Bombay High Court
Mansel Ltd vs The Bunkers On Board The Ship M.V. ... on 5 May, 2017
Bench: A.S. Oka
1 app-319.15
pmw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ADMIRALTY AND VICE ADMIRALTY JURISDICTION
APPEAL NO.319 OF 2015
IN
ADMIRALTY SUIT NO.91 OF 2012
WITH
NOTICE OF MOTION NO.131 OF 2014
IN
ADMIRALTY SUIT NO.91 OF 2012
WITH
NOTICE OF MOTION (L) NO.921 OF 2015
IN
APPEAL NO.319 OF 2015
Mansel Limited, A company )
incorporated under The laws of Bermuda, )
having its registered office at Clarendon House, )
Church Street, West Hamilton, HM-11 )
Bermuda ) ... Appellant
Versus
1. The Bunkers on board )
the Ship M.V. Giovanna Iuliano. )
2. M.V. Giovanna Iuliano (and her charterers/ )
Managers and all others persons concerned )
and/or interested in her) foregin flag vessel,)
flying the flag of Italy together with her )
bunkers on board, at present lying in the )
port and harbor of Paradip, Orissa in )
Indian territorial waters. )
3. Crest Martime Chartering Indian Ocean )
Limited, A company incorporated under )
the laws of Republic of mauritius on )
15th June 1998 under the registration )
No. C19905 having its registered )
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address at Kross Border Trust Services )
Limited, St. Louis Business Centre CNR )
Desroches and St. Louis Street, Port Louis, )
Mauritius )
4. Deiulemar Shipping SPA, a company )
incorporated under the laws of Italy and )
having its office in Via Gunlielmo Macroni )
26, 80059, Torre del Gerco NA, Italy. ) ... Respondents
Mr. Rahul Narichania, Senior Counsel a/w Mr. Akshay Kolte - Patil and
Ms. Ajita Chure i/by M/s. Crawford Baylay and Co., for the Appellant.
Mr. Prashant S. Pratap, Senior Counsel a/w Mr. Hari Wadhwana i/by
Mr. Ashwini Sinha for the Respondent No.2.
CORAM : A.S. OKA &
SMT. ANUJA PRABHUDESSAI, JJ.
DATE ON WHICH SUBMISSIONS WERE HEARD : 22nd DECEMBER, 2016
DATE ON WHICH JUDGMENT IS PRONOUNCED : 5th MAY, 2017
JUDGMENT (PER A.S. OKA, J.):-
1 The question which arises for consideration is as under :-
"Whether this Court in exercise of its Admiralty jurisdiction
has a power to arrest and order sale of bunkers on the board
of a ship?"
2 With a view to appreciate the submissions canvassed across
the Bar, a reference to few facts will be necessary. The appellant is the
original plaintiff which is engaged in the business of chartering vessels
and of providing vessels for hire. The second respondent (second
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defendant) is a foreign sea going vessel registered at a port in Italy. The
second respondent was at the relevant time on a time charter to third
respondent (third defendant). The first respondent (first defendant) are
the bunkers on board of the second respondent. It is alleged in the suit
filed by the appellant that there is reason to believe that the third
respondent is the owner of the first respondent bunkers. The fourth
respondent (fourth defendant) is a Company incorporated in Italy
which is stated to be the owner of the second respondent.
3 The case made out in the plaint is that the appellant is
entitled to receive from the third respondent a sum of US$
15,00,301.07 and cost of arbitration of US$ 30,000 as well as a sum of
US$ 25,000 being the cost of the proceedings. By filing the Suit, the
appellant sought arrest, sequestration, condemnation and sale of the
first respondent - bunkers on the board on the second respondent
which are allegedly the property of the third respondent for securing
the aforesaid claim.
4 According to the case of the appellant, it entered into a
Time Charter dated 25th June 2010 with the owner of a vessel
m.v.Dalmatia G for a period of 36 months. The appellant, in turn, being
entitled to sub-charter, chartered the vessel m.v.Dalmatia G to the third
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respondent. The allegation in the suit is that the third respondent has
committed a breach of the Charter Party Agreement dated 17 th April,
2012 executed by and between the appellant and the said respondent as
regards vessel m.v Dalmatia G. The appellant invoked arbitration clause
under the said Charter Party Agreement. In the meanwhile, the second
respondent entered Paradip Port. Therefore, the appellant filed the
action seeking security for the arbitration.
5 The appellant chartered the vessel M.V. Dalmatia G to the
third respondent for the Charter Party Agreement dated 17 th April, 2012
for carriage of a consignment of nickel ore having quantity of 50,000
MT from Indonesia to China. The terms of the Charter Party Agreement
have been set out in the plaint. It is pointed out that as nickel ore is a
very dangerous cargo which is subject to liquefaction process, the
Charter Party Agreement contained nickel ore clause which inter alia
provided for appointment of an independent registered local surveyors
to check the cargo characteristics before and during the loading.
6 Various breaches allegedly committed by the third
respondent have been set out in the plaint. A reference is made to the
correspondence exchanged between the parties as well as their
respective advocates. The averments which are material for
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consideration of this Appeal are in clause (a) of paragraph 8 of the
plaint which reads thus :-
"a. Without prejudice to the Plaintiff's rights to proceed in
personam against Defendant No.3, the Plaintiff is
entitled to proceed against Defendant No.1 in rem as
security for the Plaintiff's maritime claim against
Defendant No.3, on account of the aforesaid amounts
outstanding, due and payable under the Charter Party
by Defendant No.3 to the Plaintiff. The Plaintiff's claim
concerns and/or relates amounts due and payable
under a charter party contract, and is a recognized
maritime claim. The Plaintiff further submits that
Defendant No.3 may not have any other tangible assets.
The Plaintiff is therefore, entitled to proceed against
Defendant No.1 Bunkers in rem as security for dues
arising under the Charter Party, under the
provisions of law, generally under the Admiralty
jurisdiction of this Hon'ble Court. The Plaintiff has a
maritime claim against Defendant No.1 Bunkers, on
account of outstanding amounts due and payable by
Defendant No.3 to the Plaintiff. The Plaintiff is
entitled to enforce, perfect and/or crystallize the same
by proceeding against Defendant No.1 Bunkers and by
arresting, sequestering, condemning and selling the
Defendant No.1 Bunkers, as security for the Plaintiff's
claim in arbitration."
(emphasis added)
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7 Therefore, a prayer was made for arrest of the first
respondent bunkers on the board of the second respondent and its
detention by warrant of arrest of this Court as a security for the
appellant's claim against the third respondent in the arbitration
commenced by the arbitration notice dated 1 st August, 2012 and for
interest / expenses, costs and poundage. A prayer was made for
condemnation of the first respondent - bunkers and for sale thereof.
8 In the suit, a notice of motion was taken out by the
appellant praying for arrest of the first respondent - bunkers on the
board of the second respondent. On an application for grant of ex-parte
relief made by the appellant, by order dated 22 nd August, 2012 read
with order dated 24th August, 2012, the learned Single Judge ordered
arrest of the first respondent - bunkers on board. By order dated 30 th
August, 2012 the learned Single Judge vacated the order of arrest when
the second respondent without prejudice to its rights and contentions
agreed to deposit an amount in Indian currency equivalent to US$
2,48,000 with the Prothonotary and Senior Master. The second
respondent took out Notice of Motion No.131 of 2014 for recall of the
ex parte order dated 22nd August, 2012 and 24th August, 2012 and for
directing the appellant to deposit in the Court or to furnish security in
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the sum of US$ 35,000 being the loss and damage suffered by the
second respondent as a result of the order of arrest and such further
amount calculated at the rate of US$ 17,500 per day from 28 th August
2012 (date of arrest) till the date of release of bunkers on board.
9 In support of the Notice of Motion, a contention was raised
by the second respondent that this Court had no jurisdiction to order
arrest of bunkers on board. The contention was that the arrest of
bunkers on board independent of the vessel is not permissible in law. It
was also contended that the first respondent - bunkers do not belong to
the third respondent against whom the appellant has a claim. The
learned Single Judge relied upon his decision in the case of Peninsula
Petroleum Limited Vs. Bunkers on Board the vessel, m.v. Geowave
Commander and others in Notice of Motion No.385 of 2014 in Admiralty
Suit No.85 of 20131. It was held in the said decision that this Court does
not have jurisdiction to arrest bunkers independent of vessel. Secondly,
the learned Single Judge held that a suit to arrest a ship in action in
rem for providing security for an award that may be made in arbitration
proceedings is not maintainable. Therefore, by the impugned order, the
learned Judge proceeded to reject the plaint by holding that the entire
order of arrest of the first respondent - bunkers on board was wrongful.
1 2014 SCC Online Bom 1895
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10 The learned Senior Counsel appearing for the appellant
and the learned Senior Counsel appearing for the second respondent
have made detailed submissions. The learned Senior Counsel appearing
for the appellant submitted that Admiralty jurisdiction of this Court can
be traced to its Letters Patent. He pointed out that under clause 32 of
the Letters Patent of 1865 the then existing Admiralty jurisdiction of
this Court was continued. He relied upon clause 53 of the
Charter/Letters Patent of 1823 which according to him conferred the
Admiralty jurisdiction on this Court (at that time, the Supreme Court of
Judicature of Bombay). He submitted that under clause 53, the
jurisdiction could be exercised against all ships, persons, things, goods
and wares. Therefore, the said jurisdiction was not restricted to a vessel
or ship. Thereafter, he referred to the provisions of the Admiralty Courts
Acts of 1840 and 1861 as well as the Colonial Courts of Admiralty Act
of 1890 and 1891. He submitted that there is no bar or embargo under
any of the four statutes on passing an order in rem of arrest of bunkers
on the board. Inviting our attention to the said Act of 1861 and in
particular Section 18, he submitted that the Act makes a distinction
between the expression ship and other property. His submission is that
if common law Courts could exercise jurisdiction in respect of the
property other than ships, there could be no impediment against an
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Admiralty Court passing an order of arrest of bunkers on board. He
submitted that Section 33 of the said Act of 1861 permits High Court of
Admiralty to withhold release of any property under its arrest.
11 Thereafter, the learned Senior Counsel appearing for the
appellant invited our attention to Rules 927 onwards of the Bombay
High Court Original Side Rules, 1980 (for short "O.S. Rules"). He
submitted that all the relevant Rules use the expression "any property".
He urged that Admiralty jurisdiction can be exercised over any property
apart from ships. He relied upon a decision of the Court of Appeal in
United Kingdom in the case of The Heinrich Bjorn 18852. He submitted
that the view taken therein is that the Admiralty jurisdiction can be
exercised not only against a ship but any property of the defendant. He
invited our attention to the provisions of an enactment in South Africa
and various articles on law in Norway. He has also taken us through a
decision of the Apex Court in the case of In Re m.v. Elisabeth3. He relied
upon subsequent decision of the Apex Court in the case of M.V. Sea
Success and another4 which holds that the decision in the case of m.v.
Elisabeth defines the jurisdiction of the Court but does not limit or
restrict it. He submitted that the Apex Court has also held that the
changing global scenario should be kept in mind having regard to the
2. 1885 Law Reports Probate Division Vol 10 page 44
3. 1993 (2) SCC 433
4. (2004) 9 SCC 512
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fact that there does not exist any primary enactment in India on the
Admiralty jurisdiction.
12 He submitted that the proposition that bunkers on board of
a ship cannot be arrested without there being claim against the ship is
not correct. He submitted that Letters Patent is a substantive law and
not purely a procedural law. He also dealt with the contention that
arrest of bunkers causes prejudice to innocent third parties.
13 He submitted that when Letters Patent gives jurisdiction to
the Court to arrest any property of the offender under the Admiralty
jurisdiction, the power cannot be excluded unless there is a specific
enactment excluding that power.
14 He submitted that if the appellant would have failed to
remove the bunkers, the Court could have vacated arrest due to failure
of the appellant to comply with the orders of the Court and to
compensate the applicant for the loss sustained. He submitted that the
third respondent could have simply re-bunkered the sailed vessel. He
submitted that at the port of Paradip, Indian Oil Corporation through
tank trucks provides bunkers. He submitted that the third respondent
could have easily mitigated the losses or delay by approaching the
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Court for calling upon the appellant to discharge the bunkers from the
vessel.
15 The learned Senior Counsel appearing for the second
respondent submitted that when High Court exercises Admiralty
jurisdiction it does not exercise civil or criminal jurisdiction. Admiralty
jurisdiction is in connection with maritime claims and can be said to be
exercising maritime jurisdiction as referred in the Letters Patent. He
submitted that the claims which cannot be considered in Admiralty
jurisdiction can be agitated by invoking other jurisdiction. He submitted
that 1890 and 1891 Colonial Courts Admiralty Act and the Admiralty
Courts Act, 1861 vested the Bombay High Court with the same
jurisdiction as that of English High Court by declaring the said Court as
a Colonial Court of Admiralty. He submitted that once a statute vests
Admiralty jurisdiction in this Court, Letters Patent cannot expand the
scope of that jurisdiction. He submitted that as held by the Apex Court
in the case of m.v.Elisabeth, for the purposes of expanding the
jurisdiction, subsequent enactments, international conventions, etc., can
be looked into.
16 The learned Senior Counsel appearing for the second
respondent would submit that what is required to be seen is whether
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12 app-319.15
English High Court had jurisdiction to arrest bunkers on board of a ship
when there was no maritime claim against the ship and when no cause
of action was available against the owner of the ship. He submitted that
the cause of action which is available to the appellant was in connection
with a Charter Party Agreement entered into with the third respondent
for another vessel. He relied upon a decision of the Court of Appeal in
England in the case of The Banco5. He submitted that reliance placed by
the appellant on the decision in the case of Heinrich Bjorn is
misconceived as in the subsequent judgment in the case of Beldis6, the
observation relied upon by the appellant is held as purely obiter.
17 The learned Senior Counsel appearing for the appellant by
way of rejoinder submitted that Bombay High Court had jurisdiction
because the first respondent - bunkers on Board of the second
respondent which are the property of the third respondent were present
within the territorial jurisdiction of this Court. He submitted that in the
decision in the case of m.v.Elisabeth, the Apex Court recognized that the
Admiralty jurisdiction of the Court was derived not only from the
enactments but also Letters Patent as well as customs and practice
which expressly recognise that any property of the defendant within the
jurisdiction may be arrested. He submitted that what is held by British
5. (1971) Vol. 1 Lloyd's Law Reports 49
6. (1935) Vol. 53 Lloyd's Law Reports 255
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Court in the case of Banco has no relevance as the Letters Patent of
1823 continue to be the source of this Court's Admiralty jurisdiction. He
urged that the case of Beldis relied upon by the second respondent dealt
with the law as applicable in 1936 and in this case we are dealing with
the Letters Patent of 1823. He, therefore, urged that this Court in
Admiralty jurisdiction has power to arrest bunkers on Board of a ship.
18 We have considered the submissions. Bunker is a name
given to the fuel which operates ships. Bunker on board of a ship is fuel
compartment in which ship's fuel is stored on board. Thus, if arrest of
bunker on board is ordered, it virtually amounts to arrest of vessel
inasmuch as the vessel cannot be removed from the port without
debunkering and without refueling. In the impugned order, the learned
Single judge has relied upon his own judgment in the case of Peinsula
Petroleum. The issue which arises for consideration is noted by the
learned Single Judge in paragraph 7 which reads thus :-
"7 The issue in this Notice of Motion which requires to
be decided is whether bunkers on board a vessel can
be arrested without any claim against the vessel and
independent of the vessel. Naturally it is the
Plaintiff's case that the Court should allow and it is
the Defendants' case that the Court should not.
The Plaintiff's submission primarily was that
this Court in exercise of its admiralty jurisdiction
must adopt a liberal interpretation of the expression
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property which can be arrested in exercise of its
jurisdiction. The counsel also submitted that the
Court must exercise its jurisdiction in equity and law,
unless expressly curtailed or barred and as there is
no express curtailment and/or bar on arrest of
bunkers, this Court must exercise jurisdiction to
arrest bunkers."
(emphasis added)
19 In the said case before the learned Single Judge, the
plaintiff relied upon Letters Patent, 1823 read with Letters Patent, 1865
and the Bombay High Court, (O.S.) Rules.
20 The learned Single Judge dealt with an argument that at
many places Admiralty Rules in O.S. Rules refers to the word
"property". In paragraphs 11 and 12, the learned Single Judge held
thus:-
"11 The Plaintiffs reliance on the High Court (O.S.)
Rules, 1980 as vesting jurisdiction in this court to
arrest bunkers is misconceived. The rules do not
provide for arrest of bunkers. The rules do not
provide for the manner in which the writ of
summons or warrant of arrest is to be served in case
of arrest of bunkers. Rule 946 on the contrary sets out
the manner in which the warrant of arrest or writ of
summons shall be served on the property against which
the suit is brought. Rule 946 (2) deals with a situation
where the property against which the suit is brought is
ship or cargo on board. Rule 946 (3) refers to property
against which the suit is brought is cargo which has
been landed or transshipped. It also deals with a case
where the cargo is in the custody of a person who will
not permit access to it. Rule 946 (4) deals with a
situation where the property against which the suit is
brought is freight.
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12 If bunkers were property against which the suit
could be brought in rem, then the manner of service
of writ of summons or warrant of arrest of bunkers
would also have been specifically provided not like
what the Plaintiff's counsel submitted that if no
property other than a ship, cargo or freight could be
arrested, the rules would have said so expressly. The
rules indicate which are the only properties against
which a suit in rem can be brought and bunker is
not one of the property."
(emphasis added)
21 In paragraph 14 of the said judgment, the learned Single
Judge held that only place where bunkers could be arrested and stored
is South Africa as there is a specific statute conferring jurisdiction of
arresting bunkers. The learned Single Judge relied upon various
paragraphs of the decision of the Apex Court in the case m.v. Elisabeth
and Ors. He held that whilst freight and cargo are considered as
maritime property, bunkers are not considered as maritime property. In
paragraph 24, he observed that the arrest of bunkers effectively results
in arrest of ship although there is no claim against the ship owner and
therefore, ship owner, who is a third party, is seriously prejudiced. In
paragraphs 26 to 28, the learned Single Judge held thus :-
"26 Discharge, storage and transportation of bunkers would
require appropriate permissions, licences and approvals
under the Petroleum Act, 1976 and the rules framed
thereunder. The Plaintiff's counsel in fairness agreed
that the Customs permission would be required and a
special receiver of the bunkers would have to be
appointed for storage pending sale. As these are
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imported goods, customs permissions would also be
required for discharge and storage under customs
bond.
27 There are 13 major ports and over 50 active minor
ports in India engaged in commercial shipping activity
and many of these may not have facilities for discharge
and storage of bunkers. Many of these do not have the
facility to provide bunkers to ships and this would
cause serious difficulty if bunkers are arrested and
unloaded from a ship. Such ships would effectively
become dead ships and cause serious threat to
navigation in the port, apart from the difficulties the
Master and crew on board the same may face in the
absence of fuel to run the generators. If there is cargo
on board, it would also be exposed to serious risks of
damage and deterioration depending on the nature of
the cargo. All these impediments also make it clear that
an order of arrest of bunkers would face serious
difficulties in enforcement in Ports in India.
28 On the Plaintiff's submission of equity and justice, the
Plaintiff to seek such discretionary relief first has to
establish that this Court has jurisdiction to arrest
bunkers on board a ship in which the Plaintiff has
failed. In my view, this Court does not have in rem
jurisdiction to arrest bunkers independent of ship."
For reasons which are set out hereafter, we respectfully
agree with the view expressed by the learned Judge on the power of
Admiralty Jurisdiction of this Court to pass an order of arrest of bunkers
on the board of a ship.
22 Now, we turn to the landmark judgment of the Apex Court
in the case of m.v. Elisabeth. The said decision arose out of a decision of
Andhra Pradesh High Court. A vessel m.v. Elisabeth was lying in the
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port of Marmagoa and on 8th February, 1984 the vessel left the port
without issuing bill of lading or without any documents for the goods
shipped as required by plaintiff - shipper. The goods were discharged
and handed over to the consignee at the port of destination at the
United Port Arab Emirates notwithstanding the direction of the plaintiff
not to deliver the goods by reason of buyer's failure to pay the agreed
price. The first defendant before the High Court was the vessel which
was owned by the second defendant which was a foreign company in
Greece. The suit was instituted in Andhra Pradesh High Court invoking
Admiralty jurisdiction by means of proceedings in rem. In the said suit,
the vessel was arrested when it entered the port of Vishakhapatanam on
13th April, 1984. On the owner of the vessel entering appearance and
providing security in the form of a Bank Guarantee, the vessel was
released from the arrest. The defendants in the said suit raised an issue
of jurisdiction. The contention was as regards the lack of Admiralty
jurisdiction in any High Court in India to proceed in rem against a
vessel on the alleged cause of action arising from the carriage of goods
from an Indian port to a Foreign port. In the said decision, the Apex
Court considered the powers of Madras High Court of entertaining a
suit in the Admiralty jurisdiction. In paragraph 13, the Apex Court held
that the chartered High Courts in India are Colonial Courts of Admiralty
under the Colonial Courts of Admiralty (India) Act of 1891 (for short
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"the said Act of 1891") exercising the same jurisdiction as was vested in
the High Court of Admiralty in England under the Admiralty Court Act,
1861. In the said decision, the Apex Court did not agree with the view
expressed by this Court in the case of Kamalakar Mahadev Bhagat v.
Scindia Steam Navigation Co. Ltd.7.
23 It was observed that with a view to appreciate the extent of
Admiralty jurisdiction, it is necessary to ascertain the scope and nature
of jurisdiction of the High Court of Admiralty in England under the
statute or otherwise in the year 1890. It was observed that by the
Judicature Act of 1873, the High Court of Admiralty was merged with
the High Court of Justice.
24 Thereafter, the Apex Court proceeded to consider the
provisions of the Colonial Courts of Admiralty Act, 1890 and other
enactments. In paragraphs 45 to 55 the Apex Court observed thus :-
"45. Admiralty Law confers upon the claimant a right in
rem to proceed against the ship or cargo as
distinguished from a right in personam to proceed
against the owner. The arrest of the ship is regarded
as a mere procedure to obtain security to satisfy
judgment. A successful plaintiff in an action in rem
has a right to recover damages against the property
of the defendant. 'The liability of the shipowner is not
limited to the value of the res primarily proceeded
against ... An action .... though originally commenced in
rem, becomes a personal action against a defendant
7. AIR 1961 Bom. 186
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upon appearance, and he becomes liable for the full
amount of a judgment unless protected by the statutory
provisions for the limitation of liability'. (Roscoe's
Admiralty Practice, 5th ed. p.29)
46. The foundation of an action in rem, which is a
peculiarity of the Anglo-American law, arises from a
maritime lien or claim imposing a personal liability
upon the owner of the vessel. A defendant in an
admiralty action in personam is liable for the full
amount of the plaintiff's established claim. Likewise, a
defendant acknowledging service in an action in rem is
liable to be saddled with full liability even when the
amount of the judgment exceeds the value of the res or
of the bail provided. An action in rem lies in the
English High Court in respect of matters regulated
by the Supreme Court Act 1981, and in relation to a
number of claims the jurisdiction can be invoked
not only against the offending ship in question but
also against a `sistership' i.e., a ship in the same
beneficial ownership as the ship in regard to which
the claim arose.
"The vessel which commits the aggression is treated as
the offender, as the guilty instrument or thing to which
the forfeiture attaches, without any reference
whatsoever to the character or conduct of the owner...."
(Per Justice Story, The United States v. The Big Malek
Adhel, etc., [43 US (2 How.) 210, 233 (1844)]
47. Merchant ships of different nationalities travel from
port to port carrying goods or passengers. They incur
liabilities in the course of their voyage and they subject
themselves to the jurisdiction of foreign States when
they enter the waters of those States. They are liable to
be arrested for the enforcement of maritime claims, or
seized in execution or satisfaction of judgments in legal
actions arising out of collisions, salvage, loss of life or
personal injury, loss of or damage to goods and the like.
They are liable to be detained or confiscated by the
authorities of foreign States for violating their customs
regulations, safety measures, rules of the road, health
regulations, and for other causes. The coastal State may
exercise its criminal jurisdiction on board the vessel for
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the purpose of arrest or investigation in connection
with certain serious crimes. In the course of an
international voyage, a vessel thus subjects itself to
the public and private laws of various countries. A
ship travelling from port to port stays very briefly in
any one port. A plaintiff seeking to enforce his
maritime claim against a foreign ship has no
effective remedy once it has sailed away and if the
foreign owner has neither property nor residence
within jurisdiction. The plaintiff may therefore
detain the ship by obtaining an order of attachment
whenever it is feared that the ship is likely to slip
out of jurisdiction, thus leaving the plaintiff without
any security.
48. A ship may be arrested (i) to acquire jurisdiction; or
(ii) to obtain security for satisfaction of the claim
when decreed; or (iii) in execution of a decree. In
the first two cases, the court has the discretion to insist
upon security being furnished by the plaintiff to
compensate the defendant in the event of it being found
that the arrest was wrongful and was sought and
obtained maliciously or in bad faith. The claimant is
liable in damages for wrongful arrest. This practice of
insisting upon security being furnished by the party
seeking arrest of the ship is followed in the United
States, Japan and other countries. The reason for the
rule is that a wrongful arrest can cause irreparable loss
and damages to the shipowner; and he should in that
event be compensated by the arresting party. (See
Arrest of Ships by Hill, Soehring, Hosoi and Helmer,
1985).
49. The attachment by arrest is only provisional and its
purpose is merely to detain the ship until the matter
has been finally settled by a competent court. The
attachment of the vessel brings it under the custody
of the marshal or any other authorized officer. Any
interference with his custody is treated as a contempt of
the court which has ordered the arrest. But the
marshal's right under the attachment order is not one of
possession, but only of custody. Although the custody of
the vessel has passed from the defendant to the
marshal, all the possessory rights which previously
existed continue to exist, including all the remedies
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which are based on possession. The warrant usually
contains a monition to all persons interested to appear
before the court on a particular day and show cause
why the property should not be condemned and sold to
satisfy the claim of the plaintiff.
50. The attachment being only a method of safeguarding
the interest of the plaintiff by providing him with a
security, it is not likely to be ordered if the defendant or
his lawyer agrees to "accept service and to put in bail or
to pay money into court in lieu of bail". (See Halsbury's
Laws of England, 4th edn. Vol. 1, p. 375 etc.).
51. The service of the warrant is usually effected by affixing
it on the main mast or single mast of the ship. A ship
which has been arrested under an order of attachment
may be released by the court if sufficient bail is put in
to cover the claim of the plaintiff as well as the costs of
the action. The sureties are liable for the amount
entered in the bail bond.
52. If the ship or cargo under arrest before judgment has
not been released by the defendant by putting in
sufficient bail and if the property is found deteriorating,
the court has the power to order the sale of the
property after notice has been duly issued to the parties
interested.
53. If the plaintiff has finally obtained a decree of
condemnation and sale of the ship, the court will issue
an order to the competent officer commanding him to
sell the property, in execution of the decree, and to
bring the proceeds into court. Thereupon the officer
shall issue proper notice and arrange for the sale of the
property by auction. The proceeds of the sale are paid
into the registry of the court and shall be disposed of by
the court according to law.
54. A personal action may be brought against the defendant
if he is either present in the country or submits to
jurisdiction. If the foreign owner of an arrested ship
appears before the court and deposits security as bail
for the release of his ship against which proceedings in
rem have been instituted, he submits himself to
jurisdiction.
55. An action in rem is directed against the ship itself to
satisfy the claim of the plaintiff out of the res. The
21 of 39
22 app-319.15
ship is for this purpose treated as a person. Such an
action may constitute an inducement to the owner
to submit to the jurisdiction of the court, thereby
making himself liable to be proceeded against by
the plaintiff in personam. It is, however, imperative
in an action in rem that the ship should be within
jurisdiction at the time the proceedings are started.
A decree of the court in such an action binds not merely
the parties to the writ but everybody in the world who
might dispute the plaintiff's claim."
(emphasis added)
In paragraphs 77, the Apex Court considered the provisions
of the Merchant Shipping Act, 1958. Paragraphs 77 to 81 read thus:
"77. The Merchant Shipping Act, 1958 contains various
provisions to enforce territorial jurisdiction. The Act
being essentially regulatory in character, the various
authorities, tribunals and Courts entrusted with the
administration and enforcement of its provisions are
specifically stated. The High Court is defined under
section 3(15) as follows :
"3(15). `High Court', in relation to a vessel, means the
High Court within the limits of whose appellate
jurisdiction -
(a) the port of registry of the vessel is situate;
(b) the vessel is for the time being; or
(c) the cause of action wholly or in part arises;"
(a) International Convention relating to the Arrest of
Seagoing Ships, Brussels, 10 May 1952 (IMC);
(b) International Convention on Certain Rules
concerning Civil Jurisdiction in Matters of
Collision, Brussels, 10 May 1952 (IMC);
(c) International Convention for the Unification of
Certain Rules relating to Penal Jurisdiction in
Matters of Collision, Brussels, 10 May 1952
(IMC); and
(d) International Conventions for the Unification of
Certain Rules of Law relating to Maritime Liens
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23 app-319.15
and Mortgages Brussels, 10 April 1926, and the
Revised Convention on Maritime Liens and
Mortgages, Brussels, 29 May 1967 (IMC).
Accordingly, a foreign ship falls within the jurisdiction
of the High Court where the vessel happens to be at the
relevant time - i.e., at the time when the jurisdiction of
the High Court is invoked, or, where the cause of action
wholly or in part arises.
78. The detention of a foreign ship is authorised in
terms of sections 443 and 444. In view of their vital
significance in the enforcement of maritime
jurisdiction, we shall read these two sections in full.
Section 443 defines the character and scope of the
power of detention:
"S.443. Power to detain foreign ship that has
occasioned damage. - (1) Whenever any damage has in
any part of the world been caused to property
belonging to the Government or to any citizen of India
or a company by a ship other than an Indian ship and
at any time thereafter that ship is found within Indian
jurisdiction, the High Court may, upon the application
of any person who alleges that the damage was caused
by the misconduct or want of skill of the master or any
member of the crew of the ship, issue an order directed
to any proper officer or other officer named in the
order requiring him to detain the ship until such time
as the owner, master or consignee thereof has satisfied
any claim in respect of the damage or has given
security to the satisfaction of the High Court to pay all
costs and damages that may be awarded in any legal
proceedings that may be instituted in respect of the
damage, and any officer to whom the order is directed
shall detain the ship accordingly.
(2) Whenever it appears that before an application can be
made under this section, the ship in respect of which
the application is to be made will have departed from
India or the territorial waters of India, any proper
officer may detain the ship for such time as to allow the
application to be made and the result thereof to be
communicated to the officer detaining the ship, and
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24 app-319.15
that officer shall not be liable for any costs or damages
in respect of the detention unless the same is proved to
have been made without reasonable grounds.
(3) In any legal proceedings in relation to any such damage
aforesaid, the person giving security shall be made a
defendant and shall for the purpose of such proceeding,
be deemed to be the owner of the ship that has
occasioned the damage."
(emphasis supplied)
The power of enforcement of an order of detention of a
foreign ship is dealt with by Section 444.
"S.444. Power to enforce detention of ship. - (1) Where under
this Act a ship is authorised or ordered to be detained,
any commissioned officer of the Indian Navy or any
port officer, pilot, harbour master, conservator of port
or customs collector may detain the ship.
(2) If any ship after detention, or after service on the
master of any notice of, or order for, such detention
proceeds to sea before she is released by competent
authority, the master of the ship shall be guilty of an
offence under this sub-section.
(3) When a ship so proceeding to sea takes to sea, when on
board thereof in the execution of his duty any person
authorised under this Act to detain or survey the ship,
the owner, master or agent of such ship shall each be
liable to pay all expenses of, and incidental to, such
person being so taken to sea and shall also be guilty of
an offence under this sub-section.
(4) When any owner, or master or agent is convicted of an
offence under sub-section (3), the convicting
magistrate may inquire into and determine the amount
payable on account of expenses by such owner, master
or agent under that sub-section and may direct that the
same shall be recovered from him in the manner
provided for the recovery of fines."
These provisions relate to detention by reason of
damage caused in any part of the world by a foreign
ship to property belonging to the Government of India
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25 app-319.15
or to an Indian citizen or company. The sections are
wide in terms and the expression `damage' is not
necessarily confined to physical damage. Ordinarily
damage is caused by physical contact of the ship, such
as in collision. But damage can also be caused to
property by breach of contract or acts of commission or
omission on the part of the carrier or his agents or
servants by reason of the negligent operation and
management of the vessel, as, for example, when cargo
is damaged by exposure to weather or by negligent
stowage; or, by the misconduct of those in charge of the
ship, like when cargo is disposed of contrary to the
instructions of the owner or by reason of theft and
other misdeeds. In all these cases, damage arises by
reason of loss caused by what is done by the ship or by
the breach, negligence of misdeeds of those in charge
of the ship. It must however be noticed that the
expression `damage done by any ship' has been
construed by the English Courts as not to apply to
claims against the carrying ship for damage done to
cargo. In the Victoria 1887 12 PD 105, the Court so
construed section 7 of the Admiralty Court Act, 1861
(24 Victoriae c. 10). It has been held to apply only to
physical damage done by a ship by reason of its coming
into contact with something. See The Vera Cruz, [1884]
9 PD 96; Currie v. M.Knight, [1897] AC 97 and The
Jade, [1976] 1 All. E.R. 920. In view of the specific
provisions of the English statutes of 1920, 1925, 1956
and 1981, it was unnecessary for the English Courts to
construe the expression broadly so as to include cargo
claims and the like. The last two enactments contain an
exhaustive list of maritime claims and questions in
regard to which the High Court can exercise
jurisdiction over any merchant ship by arresting it as it
enters the waters of Britain. This power, as already
noticed, is available, whatever be the nationality of the
ship or its owner or the domicile or place of residence
or business of the owner, or wherever the cause of
action has arisen. About the words `damage done by a
ship' in section 7 of the Admiralty Court Act, 1861 and
the decision in The Victoria [1887] 12 PD 105 to the
effect that the section had no application to claims
against the carrying ship for damage to cargo, the
following observation significantly appears in
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26 app-319.15
Halsbury's Laws of England, 4th ed. Vol. I (1), para 319
N. 12.
"...but this question is academic in the light of the
fact that jurisdiction in respect of claims for damage to
cargo carried in a ship is now expressly given by the
Supreme Court Act 1981 s.20(2) (g)."
79. In the absence of any statute in India comparable to
the English statutes on admiralty jurisdiction, there
is no reason why the words `damage caused by a
ship' appearing in section 443 of the Merchant
Shipping Act, 1958 should be so narrowly construed
as to limit them to physical damage and exclude any
other damage arising by reason of the operation of
the vessel in connection with the carriage of goods.
The expression is wide enough to include all
maritime questions or claims. If goods or other
property are lost or damaged, whether by physical
contact or otherwise, by reason of unauthorised acts
or negligent conduct on the part of the shipowner
or his agents or servants, wherever the cause of
action has arisen, or wherever the ship is registered,
or wherever the owner has his residence or domicile
or place of business, such a ship, at the request of
the person aggrieved, is liable to be detained when
found within Indian jurisdiction by recourse to
section 443 and 444 of the Merchant Shipping Act,
1958 read with the appropriate rules of practice and
procedure of the High Court. These procedural
provisions are but tools for enforcement of substantive
rights which are rooted in general principles of law,
apart from statutes, and for the enforcement of which a
party aggrieved has right to invoke the inherent
jurisdiction of a superior court.
80. The Indian Carriage of Goods by Sea Act, 1925 applies
to carriage of goods by sea under bills of lading or
similar documents of title from a port in India to any
other port whether in or outside India. (See Section 2).
The Act imposes certain responsibilities and liabilities
and confers certain rights and immunities upon the
carrier (see Articles III & IV). In respect of a claim
relating to an outward cargo, the cargo owner has a
26 of 39
27 app-319.15
right to bring a suit against a shipowner subject to the
period of limitation specified under Act, namely, one
year [Article III (6)]. The substantive rights recognised
by the statute are of equal application to foreign
merchant ships as they are to Indian merchant ships.
The Carriage of Goods by Sea Act does not, however,
contain any provision for the enforcement of the right
by arresting the foreign vessel found in Indian waters.
In the absence of arrest, no effective remedy against a
foreign owner may be available to the cargo owner. The
same is the position with regard to claims relating to
cargo carried under a charterparty. It is, therefore,
necessary that he should have recourse to the remedy
available to him under the Merchant Shipping Act. That
Act, as stated earlier, confers a right to arrest a vessel in
respect of any damage caused by a ship. If that
expression, in the absence of any other more
appropriate statute, is understood sufficiently broadly
as an enabling provision to effectively assume
jurisdiction over a foreign ship for the enforcement of a
substantive right recognised by law, there would be no
difficulty in finding a remedy for the right the law has
conferred on the cargo owner.
81. The Merchant Shipping Act empowers the
concerned High Court to arrest a ship in respect of a
substantive right. A right conferred by the Indian
Carriage of Goods by Sea Act, 1925 in respect of
outward cargo is one of those rights which can be
enforced by arrest and detention of the foreign ship
in order to found jurisdiction over the vessel and its
owners, just as it can be done in respect of inward
cargo by reason of the substantive rights conferred
by the Admiralty Court Act, 1861 read with the
Colonial Courts of Admiralty Act, 1890, and other
rules of law. The same principle must hold good for
carriage under a charterparty. These and other laws,
such as the law of contract, tort, crime, mortgage,
marine insurance, customs, port operations, etc.,
and the Civil and Criminal Procedure Codes as well
as the relevant rules of court regulating procedure
and practice together constitute the body of
substantive and procedural laws governing claims
relating to inward and outward cargo, and such
claims are enforceable against foreign ships by
27 of 39
28 app-319.15
recourse to arrest and detention when found within
jurisdiction. Viewed in this light, and by this
reasoning, the Andhra Pradesh High Court, as a
successor to the Madras High Court, does not lack
admiralty jurisdiction in respect of claims relating
to outward cargo."
25 Further in paragraph 82 the Apex Court held thus :-
"82. The admiralty jurisdiction of the High Court is
dependent on the presence of the foreign ship in
Indian waters and founded on the arrest of that
ship. This jurisdiction can be assumed by the
concerned High Court, whether or not the
defendant resides or carries on business, or the
cause of action arose wholly or in part, within the
local limits of its jurisdiction. Once a foreign ship is
arrested within the local limits of the jurisdiction of
the High Court, and the owner of the ship has
entered appearance and furnished security to the
satisfaction of the High Court for the release of the
ship, the proceedings continue as a personal
action."
In paragraph 83, the Apex Court has discussed the Brussels
Convention of 1952 which has not been adopted by India. In paragraph
85, about the Brussels Convention, the Apex Court held thus:
"85. It is important to remember that the Brussels
Convention on Arrest of Ships merely restricts or
regulates the power of the coastal States and is not
intended to confer power which they did not otherwise
have as sovereign States. `Arrest' to which the
convention refers is detention of a ship to secure a
maritime claim, and not seizure of a ship in execution
or satisfaction of judgment."
In paragraphs 86 to 92, the Apex Court concluded as under:
28 of 39
29 app-319.15
"86. The judicial power of this country, which is an aspect of
national sovereignty, is vested in the people and is
articulated in the provisions of the Constitution and the
laws and is exercised by courts empowered to exercise. It
is absurd to confine that power to the provisions of
imperial statutes of a bygone age. Access to court which
is an important right vested in every citizen implies the
existence of the power of the Court to render justice
according to law. Where statute is silent and judicial
intervention is required, Courts strive to redress
grievances according to what is perceived to be
principles of justice, equity and good conscience.
87. In the words of Chief Justice Marshal :-
"The jurisdiction of courts is a branch of that
which is possessed by the nation as an independent
sovereign power. The jurisdiction of the nation within its
own territory is necessarily exclusive and absolute. It is
susceptible of no limitation not imposed by itself....".
(The Schooner Exchange v. M'Faddon & Ors. U.S.
Supreme Court Reports, Cranch 5-9, p. 114, 133 (3 L.ed.
287).
88. Admiralty jurisdiction is an essential aspect of judicial
sovereignty which under the Constitution and the laws is
exercised by the High Court as a superior court of record
administering justice in relation to persons and things
within its jurisdiction. Power to enforce claims against
foreign ships is an essential attribute of admiralty
jurisdiction and it is assumed over such ships while
they are within the jurisdiction of the High Court by
arresting and detaining them.
89. All persons and things within the waters of a State fall
within its jurisdiction unless specifically curtailed or
regulated by rules of international law. The power to
arrest a foreign vessel, while in the waters of a
coastal State, in respect of a respect of a maritime
claim, wherever arising, is a demonstrable
manifestation and an essential attribute of territorial
sovereignty. This power is recognised by several
international conventions. These conventions contain
the unified rules of law drawn from different legal
29 of 39
30 app-319.15
systems. Although many of these conventions have
yet to be ratified by India, they embody principles of
law recognised by the generality of maritime States,
and can therefore be regarded as part of our common
law. The want of ratification of these conventions is
apparently not because of any policy disagreement, as is
clear from active and fruitful Indian participation in the
formulation of rules adopted by the conventions, but
perhaps because of other circumstances, such as lack of
an adequate and specialised machinery for
implementation of the various international conventions
by coordinating for the purpose the concerned
Departments of the Government. Such a specialised body
of legal and technical experts can facilitate adoption of
internationally unified rules by national legislation. It is
appropriate that sufficient attention is paid to this aspect
of the matter by the authorities concerned. Perhaps the
Law Commission of India, endowed as it ought to be
with sufficient authority, status and independence, as is
the position in England, can render valuable help in this
regard. Delay in the adoption of international
conventions which are intended to facilitate trade
hinders the economic growth of the nation.
90. The British statute assimilating Indian High Courts to the
position of the English High Court in respect of admiralty
jurisdiction is an enabling legislation and it is but one of
the strands of jurisdiction vested in the High Court by
virtue of the constitutional provisions. The jurisdiction of
the High court is governed by the Constitution and the
laws, and the continuance in force of the existing laws in
not a fetter but an additional source of power. Access to
court for redressal of grievance being an important right
of every person, it is essential that the jurisdiction of the
courts is construed harmoniously and consistently with
its vital function in that respect, so that absence of
legislation will not jeopardise that right.
91. Admiralty jurisdiction, despite the peculiarities of its
origin and growth-rooted as it is in history and nurtured
by the growing demands of international trade is
nevertheless a part of the totality of jurisdiction vested in
the High Court as a superior court of record, and it is not
a distinct and separate jurisdiction as was once the
30 of 39
31 app-319.15
position in England before the unification of courts. The
1890 and 1891 Acts specifically conferred admiralty
jurisdiction on the Indian High Courts by reason of their
being courts of unlimited jurisdiction. These acts did not
create any separate or distinct jurisdiction, but merely
equated the Indian High Courts to the position of the
England High Court (united and consolidated as that
Court has been since 1875) for the exercise of admiralty
powers within the jurisdiction of the former. The
contrary view expressed in some of the decisions of the
High Courts referred to earlier is clearly wrong.
92. Once a foreign ship is arrested in Indian waters by an
order of the High Court, in exercise of the admiralty
jurisdiction vested in it by statute, or inherent in it as
a court of record, in respect of any maritime claim
against its owner, wherever the cause of action may
have arisen, and whether or not the ship is
subsequently released by the owner furnishing
security, proceeding must continue against the owner
as in any other suit. The arrest of the vessel while in
Indian waters by an order of the concerned High
Court, as defined under the Merchant Shipping Act,
1958 [Section 3(15)] attracts the jurisdiction of the
competent court to proceed with the trial, as in the
case of any other suit, as an action against the owner,
and any decree obtained by the plaintiff is executable
against any property of the owner available within
jurisdiction, including the security furnished by him
for release of the vessel."
(emphasis added)
26 The learned Senior Counsel appearing for the appellant
relied upon the provisions of Section 2 of the Colonial Courts of
Admiralty Act, 1890 as well as on the provisions of the said Act of 1891.
The significance of the said Act of 1861 is that the Madras and Bombay
High Courts were declared as Colonial Courts of Admiralty.
31 of 39
32 app-319.15
27 In paragraph 27 of the decision in the case of m.v.
Elisabeth, the Apex Court observed that there is no reason why the
jurisdiction of Indian High Courts should have been considered to have
frozen on the date of the Colonial Courts of Admiralty Act, 1890 (for
short "the Act of 1890") came into force as far as the three High Courts
in India are concerned.
28 The learned Senior Counsel appearing for the appellant
relied upon Sub-Section (2) of Section 2 of the said Act of 1890 which
provides that the jurisdiction of a Colonial Court of Admiralty shall,
subject to the provisions of this Act, be over the like places, persons,
matters and things. Relying upon the said phraseology, he urged that
the Admiralty jurisdiction is not confined to ships. He relied upon Rules
927 onwards of OS Rules and submitted that the use of the word
property shows that the power to arrest in Admiralty jurisdiction is not
confined to arresting ships. He also relied upon phraseology used in the
Letters Patent of 1823. The use of the words property or places or
matters or things is not conclusive. The use of the words has nothing to
do with the action in rem taken under Admiralty jurisdiction. The
reliance placed on Letters Patents of this Court from 1823 onwards, the
Admiralty Courts Act, 1861 and Colonial Courts of Admiralty Acts of
1890 and 1891 will not help the Appellant as the contours of the
32 of 39
33 app-319.15
jurisdiction of the Chartered High Courts India are laid down by the
Apex Court in the case of m.v.Elisabeth. Paragraphs 48, 55 and 82 of the
said decision confine the Admiralty jurisdiction to arrest of ship.
Moreover, paragraph 45 makes a reference to only cargo and ship.
29 We have already made an extensive reference to the law
laid down by the Apex Court in the case of m.v.Elisabeth which
continues to bind this Court. In paragraph 82, the Apex Court has
unequivocally laid down that Admiralty jurisdiction of the High Court is
dependent on the presence of the foreign ship in Indian waters and
founded on the arrest of the ship. The Apex Court had an occasion to
consider the provisions of the Admiralty Court of 1861 and the Colonial
Courts of Admiralty Act, 1890 and the said Act of 1891.
30 Reliance was placed by the learned counsel appearing for
the appellant on a decision of the Division Bench of this Court in the
case of m.v. Mariner IV, a Foreign Flag Vessel and another v. Videsh
Sanchar Nigam Ltd.8. The controversy before this Court was whether in
exercise of Admiralty jurisdiction a sister ship of the offender ship can
be arrested. Reliance is placed on paragraph 29 of the said decision
which reads thus :-
"29. The aforesaid observations of the Apex Court in our
opinion very clearly suggest that unless there is any
prohibition by the municipal laws the principles of
8 1998(1) Mh.L.J.
33 of 39
34 app-319.15
trans-national law or international conventions could
be applied for affording remedy for the satisfaction or
realisation of maritime claim. It is clear that every
person, thing and foreign vessel entering Indian waters
comes within the jurisdiction of the High Court of
coastal state by the very act of its entering the Indian
territorial waters. In such a case if any one has any
maritime claim against the owner of offending ship
then not only the offending ship but also any other
property or ship belonging to such a person within
Indian territorial waters, can be attached or arrested by
the High Court of the coastal state. Such a course is not
only not prohibited by any municipal laws but in our
opinion the provisions of Order XXXVIII and
particularly Rule 5 thereof clearly shows acceptance of
such principle by the municipal laws."
The Division Bench has extensively considered the decision
in the case of m.v. Elisabeth. Firstly the said decision of this Court does
not deal with the issue of jurisdiction to arrest bunkers on board.
Secondly, it holds that if anyone has any maritime claim against the
owners of offending ship, at his instance, not only the offending ship
but also any other property or ship can be attached or arrested. Perhaps
the Division Bench relied upon the Brussels convention. In the facts of
this case, the fourth respondent is the owner of the ship (second
respondent) against whom the appellant has no maritime claim.
31 In paragraph 29, the Division Bench has observed that any
other property or ship can be attached or arrested. Attachment referred
to therein is in respect of any other property and the arrest referred to
34 of 39
35 app-319.15
therein is in respect of the ship and not in respect of any other property.
Therefore, the said decision will not help the appellant in any manner.
32 Reliance placed by the appellant on the decision in the case
of Heinrich Bjorn will not help the appellant. The reason is that in the
subsequent decision of the Court of Appeal in the case of Beldis, it is
held that the observations in the judgment in the case of Heinrich are
erroneous. The relevant part of the decision in the case of Beldis records
thus :-
"In many continental systems of law and
procedure (e.g., in Germany, Sweden, Belgium, and
to a certain extent in France) there is a right of
arrest for founding jurisdiction and obtaining bail in
respect of any ship or other property of a defendant
although wholly unconnected with the cause of
action sued on. But in England I have never heard of
such an arrest and I do not believe any attempt has
even been made here to exercise such a right in
practice within the memory of any living
practitioner in the Admiralty Court - until the
plaintiffs in the present action made it. In my view
there is no such right in English law to-day.
Mr. Miller for the respondents naturally relied
strongly upon the expression of opinion in the Court
of Appeal in the case of the Heinrich Bjorn, 10 P.D.
44, which appears in the judgment of the Court
(composed of Brett, M.R., Bowen and Fry, L.JJ.) and
delivered by Fry, L.J., at P. 54. The learned Lord Justice
there says in regard to the procedure in rem : "The
arrest need not be of the ship in question, but may be of
any property of the defendant within the realm." That
observation was, however, purely obiter. Apart from an
unfounded contention of a bottomry bond, which the
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36 app-319.15
Court rejected, the only question of law relevant to the
decision of the case was whether a maritime lien
attaches in English law to a valid claim for necessaries.
That was necessarily the sole issue in that case, since
the ship for which the necessaries had been supplied
had passed by sale from the ownership of the ship
owner for whom he necessaries had been supplied to
that of new owners who had nothing to do with the
voyage when the necessaries were supplied. If there
was a maritime lien the new owners took subject to the
lien; if there was no maritime lien their ship was free
and the plaintiff had no right to arrest it in their hands.
The opinion of the Court in the Heinrich Bjorn is
entitled to great respect; but it is not binding on us,
and in my view the dictum is erroneous."
(emphasis added)
33 The decision of the Court of Appeal in the case of Banco
was rendered in 1971. The said decision considered the provisions of
Administration of Justice Act, 1956 which incorporates Brussels
convention. The Court of Appeal held thus :-
"The Courts of common law were, however, jealous of
the jurisdiction of the old Court of Admiralty and
issued prohibitions against it. They succeeded in
cutting down its jurisdiction a great deal. So much so
that its jurisdiction in rem to arrest goods became
limited to a jurisdiction to arrest the offending ship
itself. The right to arrest was conterminous with the
maritime lien. Where there was a maritime lien, the
right to arrest the ship existed. Where there was no
maritime lien, there was no right to arrest the ship. A
maritime lien, of course, existed only in respect of the
offending ship. It lay for such claims as salvage, wages
and collision damages. The claimant had a right to
arrest the offending ship for his claim, whenever he
could get hold of her. Even if she had been sold to an
innocent purchaser for value, still he could arrest her
for any claim in respect of which he had a maritime
lien : see The Bold Buccleugh, (1851) 7 Moo. P.C. 267.
36 of 39
37 app-319.15
Later on, the right to arrest was extended beyond the
extent of a maritime lien so as to cover necessaries, see
The Heinrich Bjorn, (1885) 10 P.D. 44. But it only
applied to arresting the ship itself for which the
necessaries were supplied. It did not apply to any
other ship. Finally, in 1935, this Court held that the
procedure in rem to arrest a ship only applies to the
ship to which the cause of action relates. It does not
apply to a ship or other property of the defendant
unconnected with the cause of action : see The
Beldis, [1936] p. 51; (1935) 53 Ll.L.Rep. 255.
I ought to pause here to add a word so as to
avoid confusion. If the defendant enters an
appearance, the action in rem proceeds just as an
action in personam. If judgment is entered against
the defendant, it can be executed against any of his
property within the jurisdiction, be it his other ships
or any other goods. A writ of fi. fa., or other writ of
execution, can be issued against his property but
only after judgment has been obtained: see The
Dictator, [1892] P. 304; The Gemma, [1899] P. 285;
The Dupleix, [1912] P. 8. If no appearance is
entered, however, the action remains, as it began,
an action in rem only, operating only against the
ship arrested. If judgment is entered in default of
appearance, it can be enforced by sale of the ship,
but not against the defendant personally, of.
Castrique v. Imrie and Tomlinson, (1870) L.R. 4 H.L.
414 at p. 432."
(emphasis added)
The Court noted the position of law as obtaining in 1936
which reads thus :-
"The history of actions in rem and the jurisdiction of
the Admiralty Court with regard thereto, up to 1936,
was exhaustively considered by Sir Boyd Merriman, P.,
in The Beldis, [1936] P. 51; (1935) 53 Ll.L. Rep. 255.
By that judgment it was made clear that it was only the
allegedly offending vessel which could be made the
"res" so as to give the Admiralty Court jurisdiction in
37 of 39
38 app-319.15
an action in rem where an action in rem where an
action in rem was permissible. Jurisdiction in rem
could not be created by the arrest or seizure of any
other vessel, whether or not it was a sister vessel, nor
of any other property. Admiralty procedure could not
lawfully be used for the arrest or seizure of any
property other than the allegedly offending vessel."
After considering the provisions of the Act of 1956 and the
Brussels Convention, the Court of Appeal held that the offending ship or
any other ship of the same ownership can be arrested.
34 Therefore, the contention that even in England, Admiralty
Court in exercise of Admiralty jurisdiction can order arrest of bunkers
on board of vessel cannot be accepted at all. Therefore, in our view, the
decision of the learned Single Judge in the case of Pennisula Petroleum
is correct which holds that this Court in exercise of Admiralty
jurisdiction has no power to arrest bunkers on the board of a ship. The
view taken is consisted with the decision of the Apex Court in case of
m.v. Elisabeth. After having gone through other decisions relied upon by
the appellant, we find that none of them support the proposition to the
contrary.
35 Accordingly, we see no merit in the Appeal and the same is
dismissed.
38 of 39
39 app-319.15
36 Even if the second respondent makes an application for
return of security in terms of the impugned order of the learned Single
Judge, the same shall not be acted upon for a period of twelve weeks
from today.
(SMT. ANUJA PRABHUDESSAI, J) (A.S. OKA, J)
39 of 39
