of lading, the liability of carriers and the limits on that liability, liens and vessel arrest. It also sets short time bars: claims under contracts of maritime carriage and bills of lading are generally subject to a one-year period.
Air cargo: the Montreal Convention
The UAE is a party to the Montreal Convention 1999, which governs international carriage of cargo by air. It imposes strict liability on the carrier for destruction, loss or damage, subject to a per-kilogram limit expressed in Special Drawing Rights and periodically revised. It also requires written complaints within strict periods after receipt or delay, and claims must be brought within two years.
Land carriage, forwarding and storage
Domestic road carriage, forwarding and many logistics services are commercial activities governed by the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022). Warehousing is, in legal terms, largely a contract of deposit for reward. From 1 June 2026, the general rules on deposit, contractual liability and the court's power to adjust agreed compensation come from the Civil Transactions Law (Federal Decree-Law No. 25 of 2025); see our overview of the new Civil Transactions Law.
International road carriage
Cross-border trucking to Saudi Arabia, Oman and the wider Gulf is significant, but the position of the CMR Convention in UAE courts is not settled. Shippers should not assume a convention regime applies; the contract should state the liability basis, limits and governing law expressly.
Free zones, bonded storage and the DIFC and ADGM
Free zone warehouses operate under federal civil and commercial law plus the zone's own regulations and customs controls. Goods stored under duty suspension in free zones or customs warehouses must be accounted for, so stock losses can trigger customs liability as well as a commercial claim. Logistics contracts governed by DIFC or ADGM law apply those centres' common-law-based rules, which tend to enforce caps and exclusions more literally.
Carrier, forwarder or agent: who is liable?
A freight forwarder may act as principal, contracting to carry the goods and subcontracting the actual carriage, or as agent, simply arranging carriage on the shipper's behalf. The distinction drives everything else in logistics liability UAE disputes. A principal is responsible for the whole journey, including its subcontractors, subject to the applicable limits. An agent is generally responsible only for its own negligence in selecting and instructing others.
Courts look at substance, not labels. Issuing a house bill of lading or air waybill in the forwarder's own name, quoting an all-in rate and controlling the movement point towards principal status. Standard trading conditions that describe the forwarder as "agent only" may not prevail if the documents and conduct say otherwise.
For multimodal movements, liability often depends on where the loss happened. If damage cannot be localised, the contract terms and the transport document become decisive. Shippers should ask for a single contracting party with clear end-to-end liability, or accept the gaps knowingly and insure them.
Liability regimes compared
The table summarises the main regimes behind logistics liability UAE shippers and providers encounter. Limits and periods vary with the facts and the documents, so treat this as orientation rather than a calculation tool.
| Activity | Main source | Liability basis | Key practical point |
|---|---|---|---|
| Sea carriage | Maritime Law (Federal Decree-Law No. 43 of 2023) | Carrier liable for loss or damage in its charge, with statutory limits and defences | One-year time bar for carriage claims; prompt written notice of damage |
| International air cargo | Montreal Convention 1999 | Strict liability subject to a per-kilogram SDR limit | Written complaint within short periods; two-year time bar |
| Domestic road and air | Commercial Transactions Law | Carrier responsible for safe delivery unless a recognised defence applies | Contract terms and documents matter heavily |
| International road | Contract, possibly CMR if incorporated | Depends on governing law and terms | State limits and law expressly |
| Warehousing | Civil Transactions Law deposit rules and Commercial Transactions Law | Duty of care over stored goods; terms can cap liability within limits | Caps cannot generally protect fraud or gross fault |
| Freight forwarding | Contract and Commercial Transactions Law | Principal: whole carriage; agent: own negligence | Documents and conduct decide the role |
Warehousing and third-party logistics: logistics liability UAE providers carry
The standard of care
A warehouse keeper paid to store goods must take reasonable care of them, keep them identifiable and return them on demand or at the end of the term. Commercial warehouse contracts typically add obligations on receipt checks, segregation, stock counts, temperature control and security. If the contract is silent, the civil law rules on deposit fill the gaps.
Caps, exclusions and their limits
Third-party logistics providers usually cap liability at a low figure per kilogram or per incident, often far below the value of the goods. Under onshore UAE law, such caps are generally respected between commercial parties, but they cannot protect a party from liability for its own fraud or gross fault, and courts can adjust agreed compensation that is clearly disproportionate. See our guide to limitation of liability, indemnities and warranties.
Retention of goods for unpaid charges
Warehouse keepers and carriers commonly claim a right to hold goods until charges are paid. UAE law recognises rights of retention in some circumstances, and the Maritime Law provides for liens over cargo. Shippers should negotiate the scope of any contractual lien, so a dispute over one invoice does not freeze an entire distribution network.
Bonded and free zone storage
Where goods are held under customs control, the provider's records feed directly into the owner's customs compliance. Shortages may be treated as goods released to the local market without duty. The contract should require reconciled stock reports and cooperation with audits, which we discuss in customs audits and trade investigations.
Match the liability cap to your insurance, not to the provider's standard terms. If the warehouse cap is a small fraction of stock value, either negotiate a higher cap with a premium, require the provider to insure goods for full value, or make sure your own cargo and stock policy covers the gap without a subrogation waiver you did not intend.
Terms that matter in logistics and warehousing contracts
Most disputes over logistics liability UAE businesses face trace back to a handful of clauses. A well-drafted logistics agreement covers:
- Scope and role. Whether the provider acts as principal or agent, and which subcontractors it may use.
- Service levels. Measurable KPIs for receipt, picking accuracy, dispatch times and stock accuracy, with service credits.
- Liability and insurance. Caps per incident and per year, exclusions, who insures what and at what value.
- Stock control. Cycle counts, shrinkage allowances, reporting and audit rights.
- Customs and regulatory duties. Responsibility for customs documentation, permits and controlled goods.
- Data and systems. Ownership of warehouse management data and access on exit.
- Exit. Transition assistance, release of goods and limits on liens during disputes.
- Law and forum. Governing law, courts or arbitration, and how small claims are handled.
For outsourced logistics more broadly, see our page on outsourcing agreements in the UAE, and for the sale contract that sits above the logistics chain, Incoterms and cross-border sales from the UAE.
How to run a cargo or storage claim
- Note damage on delivery. Record visible loss or damage on the delivery receipt or transport document before signing it clean.
- Give written notice fast. Send a written claim notice to the carrier, forwarder or warehouse within the shortest applicable period, which can be days rather than weeks.
- Preserve evidence. Keep packaging, photographs, temperature logs, seals and tally records; avoid disposing of goods until surveyed.
- Appoint a surveyor. Arrange a joint survey where possible so the cause and extent of loss are recorded independently.
- Notify insurers. Inform cargo or stock insurers promptly and follow their claims conditions.
- Identify the right defendant. Work out who contracted as carrier, who actually performed and which regime applies to the leg where loss occurred.
- Protect the time bar. Diary the limitation period early and seek a written extension or issue proceedings before it expires.
Short time bars are the single biggest cause of lost recoveries in logistics liability UAE claims. Our guide to limitation periods in the UAE explains the wider rules.
Illustrative scenario: temperature-sensitive stock
This scenario is illustrative only; the parties are generic. A distributor stores temperature-sensitive consumer goods with a free zone logistics provider. A refrigeration failure over a weekend damages a large part of the stock. The provider points to its standard terms, which cap liability at a low amount per kilogram and exclude consequential loss.
The distributor's position depends on the facts and the documents: whether the provider breached specific temperature-monitoring obligations, whether the failure involved gross fault, and whether the distributor's own insurance responds. Because the contract required continuous monitoring with alarms, and logs show alarms were ignored, the distributor has an argument that the cap should not protect the provider.
The lesson is drafting, not litigation. A negotiated agreement with specific monitoring duties, a realistic cap, full-value insurance and data access would have made recovery faster and cheaper.
Common mistakes in logistics liability UAE matters
Signing clean receipts
Drivers and warehouse staff often sign delivery notes or receipts without remarks to avoid delay. A clean receipt is strong evidence that goods were delivered in good condition, which shifts the burden onto the claimant to prove otherwise. Train receiving staff to note visible damage, shortages and broken seals on the document itself, take photographs and escalate the same day. For concealed damage, send written notice within the applicable period as soon as it is discovered.
Assuming the forwarder is only an agent
Shippers sometimes chase the shipping line directly because the forwarder's terms say "agent only". If the forwarder issued its own house bill of lading and charged an all-in rate, it may well be liable as contracting carrier. Conversely, providers that act as principal in practice cannot always hide behind agency wording. Identify the role from the documents and correspondence before deciding whom to claim against, and notify all potentially liable parties in time.
Missing short notice periods and time bars
International air cargo complaints must be made in writing within days of receipt, and claims under contracts of sea carriage are subject to a one-year time bar under the Maritime Law. Recourse claims between carriers and forwarders can have even shorter periods. A claim that is strong on the merits can be lost entirely on timing. Diary all periods at the outset and seek written extensions where negotiations continue.
Ignoring customs exposure on lost stock
When goods stored under duty suspension go missing, customs authorities may treat them as released to the local market and demand duty and penalties from the owner or the licensed warehouse. That exposure sits alongside the commercial claim against the provider. Logistics contracts should allocate responsibility for customs consequences of shortages and require prompt notification and cooperation if customs opens an enquiry.
Using a cap that does not fit the cargo
Weight-based caps work poorly for light, high-value goods such as electronics, pharmaceuticals or luxury items. A cap that looks reasonable on paper may cover a tiny fraction of real loss. Declare value where the regime allows, negotiate a value-based cap or require insurance for full value, and check that your own policy does not contain a waiver of subrogation that prevents your insurer recovering from the provider.
Cross-border angle and next steps
Many UAE supply chains connect South Asian manufacturing, including Bangladesh and India, with Gulf and African markets via Jebel Ali and Khalifa Port. A single shipment may involve a Bangladeshi exporter, a UAE forwarder, a foreign shipping line and a Saudi consignee, each with different documents and laws. Choose governing law and forum deliberately, because they shape how logistics liability UAE-linked disputes are decided, and make sure the contractual chain gives you a claim against someone solvent and reachable.
For shipping-specific disputes, see our shipping and maritime practice. Before signing or renewing a logistics agreement:
- Confirm each provider's role and the regime that applies to each leg.
- Align caps, insurance and declared values with the real value of goods.
- Build notice periods and time bars into your operating procedures.
- Require stock reporting, audit rights and customs cooperation.
- Limit liens and secure data access on exit.
TRW & Co reviews logistics and warehousing contracts, advises on cargo claims strategy and coordinates with surveyors and insurers. Where court representation is needed, we work alongside locally licensed advocates. Contact our Dubai team at info@trw.co or +971 58 942 1012.
Frequently asked questions
01Is a freight forwarder liable for lost cargo in the UAE?
It depends on its role. If the forwarder contracted as principal, for example by issuing its own house bill of lading and charging an all-in rate, it is generally liable for loss during the whole carriage, subject to the applicable limits. If it acted only as agent arranging carriage, it is usually liable only for its own negligence in selecting and instructing carriers. Courts look at the documents and conduct, not just the label in standard terms.
02What is the time limit for a sea cargo claim in the UAE?
Under Federal Decree-Law No. 43 of 2023 on the Maritime Law, in force since 29 March 2024, claims arising from contracts of maritime carriage and bills of lading are generally subject to a one-year time bar. Notice of damage must also be given promptly, and recourse claims between carriers can have shorter periods. Because the facts affect when time starts, diary the deadline as soon as a loss is discovered and seek a written extension if talks continue.
03Can a UAE warehouse limit its liability for damaged goods?
Yes, within limits. Commercial warehouse contracts commonly cap liability per kilogram or per incident and exclude consequential loss, and these clauses are generally respected between businesses. However, onshore UAE law does not allow a party to exclude liability for its own fraud or gross fault, and courts can adjust agreed compensation that is clearly disproportionate to the actual loss. DIFC or ADGM law may apply caps more literally.
04Does the CMR Convention apply to trucking from the UAE?
The position is not settled, and shippers should not assume CMR applies to international road carriage involving the UAE. The safer course is to state the liability regime, limits, governing law and forum expressly in the carriage contract or consignment note. If you want CMR-style terms, incorporate them contractually and check how the chosen court or tribunal is likely to treat that incorporation.
05Who is responsible if goods go missing from a free zone warehouse?
Commercially, the warehouse keeper is responsible under the storage contract if it failed to take reasonable care. Separately, customs authorities may treat goods missing from duty-suspended storage as released to the local market, leading to duty and penalty claims against the goods owner or the licensed warehouse. Contracts should allocate both risks and require prompt reporting and cooperation with any customs enquiry.
06What should I do first after discovering cargo damage?
Record the damage on the delivery document if possible, take photographs, keep packaging and seals, and send written notice to the carrier, forwarder or warehouse straight away. Notify your insurer, arrange a joint survey and avoid disposing of the goods until they have been inspected. Then identify which regime applies and diary the time bar. Early, documented steps are often what decides whether a claim can be recovered.
Sources and official materials
- Federal Decree-Law No. 43 of 2023 concerning the Maritime Law — Sea carriage, liens and limitation; effective 29 March 2024
- Federal Decree-Law No. 50 of 2022 on the Commercial Transactions Law — Commercial carriage, forwarding and obligations
- Federal Decree-Law No. 25 of 2025 on the Civil Transactions Law — Deposit and contractual liability rules from 1 June 2026
- ICAO – Montreal Convention 1999 parties — States party to the convention on international carriage by air
- Dubai Customs — Customs warehousing and free zone procedures
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
