Third Circuit Affirms COGSA’s One-Year Time Bar Applies to Fraud Claims and Joins Majority in Limiting Deviation Doctrine

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On May 28, 2026, the United States Court of Appeals for the Third Circuit held that the Carriage of Goods by Sea Act’s one-year limitation period barred a shipper’s fraud claim against a carrier. In SLT Imports Inc v. SAR Transport Systems Pvt Ltd, the court found that a fraud claim which is in substance a breach of contract claim cannot be used to evade COGSA’s time bar. The court also joined the First, Second, and Eleventh Circuits in holding that a carrier’s failure to collect an endorsed bill of lading constitutes a misdelivery—not a quasi-deviation—and that even if a deviation were found, it would not void COGSA’s one-year statute of limitations. This decision reinforces the strength of COGSA’s procedural defenses and makes it significantly harder for claimants to plead their way around the statute of limitations.

Background

SLT Imports, a New Jersey-based importer, financed the importation of goods from India by a third party, Krishna Food Corp. SAR Transport Systems, an Indian carrier, shipped the cargo under bills of lading that named SLT as consignee. Under the bills of lading, SAR was obligated to release goods to Krishna only upon presentation of an endorsed bill of lading. SLT later discovered that SAR had allegedly made thirty deliveries to Krishna without ever receiving an endorsed bill of lading, accepting letters of indemnity instead. SLT sued SAR for fraud but did not file suit until August 2022—years after the last deliveries in 2015 and 2016.

The Fraud Claim Was Really a Contract Claim

COGSA provides that carriers are absolved from all liability unless suit is brought within one year after delivery of the goods. The court criticized SLT’s fraud claim as an “artful attempt to dodge the COGSA limitations period,” finding that the essence of the complaint was not fraud but breach of contract. The court explained that a plaintiff “cannot say that a defendant defrauded him just by reneging on a contractual promise,” and that SLT’s allegations amounted to repeated failure to perform a contractual term falling squarely within COGSA’s provisions. Because each bill of lading is a separate contract for which the one-year limitations period runs independently, and because SLT did not file suit until 2022 for deliveries occurring in 2015 and 2016, the claim was time-barred.

Misdelivery Is Not a Deviation

SLT argued that the deviation doctrine should vitiate the limitations period, but the court disagreed. Under Third Circuit precedent, deviation is primarily understood as geographic—a vessel’s straying from the customary course of the voyage. The court joined its sister circuits in holding that non-delivery or misdelivery of cargo, including failure to collect an endorsed bill of lading before releasing goods, does not constitute a quasi-deviation; rather, it is simply a breach of the carriage contract subject to standard COGSA defenses. Moreover, even if the carrier’s conduct were deemed a deviation, the court held it would not vitiate COGSA’s one-year limitations period because the time bar is a procedural rule governing the window for suit—unrelated to the allocation of risk for conduct on the high seas that the deviation doctrine is meant to address. The weight of appellate authority supports the continued applicability of COGSA’s time-for-suit provision even after a deviation.

Takeaway

This decision provides further uniformity among the federal circuits on two important points: first, that carriers cannot be sued for fraud based on conduct that amounts to a breach of contract; and second, that the deviation doctrine does not override COGSA’s time bar. The ruling serves as a powerful tool for defense counsel and claims handlers, making it significantly harder for claimants to plead their way out of COGSA’s established procedural defenses. Shippers and carriers alike should take note that the one-year limitations period will be strictly applied regardless of how a complaint is pled.

If you have any questions regarding the above, or concerning COGSA generally, please contact Jon Werner and Robert O’Connor of Montgomery McCracken’s Maritime and Transportation Industry Group.