Limitation of Liability and Limitation Periods in Indonesian Shipping

Originally published in Lexology Panoramic: Shipping 2027.

By Setyawati Fitrianggraeni, S.H., LL.M., FCIArb., FAIADR, Reynalda Basya Ilyas, and Tiyana Sigi Pertiwi, S.H., LL.M.

In brief

Indonesia has not ratified the international limitation conventions, and its Shipping Law is silent on limitation of liability, so limitation rests on the colonial-era Indonesian Commercial Code, which caps liability in Netherlands Indies guilders per cubic metre of net tonnage. In practice, however, Indonesian judges generally treat those low caps as no longer relevant, and there is no recent case law on how limitation is imposed. Time limits are clearer: cargo claims expire after one year and collision claims after two years, against a general 30-year period under the Civil Code, and neither courts nor arbitral tribunals have an implied power to extend them. The law is stated as at 22 May 2026.

The limitation regime

Indonesia has yet to ratify the International Convention relating to the Limitation of Liability of Owners of Sea-Going Ships 1957 and the International Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976). The Shipping Law is silent with regard to the limitation of claims. The Indonesian Commercial Code, however, provides certain limitations of liability as follows:

Thus far, there have been two publicly available Indonesian cases in which the defendant invoked an article 470(2) defence to limit potential liability. However, these two cases were declared inadmissible before they ever reached consideration of their merits, and as such, it is not yet possible to draw a conclusion on the attitude of Indonesian courts to such defences.

Under article 476 of the Commercial Code, the liability limitation provisions may not apply if the damage is a result of intent or serious fault by the carrier, prompting claims of full compensation. Any conditions made that contravene this will be void, and any contractual provision purporting to exclude or limit liability in such circumstances is void.

The Commercial Code has not been revised or developed since Indonesia’s independence in 1945. Furthermore, there is no guidance regarding the equivalent amount of Netherlands Indies guilders to the present Indonesian rupiah or other currencies. However, several court decisions have referred to the price of gold at that time in interpreting Netherlands Indies guilders to determine the amount of compensation.

Procedure for establishing limitation

Article 316a of the Reglement op de Rechtsvordering (RV) (part of the Indonesian Civil Procedural Laws) provides a specific procedure for establishing limitation under articles 474 and 541 of the Indonesian Commercial Code, namely that a cash deposit must be submitted to the court clerk or registrar at the court where the vessel is registered.

However, no recent case law has been found as to how such limitation of liability is imposed by the courts in Indonesia in practice. Field research at one district court, a jurisdiction where many vessels are registered, confirms the same. Although the provisions under the Indonesian Commercial Code and the RV are considered by the archives of the court clerk as still valid to fill any vacuum of law based on article II of the Transitional Rules of Indonesia’s 1945 Constitution, the implementation of the RV and other Dutch colonial era law will be under the judge’s analysis and discretion. Even if there is a possibility that the counterparty tries to evoke the low limitation amount under the aforesaid provisions of the Commercial Code through the procedures set under the RV, in practice, most of the time judges will not implement it since it is generally considered as no longer relevant.

Break of limitation

Generally, the Indonesian Commercial Code provides the possibility for a carrier to limit liability in cases where it has caused damage or loss to cargo or injury to its passengers. The limitation is voided, or in other words, the carrier may be held liable to the full extent of the damage or injury suffered, if these are due to an intentional act or gross negligence on the part of the carrier, or if it has been agreed between the shipper and the carrier that the statutory limitations would be overridden as between them. However, although the provisions of the Indonesian Commercial Code have never been revoked and are still in force in the Indonesian legal system, there have been no relevant Indonesian precedents regarding the breaking of limitation for the liability of carriers in reference to these provisions.

Meanwhile, while the Shipping Law states that the carrier is liable for the death or injury of a passenger, perish, loss or damage of the goods, loss due to delay of a passenger or goods, or loss or damages suffered by a third party due to the operation of the vessel, the law is silent on the limitation of liability itself. However, article 41 provides that the carrier can be partially or fully released from liability for the above loss or damages if it is not caused by fault on its part.

Passenger and luggage claims

Indonesia has not ratified the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 nor the International Convention relating to the Limitation of Liability of Owners of Sea-Going Ships 1957. Passenger and luggage liability claims in Indonesia are governed by domestic law, particularly the provisions in the Shipping Law and the Indonesian Commercial Code. The Commercial Code recognises the following carriers’ limitations of liability: based on article 470(2), the package limitation of liability for damages or loss of carried goods; based on article 474(2), the tonnage limitation of liability; and based on article 541, the limitation applicable in collision cases in particular.

Under article 40 of the Shipping Law, a sea transport company is liable for the safety and security of passengers and/or goods carried. Under article 41, this liability arises from ship operations and covers: (1) death or injury of passengers; (2) destruction, loss, or damage of carried goods; (3) delay in carriage of passengers and/or goods; and (4) loss suffered by third parties.

The Shipping Law establishes the categories of liability but does not set specific monetary limitation caps for passengers or luggage. Under Government Regulation No. 20 of 2010 on Water Transport, article 141 provides that the limit of liability for cargo carriage is to be determined by agreement between the service user and provider in accordance with the transport agreement or applicable regulations. There is no equivalent specific monetary cap for passenger or luggage claims in the sea transport context under Indonesian law.

Limitation periods for liability

According to article 1967 of the Indonesian Civil Code, generally there is a 30-year time limit for any legal claim. Specifically for maritime claims, the time limit for cargo claims is one year (article 481 in conjunction with article 741 of the Commercial Code) and for all legal claims regarding compensation for damages due to collisions it is two years (article 741 of the Commercial Code). The restriction of the time limit for claims may also be decided by the parties based on the principle of freedom of contract.

The relevant Indonesian statutes, such as the Indonesian Civil Code and the Indonesian Commercial Code, do not have any implied rules which would allow a panel of judges or an arbitral tribunal to extend the statutory time limits to file claims before the courts. The ADR Law provides that the claimant must submit their statement of claims within the time limit set by the sole arbiter or the panel of arbitrators, but is silent on the matter of whether they have the power to extend the time limit which they have set, and neither do the subsequent articles provide any clear rule on the subject. The Rules of the Indonesian National Arbitration Board (BANI) do not have any implied rules to extend the statutory time limit for the filing of claims.

Related parts: Hub: Indonesia Shipping Law Guide 2027 | Part 6: Collision, Salvage, Wreck Removal, and Pollution in Indonesia | Part 9: Carriage of Goods by Sea and Bills of Lading in Indonesia | Part 11: Jurisdiction and Dispute Resolution for Shipping in Indonesia

For advice on limitation of liability, limitation periods, and shipping disputes in Indonesia, contact Anggraeni and Partners at connect@ap-lawsolution.net.