Bombay High Court
Global Integrated Bulkers Pte Ltd vs Cargo Of 14,072.337 Mts Of ... on 19 January, 2018
Bench: R.D. Dhanuka
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vai
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ADMIRALTY & VICE ADMIRALTY JURISDICTION
IN ITS COMMERCIAL JURISDICTION
JUDGE'S ORDER NO.253 OF 2017
IN
COMMERCIAL ADMIRALTY SUIT (LODGING) NO.665 OF 2017
Global Integrated Bulkers Pte. Ltd. )
A Company incorporated under the Laws )
of Singapore and having its office at 1, )
North Bridge Road, #19-04/05, High )
Street Centre, Singapore - 179094 ) ...Plaintiff
....Versus....
1). Cargo Of 14,072.337 Mts Of )
Limestone, discharged from m.v. )
DONG TANH and currently lying at )
Haldia Dock Complex, Kolkata Port )
and within the Admiralty jurisdiction )
of this Hon'ble Court. )
)
2). Sun Jin C & S Company Limited )
A Company incorporated under the )
Laws of Korea and having its office )
at Banwol Industrial Complex )
18-14 12 Haean - Ro, 31, Beon - )
Gil, Danwon - Ku Ansan - Si, )
Gyeonggi - Do, Korea. )
)
3). Hindustan National Glass And )
Industries Limited, A Company )
incorporated under the Companies )
nd
Act, 1956 and having its office at 2 )
Red Cross Place, Kolkata - 700 001. ) ...Defendants
Mr.Ashwin Shanker with Mr.Bimal Rajasekhar and Ms.Ridhi Nyati for
the Plaintiff.
1
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Mr.Krishnaraj Thacker with Mr.Prathamesh Kamat, Mr.Hussain
Dholkawala and Ms.Aditi Maheshwari i/b Ganesh & Co. for the
Defendant Nos.1 and 3.
CORAM : R.D. DHANUKA, J.
RESERVED ON : 27TH NOVEMBER, 2017
PRONOUNCED ON : 19TH JANUARY, 2018
JUDGMENT :-
1. The plaintiff has filed the Judge's Order No.253 of 2017
inter-alia praying for arrest of the defendant no.1 cargo of 14,072.337
Mts of limestone, discharged from m.v. DONG TANH presently in the
port and harbour at Kolkatta, in the State of West Bengal and seeks
a further order that in the event of the defendants depositing in this
Court the sum of US$ 332,007.76 together with interest on the
principal amount of US$ 282,007.76 at the rate of 12% p.a. from the
date of institution of the suit till payment / realization, together with
poundage or furnishing a security to the satisfaction of the Admiralty
Registrar, High Court, Bombay in the sum of US$ 332,007.76
together with interest on the principal amount of US$ 282,007.76 at
the rate of 12% p.a. from the date of institution of the suit till payment
/ realization etc. the said warrant of arrest shall not be executed
against the defendant no.1 cargo. The plaintiff has filed commercial
admiralty suit against the defendants inter-alia praying for an order
and decree to pay to the plaintiff a sum of US$ 332,007.76 together
with interest on the principal amount and for arrest of the defendant
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no.1 cargo. Some of the relevant facts for the purpose of deciding this
Judge's Order are as under :
2. It is the claim of the plaintiff that the plaintiff is the
disponent owner of the vessel m.v. DONG TANH. Dong Do Marine
JSC time chartered the vessel to Dooyang Limited. The said
Dooyang Limited time chartered the vessel to Amaranthe Shipping
Pte. Ltd. The said Amaranthe Shipping Pte. Ltd. time chartered the
vessel to Global Integrated Bulkers Pte. Ltd. (defendant no.1). By a
voyage charterparty dated 2nd June, 2017, the plaintiff chartered the
vessel m.v. DONG TANH to the defendant no.2 for carriage of the
defendant no.1 cargo. It is the case of the plaintiff that the plaintiff
instructed the head owner of m.v. DONG TANH to issue the original
Bill of Lading No.DP/CEB-001 dated 23rd August, 2017 with the
defendant no.2 as the shipper and defendant no.3 as the consignee.
The Bill of Lading incorporated all the terms of the charterparty dated
2nd June, 2017 and bound all holders thereof to the terms of the
charterparty.
3. It is the case of the plaintiff that on 5 th September, 2017,
the defendant no.1 cargo was discharged at Haldia port. It is the case
of the plaintiff that an amount of US$ 282,007.76 became due and
payable to the plaintiff under the said charterparty dated 2 nd June,
2017 which amount was initially due from the defendant no.2. The
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defendant no.3 accepted the Bill of Lading with the knowledge of
alleged encumbrance of the plaintiff. On 5 th September, 2017, the
plaintiff issued a notice of lien upon Haldia port.
4. It is the case of the plaintiff that on 23 rd October, 2017, the
Kolkatta Port Trust (Haldia Dock Complex) started threatening the
plaintiff that it would force the agent to issue delivery order for
delivery of cargo. According to the plaintiff, the defendant no.2 has
been influencing the port trust to get involved in the contractual
matters. On 14th November, 2017, the plaintiff approached this Court
for arrest of the defendant no.1 cargo contending that the plaintiff has
its contractual lien against the said cargo.
5. Mr.Ashwin Shanker, learned counsel for the plaintiff invited
my attention to the Fixture Note (Voyage Charterparty) dated 2 nd
June, 2017 between the plaintiff and the defendant no.2 and more
particularly the terms and conditions mentioned therein. Clause 25 of
the said Fixture Note provided that any disputes out of the said
Fixture Note was to be referred to arbitration in Singapore according
to English Law. Clause 4 of the said document provided about the
quantity of limestone in bulk and minimum 20,000 MT. Discharging
ports mentioned in the said document was 1SB 1 SP HALDIA, ECI -
AAAA. Under the said document, the freight payable was as per
charterparty referred therein. Clause 29 of the said Fixture Note
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provided " Otherwise as per clean gencon CP 94".
6. Learned counsel for the plaintiff invited my attention to
various correspondence exchanged between the plaintiff and the
defendants and also the notice invoking arbitration agreement. It is
submitted that the Bill of Lading incorporated all the terms of the
charterparty dated 2nd June, 2017 and bound all holders thereof to the
terms of the charterparty. The Bill of Lading is liable for any claim
under the said charterparty. It is the case of the plaintiff that an
amount of US$ 282,007.76 became due and payable to the plaintiff
under the charterparty which was initially due from the defendant
no.2. He submits that the said liability has been admitted by the
defendant no.2 in various correspondence annexed at page nos.13,
26, 43, 52 and 55 of compilation of documents.
7. It is the case of the plaintiff that by virtue of the
incorporation of the charterparty terms in the Bill of Lading, any
holder of the Bill of Lading also became jointly and severally liable for
the same. It is submitted that the defendant no.3 had accepted the
Bill of Lading with the knowledge of encumbrance. He submits that
the defendant no.1 cargo is an offending cargo in respect of maritime
claim of the plaintiff having arisen and thus the plaintiff is entitled to
seek arrest of the defendant no.1 to secure its claim. He submits that
the plaintiff has a contractual lien under clause 8 of the charterparty
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dated 2nd June, 2017 for all the amounts due under the charterparty.
The plaintiff has validly exercised the lien against the defendant nos.2
and 3. The plaintiff is in control and possession of the defendant no.1
cargo. He placed reliance on the passage at page 282 to 283, 497
and 498 of Halsbury's Laws of England (Fifth Edition) Volume - 7 and
would submit that the Bill of Lading in the present case incorporates
all the terms of the charterparty dated 2 nd June, 2017 including the
lien clause.
8. In his alternate submission, it is submitted by the learned
counsel for the plaintiff that the plaintiff has a statutory lien conferred
by section 60 of the Major Port Trusts Act, 1963. The plaintiff has
validly exercised the said statutory lien against the defendant nos.2
and 3 under the provisions of the said Major Port Trusts Act, 1963.
The plaintiff has a right to proceed against the defendant no.1 cargo
in rem under the Admiralty Law. He submits that the rights of the
plaintiff of exercising lien validly on the defendant no.1 cargo is under
threat of being wrongfully defeated by interference of the port induced
by the defendant no.3. It is submitted by the learned counsel for the
plaintiff that under the Admiralty Law, since the defendant no.1 cargo
is the offending cargo i.e. cargo in relation to which the claim arose,
the cargo is directly connected to the cause of action and thus can be
arrested. In support of this submission, learned counsel placed
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reliance on an unreported judgment of this Court in case of Pacific
Gulf Shipping (Singapore) Pte. Ltd. vs. S.R.K. Chemicals Ltd. &
Anr. in Notice of Motion (Lodging No.74 of 2017 in Commercial
Admiralty Suit (Lodging) No.51 of 2017 and in particular paragraphs
6, 8 and 10.
9. It is submitted by the learned counsel that since the Bill of
Lading incorporated the charterparty dated 2nd June, 2017, the
plaintiff can enforce its rights under the charterparty against the
defendant no.2. He submits that all the charterparty in the chain, it is
charterparty to which the plaintiff is a party, was incorporated in the
Bill of Lading and all claims and liens arises under the said specific
charterparty.
10. It is submitted by the learned counsel that even the client
does not admit that the property in goods had been validly passed
from the defendant no.2 to the defendant no.3 as required under
section 1 of the Bills of Lading Act. He submits that the defendant
no.3 has not asserted on oath all its holder of the original Bill of
Lading. If the property in the goods has passed from the defendant
no.2 to the defendant no.3 in the manner prescribed, the defendant
no.3 became, subject to all liabilities jointly and severally liable under
the Bill of Lading.
11. Learned counsel for the plaintiff placed reliance on section
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1 of the Indian Bills of Lading Act, 1856 and on pages 315 to 317
from Halsbury's Laws of England (Fifth Edition), Volume - 7 in
support of his submission that the plaintiff is entitled to claim lien on
the defendant no.1 vessel.
12. It is submitted by learned counsel that the defendant no.3
was fully aware of the encumbrance or lien on the defendant no.1
cargo before making any payments for it. The defendant no.3 was
told specifically by the plaintiff about the claims and liens on the
cargo. The defendant no.3 had negotiated and obtained a discount in
the price from the defendant no.2 in view of there being an
encumbrance on the said cargo. He submits that the defendant no.2
has concealed these facts from this Court.
13. Learned counsel for the plaintiff placed reliance on various
provisions of the said charterparty dated 2nd June, 2017 and would
submit that the defendant no.2 had various options under the said
charterparty. There were several discrepancies in the documents
submitted by the defendant no.2. The defendant no.3 would have
waived the discrepancies in exchange for reduction in the price. He
submits that the defendant no.3 has concealed the amendments to
the letter of credit. No actual proof of payment had been submitted.
14. It is submitted by the learned counsel for the plaintiff that
the price declared to the Customs by the defendant no.3 is less than
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the contractual price which would indicate that the defendant no.3
had negotiated a better price and had taken the benefit of expenses
of encumbrance. The plaintiff has very good chances of succeeding
in the suit. He submits that whether there is privity of contract
between the plaintiff and the defendant no.3 i.e. the effect of
incorporation of terms of the charterparty dated 2 nd June, 2017 into
Bill of Lading or not is a triable issue. He submits that his client is
entitled to proceed against the cargo irrespective of any such privity
is also a matter of interpretation of contract and is a triable issue. If
the defendant no.1 cargo is allowed to be released, the plaintiff will
not have any property to be proceeded against. The plaintiff can
proceed only against the defendant no.1 cargo, which is the only
assets available in respect of which the claim had arisen. The plaintiff
is entitled to proceed against the said cargo in rem for its claim.
15. Learned counsel for the plaintiff placed reliance on the
judgment of the Supreme Court in case of Videsh Sanchar Nigam
Limited vs. M.V. Kapitan Kud & Ors., (1996) 7 SCC 127 and in
particular paragraphs 13 and 14. He submits that the claims made by
the plaintiff is a liquidated debt. Even if the claim of the plaintiff is
considered as an unliquidated debt, the plaintiff can still apply for
interim relief. He submits that the defendant nos.2 and 3 are in bad
financial shape admittedly and thus the arrest of the defendant no.1
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cargo is necessary to secure the maritime claim of the plaintiff.
16. Learned counsel for the plaintiff placed reliance on the
provisions of the Admiralty Court Act, 1861, judgment of the Calcutta
High Court in case of Liberty Commodities Ltd. vs. LMJ
International Ltd. & Anr., (2004) ILR 2 Cal.492 and the judgment of
this Court in case of Mansel Limited vs. The Bunkers on Board the
Ship M.V. Biovanna Iulian & Ors., in Appeal No.319 of 2015 and in
particular paragraph 21 thereof. He placed reliance on the
paragraphs 4.69 and 4.70 of the passages from the Commentary on
"Admiralty Jurisdiction & Practice by Nigel Meeson". He also placed
reliance on few paragraphs from the Commentary on Admiralty And
Maritime Law by Thomas J. Schoenbaum.
17. Learned counsel for the plaintiff placed reliance on the
judgment of the Federal Court of Appeal in case of Phoenix Bulk
Carriers Limited vs. Kremikovtzi Trade also known as
Kremikovski Trade (2007) 1 SCR 588, the judgment of the Federal
Court of Appeal in case of Kremikovtzi Trade also known as
Kremikovski Trade vs. Phoenix Bulk Carriers Limited (2006)
FCA 1, a passage from the Commentary of Carver On Bills Of
Lading, the judgment delivered by the High Court of South Africa
exercising its Admiralty jurisdiction in case of Taxfield Shipping
Limited vs. The Cargo Currently Laden on Bord The MV New
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Market & Ors. delivered on 13th April, 2006, the judgment of the
Supreme Court in case of Liverpool & London S.P. & I Association
Ltd. vs. M.V. Sea Success I & Anr. (2004) 9 SCC 512.
18. Mr.Thacker, learned counsel appearing for the defendant
nos.1 and 3 submits that the defendant no.3 had purchased and
imported defendant no.1 cargo from the defendant no.2. In support of
this submission, he placed reliance on various documents annexed at
Exhibits "A" to "D" to the affidavit in reply such as Import Purchase
Order, Letter of Credit, Bill of Entry for Home Consumption and E
Receipt for Customs Duty Payment. He submits that arrest of cargo is
not permissible in Admiralty jurisdiction. The Admiralty jurisdiction of
this Court is founded on arrest of ship or vessel. There is no statutory
provision or provision in the Arrest Conventions which contemplates
arrest of cargo. It is submitted by the learned counsel that there is no
privity of contract between the plaintiff and the defendant no.3 and
thus the defendant no.3 is not liable for any purported claims made
by the plaintiff. The plaintiff has already instituted arbitration
proceedings in Singapore against its contractual party i.e. against the
defendant no.2 for recovery of its purported claims which forms the
subject matter of this suit. The plaintiff is thus not entitled to seek
arrest of the defendant no.1 cargo which belongs to the defendant
no.3 in support of the purported claims of the plaintiff against the
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defendant no.2.
19. It is submitted that the plaintiff does not have any right or
lien in respect of the defendant no.1 cargo. The alleged exercise of
the purported lien is wholly wrong, illegal and invalid. He submits that
the plaintiff does not have possession of the defendant no.1 cargo.
After discharge from vessel m.v. DONG TANH, the defendant no.1
cargo was stored at the licensed plot of the defendant no.3 at Haldia
Dock Complex. The defendant no.3 is in exclusive possession of the
same ever since. Haldia Dock Complex recovers the license fees for
the plot where the defendant no.1 cargo is present lying from the
account of the defendant no.3. Learned counsel placed reliance on
the copies of Plot Application Import Form and the Offer Letter dated
9th September, 2017 issued by the Calcutta Port Trust.
20. It is submitted by the learned counsel that the cargo in
respect of which the plaintiff seeks arrest belongs to the resident of
India. He submits that the admiralty action for arrest of Indian cargo
is not maintainable. The defendant no.3 is a limited company with
substantial assets and if any decree is passed in the suit filed by the
plaintiff against the defendant no.3, the same can be enforced
against such assets.
21. It is submitted by the learned counsel that the claim of the
plaintiff is for demurrage which is in the nature of unliquidated
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damaged and is disputed by the defendant no.2. He submits that no
interim relief can be prayed in a claim for unliquidated damages.
22. It is submitted by the learned counsel that pursuant to an
import purchase order, the defendant no.3 had purchased the
limestone from the defendant no.2. By and under voyage charterparty
dated 2nd June, 2017, a vessel M.V. IONNA D subsequently
substituted by M.V. DONG THANH was chartered to the defendant
no.2. The defendant no.2 shipped the defendant no.1 cargo by
vessel. On completion of loading operations, on behalf of the Master
of the Vessel, his agent issued Bill of Lading dated 23 rd August, 2017.
The same Bill of lading was issued by Dong Do Maritime JSC, the
head owner of the vessel. The property in the defendant no.1 has
passed to the defendant no.3 by virtue of consignment under the Bill
of Lading.
23. It is submitted that it is admitted by the plaintiff in its
solicitor's letter dated 26th October, 2017 that the defendant no.3 is
the holder of Bill of Lading. The defendant no.3 has challenged the
invocation of the Admiralty jurisdiction of this Court by the plaintiff for
arrest of cargo. The Admiralty jurisdiction of this Court can be invoked
only in an action in rem against the vessel or in an action in rem
against the cargo where the claim against the cargo is secured by
maritime claim. In absence of an action against the vessel or a claim
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against the cargo to which maritime lien is attached, the Admiralty
jurisdiction of this Court cannot be invoked. No action in rem as
sought to be raised by the plaintiff against the defendant no.1 can be
maintainable in view of the fact of the alleged claims of the plaintiff is
based on the alleged contractual lien and the alleged statutory lien
which are admittedly not the maritime claim. The purported claims of
the plaintiff against the cargo is not connected with any vessel.
24. It is submitted that the plaintiff has not initiated any action
in rem against the vessel. It is submitted that without there being a
maritime claim against the vessel, the plaintiff cannot invoke
Admiralty jurisdiction of this Court for its purported maritime claim
against the cargo. None of pre-independence legislation or Arrest
Convention of cargo provides for assumption of jurisdiction of
Admiralty Court. He submits that Admiralty (Jurisdiction & Settlement
of Maritime Claims) Act, 2017 which is noticed extensively by the
Supreme Court in case of Chrisomar Corporation vs. MJR Steels
Pvt. Ltd., 2017 SCC OnLine SC 1104 confers Admiralty jurisdiction
on High Court to bear and determine the question of maritime claim
only against any vessel.
25. Learned counsel for the defendant nos.1 and 3 submits
that the action in rem cannot be maintained independently against the
cargo. The plaintiff must have maintained any action in rem against
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the vessel. An action in rem solely against the cargo can be
maintainable only for the enforcement of maritime claim and nothing
else. In support of the aforesaid submission, learned counsel placed
reliance on an unreported judgment of this Court in case of
M/s.Greenwich Maridian Logistics (India) Pvt. Ltd. vs.
M/s.Sapphire Kitchenware Pvt. Ltd and also a judgment of this
Court in case of Pacific Gulf Shipping (Singapore) Pte. Ltd. vs.
S.R.K. Chemicals Ltd. & Anr. in Notice of Motion (Lodging No.74 of
2017 in Commercial Admiralty Suit (Lodging) No.51 of 2017. He
submits that this Court has categorically held that an action in
Admiralty jurisdiction has to be against the ship or its owner. If a
shipper, receiver or consignee residing or carrying on business within
the ordinary original civil jurisdiction, against them without a vessel
being party to the suit can be filed only in the ordinary original
jurisdiction of a Civil Court. The only exception carved out by this
Court is of a maritime lien where the vessel could be arrested
irrespective of the personal liability of the owner.
26. Learned counsel for the defendant nos.1 and 3 placed
reliance on the judgment of this Court in case of Peninsula
Petroleum Ltd. vs. Bunkers on Board the Vessel m.v. Geowave
Commander & Ors., 2014 SCC OnLine Bom. 1895. He submits that
the Admiralty jurisdiction is founded on the arrest of the ship and is
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directed against the ship. Unless and until the owner of the ship is
liable for claim, the Admiralty jurisdiction of this Court cannot be
invoked. There can be no action in rem without the arrest of the ship
because i.e. the foundation of the Admiralty jurisdiction. Learned
counsel for the defendant nos.1 and 3 distinguished the judgment of
the Supreme Court in case of Videsh Sanchar Nigam Limited
(supra). He submits that even if the alleged contractual lien of the
plaintiff is enforceable against the defendant no.3, such contractual
lien does not entitle the plaintiff to invoke Admiralty jurisdiction under
the Arrest Convention. No such alleged contractual lien would fall
within the scope of maritime liens. The plaintiff thus cannot maintain
the present suit in rem against the defendant no.1 in Admiralty
jurisdiction of this Court on account of the alleged contractual lien.
27. It is submitted that there is no privity of contract between
the plaintiff and the defendant no.3 in view of the fact that the plaintiff
is not a party to the Bill of Lading. The plaintiff thus cannot seek to
enforce any clause / condition of the Bill of Lading against the
defendant no.3, including the charterparty incorporated therein. He
submits that the Bill of Lading has been issued by "Master of the M.V.
Dong Thanh - Capt.Le Phi Kianh" and bears the signature of "Agent
for and on behalf of the Master of the vessel". There is no mention of
the plaintiff in array of parties as stated on the Bill of Lading. The Bill
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of Lading is a shipping owners' Bill of Lading having been issued by
the Master of the vessel, who is an agent of the ship owner. The Bill
of Lading is a contract of carriage between the shipper and consignee
named therein with the shipowner i.e. Dong Do. The plaintiff cannot
enforce any term of the Bill of Lading contract independently. If the
plaintiff seeks to enforce any term of the Bill of Lading, it must do so
through the ship owner Dong Do. The ownership has changed from
the defendant no.2 to the defendant no.3 on issuance of the Bill of
Lading by reason of consignment in favour of the defendant no.3. The
plaintiff has no case of lien as a contractual lien does not survive a
change in the ownership.
28. Learned counsel for the defendant nos.1 and 3 relied upon
the following judgments :-
i). Wehner & Ors. vs. Dene Steam Shipping Company &
Ors.
ii). Wilston S.S. Co. Ltd. vs. Andrew Weir & Co. Ltd.
(1925) 22 LLR 521,
iii). The Starsin - (2003) 1 LLR 571 - (para 173)
29. Insofar as reliance placed on the section 1 of the Bills of
Lading Act, 1856 by the plaintiff is concerned, it is submitted by the
learned counsel for the defendant no.3 that the defendant no.3 is the
named consignee in the Bill of Lading and does not derive title by
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negotiation but on issue of Bill of Lading. Section 1 of the Bills of
Lading Act does not take argument of the plaintiff any further as the
liabilities that are associated with the Bill of Lading can only be
asserted by a party to the Bill of Lading i.e. this case the ship owner.
The section does not contemplate a situation where a non party to
the Bill of Lading can exercise any rights under the Bill of Lading.
30. Insofar as the passages from the Halsbury's Laws of
England at pages 282, 283, 315, 317, 497 and 498 of Halsbury's
Laws of England (Fifth Edition) Volume - 7 by the plaintiff is
concerned, it is submitted by the learned counsel for the defendant
no.3 that these expressions make it clear that the reason for
incorporation of a charterparty in a Shipowner's Bill of Lading is to
give the Shipowner a contractual lien for dead freight, demurrage etc.
and to enable the Shipowner to enforce the rights under the
charterparty which it could not otherwise have by reason of not being
party thereto. He submits that reliance placed by the plaintiff on this
expression from Halsbury's Laws of England is totally misplaced.
31. Insofar as reliance placed by the plaintiff on "Carver on
Bills of Lading" is concerned, it is submitted by the learned counsel
for the defendant no.3 that the said extract is based on the judgment
in case of (i) Mente & Co. Inc. vs. Isthmian SS Co.-36, F. Supp.
278, (ii) Matsushita Electric Corp of America vs. The Aegis Spirit
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(the Aegis Spirit) - 414 F. Supp. 894 (1976) and (iii) Pacol Ltd. &
Ors. vs. Trade Lines Ltd. & Ors. (1982) 1 LLR 456. He submits that
these American judgments cannot be relied upon as they are based
on American statutes though the judgment in case of Pacol Ltd. &
Ors. (supra) is by a English Court, the said judgment would also not
assist the case of the plaintiff. In his alternate submission, it is
submitted that even if it is held by this Court that the plaintiff is
entitled to exercise its right of the contractual lien against the
defendant no.3, there is no subsisting lien in the facts of this case. In
order to exercise the contractual lien, one must give notice of
exercising the lien stating the amount for the lien is exercised and
retained the possession of the goods. No notice of exercise of lien
however, has been issued by the plaintiff either to the defendant no.2
or the defendant no.3.
32. There is no pleading in the plaint that the plaintiff has
issued a notice of lien either upon the defendant no.2 and the
defendant no.3. No such alleged notice of lien is disclosed in the
compilation filed by the plaintiff. No such declaration of lien is also
claimed in the arbitral proceedings instituted by the plaintiff against
the defendant no.2. It is submitted that the contractual lien unlike
maritime is founded on the possession of the property. It is not
averred by the plaintiff that the plaintiff is in possession of the
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defendant no.1 cargo. Reliance is placed on the letter sent by the
head owner by email annexed at page 105 of the compilation. It is
submitted that the said letter clearly confirms that the head owner had
delivered the cargo to the order of receivers i.e. the defendant no.3.
The defendant no.3 had applied to the port and was allotted the port
for storage of the defendant no.1. The license charges are being
debited from the account of the defendant no.3 in respect of the said
plot. It is not the case of the plaintiff that the plaintiff is incurring any
expenses for the storage of the defendant no.1 after discharge from
the vessel. There is no reply from the plaintiff or its lawyer to the
Port's email on 26th October, 2017, wherein the port had stated that
there was no question of exercising the lien once discharged cargo
was stored at the plot allotted to the defendant no.3.
33. Learned counsel for the defendant no.3 placed reliance on
paragraphs 17.1, 17.23, 17.24 and 17.28 from the commentary on
"Gencon Clause 8" lien clause similar to the clause relied upon by the
plaintiff.
34. Insofar as the extract from paragraph 557 of Halsbury's
Laws of England (Fifth Edition) Volume - 7, page 499, relied upon by
the plaintiff relating to "duration of and loss of lien" is concerned,
learned counsel for the defendant no.3 submits that the footnote in
respect of the said paragraph relied upon by the plaintiff clearly states
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that "unless the warehouse belongs to him or is hired by him ..."
Reliance is placed on the judgment in case of Lehman Timber
(2012) 2 LLR 73.
35. It is submitted that none of the pre independence statutes
or the Arrest Conventions provide for any claim in respect of cargo.
Similarly none of the pre independence statutes or the Arrest
Conventions provide for any right to proceed in rem against the
cargo. The claim of the plaintiff for the dead freight and load port
demurrage arose under the charterparty and is against the defendant
no.2 in respect of which the plaintiff has already instituted the
arbitration against the defendant no.2 in Singapore. The plaintiff does
not have any claim against the defendant no.3 and thus is not
entitled to proceed against the defendant no.1 cargo which is a
property of the defendant no.3. The plaintiff does not comply with the
ownership test under the Arrest of Convention, 1999 for the
enforcement of the maritime claim.
36. It is submitted that the defendant no.2 ceased to be the
owner of the defendant no.1 when the Bill of Lading was issued in the
name of the defendant no.3 as the consignee. The defendant no.2
was liable for the plaintiff's claim and was the owner of the defendant
no.1 when the plaintiff's alleged claim for the dead freight and
demurrage at load port arose. Since the defendant no.2 is no more
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the owner of the defendant no.1 when the arrest is sought, even if the
plaintiff has maritime claim against the defendant no.1, such claim
cannot be enforced against the defendant no.1 since there has been
a change in the ownership of the defendant no.1.
37. Insofar as the alleged statutory lien claimed by the plaintiff
under section 60 of the Major Port Trusts Act, 1963 is concerned, it is
submitted by the learned counsel for the defendant no.3 that section
60 of the Major Port Trusts Act, 1963 does not create any statutory
lien in favour of the plaintiff. The said provision only provides for the
mode for exercise of pre existing lien by the agent or the shipowner.
A notice under section 60 of the Major Port Trusts Act must be given
by the Master or the owner of the vessel. The plaintiff could not have
issued any notice of claiming statutory lien under such provision as
the plaintiff is admittedly neither the Master nor the owner of the
vessel. The defendant no.1 cargo has been discharged into the
custody of the defendant no.3 and stored at the plot of the defendant
no.3. The port has already denied the claim of any statutory claim of
the plaintiff under the provisions of the Major Port Trusts Act.
38. Learned counsel for the defendant no.3 distinguished the
judgment in case of Phoenix Bulk Carriers Ltd. (supra) relied upon
by the plaintiff on the ground that the said Canadian judgment is in
backdrop of a statutory provision under Canadian law which permits
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cargo arrest. No such provisions exists in any of the legislations nor
do any International conventions contemplate arrest of cargo. He
submits that this Court in case of Pacific Gulf Shipping (Singapore)
Pte. Ltd. (supra) has held that such Canadian law cannot be
imported as a part and parcel of Indian law to permit cargo arrest.
39. Insofar as the judgment delivered by the High Court of
South Africa in case of M.V. New Market (supra) relied upon by the
plaintiff is concerned,it is submitted by the learned counsel for the
defendant no.3 that in the facts of that case, the head owner's and
the owner's contractual lien over the cargo was successfully
exercised on account of the Bill of Lading being the shipowner's Bill of
Lading. The Bill of Lading being issued on behalf of the Master of
vessel, functioned as contract of carriage between the head owner
and the cargo interests. In this case, the plaintiff being a charterer
seeking to enforce the alleged contractual lien against the defendant
no.1 under the shipowner's Bill of Lading on the basis of incorporation
of the charterparty to which the plaintiff is a party. It is submitted that
the said judgment of the High Court of South Africa in case of M.V.
New Market (supra) thus would not assist the case of the plaintiff.
40. Insofar as reliance placed on passages from "Admiralty
and Maritime Law - Thomas J. Schoenbaum" by the plaintiff is
concerned, it is submitted by the learned counsel for the defendant
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no.3 that the said extract deals with the maritime garnishment and
attachment and action pursuant to statutory regulations of American
Law, which is at variance with the common law. The statutes have
no similar provisions. Insofar as the allegations of the plaintiff about
the alleged financial condition of the defendant no.3 levelled across
the bar and in the written submissions is concerned, it is submitted by
the learned counsel for the defendant no.3 that such allegations
cannot be considered in the absence of any submission in the plaint.
The paper cutting produced by the plaintiff of the year 2016 have no
bearing on the present financial condition of the defendant no.3. He
submits that similar allegations made in respect of the contract
between the defendant no.2 and the defendant no.3 that the said
transaction is not a genuine transaction is concerned, it is submitted
that the plaintiff has not raised any such allegations in the plaint. The
defendant no.2 has obtained for freight payable rather than the freight
pre-paid bill which is merely a commercial decision of the defendant
no.2 and thus no inference can be drawn based on such commercial
decision that the transaction between the defendant no.2 and the
defendant no.3 was not a genuine transaction or was full of
discrepancies.
41. After conclusion of arguments of both the parties on 6th
December, 2017, learned counsel for the defendant no.3 filed an
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additional submissions placing copies of certain emails dated 5th
December, 2017 and 28th November, 2017 between the shipowner
and the plaintiff respectively and has contended that the email dated
29th November, 2017 sent by the plaintiff would clearly establish that it
does not have the right to exercise any lien over the cargo and it is for
that reason that it has requested the shipowner to exercise lien for
the plaintiff. It is contended in the said additional submission that
there is no privity of contract between the plaintiff and the defendant
no.3 is established in view of the email dated 28 th November, 2017
sent by the plaintiff. In response to the said additional submission
made by the defendant no.3, the plaintiff also filed further written
submissions on 8th December, 2017 and explained the email dated
28th November, 2017 and various other emails exchanged between
the plaintiff and others.
REASONS AND CONCLUSIONS :
42. The short question that arises for consideration of this
Court in this Judge's Order is whether the plaintiff can apply for arrest
of the defendant no.1 cargo in respect of the plaintiff's alleged claims
arising out of the claim for demurrage as and by way of an action in
rem, though the plaintiff was not a party to the Bill of Lading which
was between the defendant no.2 and the defendant no.3.
43. The question also arose in this matter is whether there
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was privity of contract between the plaintiff and the defendant no.3 for
seeking arrest of the defendant no.1 cargo or otherwise and whether
the Admiralty jurisdiction of this Court can be invoked only in an
action in rem against the vessel or also action against the cargo and
only when the claim against the cargo is secured by the maritime
claim. It is not in dispute that the plaintiff is not a party to the Bill of
Lading dated 23rd August, 2017 between the defendant no.2 as the
shipowner and the defendant no.3 as the consignee. The case of the
plaintiff is that by a voyage chargerparty dated 2nd June, 2017, the
plaintiff had chartered the vessel m.v. DONG TANH to the defendant
no.2 for carriage of the defendant no.1 cargo. The plaintiff in the
plaint has claimed an amount of US $ 282,007.76 under the
charterparty.
44. It is the case of the plaintiff that the said amount was
initially due from the defendant no.2. However, since the defendant
no.3 has accepted the Bill of Lading with the knowledge of the
alleged encumbrances of the plaintiff and in view of the fact that the
Bill of Lading has alleged to have incorporated the terms of the
charterparty dated 2nd June, 2017, the defendant no.3 become liable
to the claims of the plaintiff. It is also the claim of the plaintiff that the
defendant no.1 cargo is thus an offending cargo in respect of the
alleged maritime claim of the plaintiff thus based on the said Bill of
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Lading allegedly incorporating all the terms of the charterparty dated
2nd June, 2017.
45. A perusal of the documents produced by the defendant
no.3 on record for consideration of this Judge's Order indicates that
pursuant to an import purchase order, the defendant no.3 has
purchased limestone from the defendant no.2. The defendant no.2
had shipped the defendant cargo by vessel. The agent on behalf of
the master of the vessel thereafter issued a Bill of Leading dated 23 rd
August, 2017 i.e. by Dong Do Marine time JSC, head owner of the
vessel. A perusal of the letter dated 26th October, 2017 which is
forming part of the record, which was addressed by the solicitor's of
the plaintiff indicates that the plaintiff has clearly admitted that the
defendant no.3 was the holder of the Bill of Lading. The defendant
no.3 has also placed on record a copy of the Letter of Credit, Bill of
Entry for Home Consumption and also Customs E-Receipts to the
affidavit in reply filed by the defendant nos.1 and 3. A perusal of the
record further indicates that the claim of the plaintiff is in respect of
the dead freight, load port demurrage, under water cleaning of the
vessel and the amount on account of a hire price at which NGO had
to be arranged on account of the long stay of the vessel.
46. It is not in dispute that the defendant no.3 thereafter
applied for a license plot from Calcutta Port Trust for storing the
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defendant no.1 cargo at the Haldia Dock Complex. The record further
indicates that the defendant no.3 is in exclusive possession of the
said plot for quite some time after discharge of the defendant no.1
cargo from the vessel m.v. DONG TANH and that the said Haldia
Dock Complex has been recovering the license fees for the said plot
from the defendant no.3. The said port has acknowledged these facts
in the correspondence.
47. The plaintiff however, has made a claim based on the
alleged contractual and the statutory lien against the defendant no.1
cargo. It is clear from the record that the claims against the cargo
made by the plaintiff are not connected with any other vessel and
thus the claim of the plaintiff cannot be considered as an action in
rem against the vessel. In my view, since there is no maritime claim
made by the plaintiff against the vessel, the Admiralty jurisdiction of
this Court against the defendant no.1 cargo cannot be invoked for its
purported maritime claim against the cargo.
48. The Supreme Court recently in case of Chrisomar
Corporation vs. MJR Steels Pvt. Ltd., (2017) SCC OnLine SC
1104 has construed the provisions of The Admiralty (Jurisdiction and
Settlement of Maritime Claims) Act, 2017 and has held that the
Admiralty jurisdiction of a High Court is to hear and determine any
question on a maritime claim only against any vessel.
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49. This Court in case of M/s.Greenwich Maridian Logistics
(India) Pvt. Ltd. (supra) has considered the issue whether an
Admiralty Court can entertain a suit filed by a shipowner or carrier
against a consignee without a vessel being a party to the suit. This
Court held that an action in Admiralty jurisdiction has to be against
the ship or its owner. It is held that the jurisdiction of the Admiralty
court is specific and if any controversy does not arise within specific
jurisdiction of the Admiralty Court, the Admiralty Court cannot
entertain any such situation like a Court of Ordinary Original Civil
Jurisdiction. This Court in the said judgment also considered the
judgment of the Supreme Court in case of M.V. Elisabeth vs.
Harwan Investment & Trading (P) Ltd., 1993, Supp. (2) SCC 433
and also the judgment of the Supreme Court in case of Liverpool &
London S.P. & I Association Ltd. (supra) and held that the action
in Admiralty jurisdiction has to be against the ship or its owner. It is
also held that since the shipowner, receiver, consignee would be
residing or carrying on business within the ordinary original civil
jurisdiction, action against them without the vessel being a party to
the suit can be filed only in the ordinary original civil jurisdiction of the
Civil Court. It is an admitted position that this suit filed by the plaintiff
is not invoking the ordinary original civil jurisdiction of this Court but
has filed invoking the Admiralty jurisdiction. It is also not in dispute
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that the vessel has not been joined as a party defendant to this suit
and no relief against the said vessel has been claimed in the suit.
50. This Court in the said judgment carved out an exception in
case of maritime lien when vessel could be arrested irrespective of
the personal liability of the owner. The arrest of the vessel is sine qua
non for attracting an Admiralty jurisdiction of this Court. In my view
the said judgment of this Court in case of M/s.Greenwich Maridian
Logistics (India) Pvt. Ltd. (supra) which is delivered after adverting
to the judgment of the Supreme Court in case of M.V. Elisabeth
(supra) and in case of Liverpool & London S.P. & I Association
Ltd. (supra) squarely apply to the facts of this case. I am respectfully
bound by the said judgments.
51. In my view since the claim of the plaintiff is not a maritime
claim and the plaintiff does not have any maritime lien against the
defendant no.1 and the defendant no.3, the plaintiff cannot invoke an
Admiralty jurisdiction of this Court. In my view, learned counsel for the
defendant no.3 is right in his submission that all maritime liens are
maritime claims but all maritime claims are not maritime liens.
52. Insofar the judgment of this Court in case of Pacific Gulf
Shipping (Singapore) Pte. Ltd. (supra) delivered on 1st September,
2017 is concerned, the plaintiff had filed the notice of motion in
Commercial Admiralty Suit inter-alia praying for the reliefs in respect
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of certain quantity of salt kept as a security and lying at an open yard
at Kutch in Gujarat in lieu of arrested cargo laden / to be laden on
board the vessel and for damages towards the expenses incurred by
the applicant for store of the goods. The notice of motion was filed on
the basis that the arrest order obtained in respect of the cargo, for
release of which security was kept was wrongful and was obtained
by an ex-parte order passed by this Court. The defendant no.1 had
given a security for release of the said cargo and thereafter had
applied for release of the said security by filing such notice of motion.
53. This Court in the said judgment held that the arrest of
cargo in connection with the claim unconnected with it would be
the matter of substantive law and not just procedural issue. It is the
matter pertaining to the jurisdiction. It must be shown that the
Admiralty Court does have such jurisdiction either with reference to
a statute or authority of deciding a case before Court. This Court
accordingly held that the arrest of cargo could be continued for
some more time subject to the plaintiff securing the defendant for the
costs resulting thereby. In my view, the judgment in case of Pacific
Gulf Shipping (Singapore) Pte. Ltd. (supra) does not take a
different view and supports the case of the defendants and not the
plaintiff.
54. Insofar as the judgment of the Calcutta High Court in case
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of Liberty Commodities Ltd. (supra) is concerned, the suit was filed
for arrest of the vessel. There was no issue as to whether the cargo
should be arrested or not. The said judgment thus would not assist
the case of the plaintiff.
55. This Court in case of Peninsula Petroleum Ltd. (supra)
had considered the claims made by the plaintiff invoking Admiralty
jurisdiction for arrest of bunkers on board a vessel alleging that the
term "property" in Rule 946 of the Bombay High Court (Original Side)
Rules, 1980 and in the Letters Patent of 1823 and 1865 had
permitted such arrest. This Court in the said judgment held that even
though the plaintiff had maritime claim for supply of accessories for
which a vessel could be arrested, bunkers simplicitor could not be
arrested when there was no claim against the vessel and
independent of the vessel. It is not in dispute that in this case also
the plaintiff has not made any claim against the vessel but has
purported to have made claim against the defendant no.1 cargo
independent of the claim against the vessel. In the said judgment in
case of Peninsula Petroleum Ltd. (supra), this Court held that the
arrest of cargo or freight can be only to the limited extent of the
amount payable on the cargo or freight to the owner and when a
person who has a claim against the owner of the ship brings an
action in rem, he could also apply for and obtain arrest of the cargo
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on board. It is held that the arrest of cargo is only permissible in aid of
a claim against the owner of the vessel which is commenced in rem
by arrest of the vessel.
56. This Court in case of M/s.Greenwich Maridian Logistics
(India) Pvt. Ltd. (supra) on the other hand after adverting to the
judgment of the Supreme Court in case of M.V. Elisabeth (supra)
and the judgment delivered by this Court in case of Best Food
International Pvt. Ltd. vs. Navbharat International Ltd. (2010)
SCC OnLine Bom. 445 has categorically held that the Admiralty
jurisdiction of the High Court is founded on the arrest of the ship and
is directed against the ship. Unless and until the owner of the ship is
liable for the claim, Admiralty jurisdiction of this Court cannot be
invoked. There can be no action in rem without arrest of the vessel
because that is the foundation of the Admiralty jurisdiction.
57. Insofar as reliance placed by the plaintiff on the passage
from "Admiralty Jurisdiction & Practice by Nigel Meeson" is
concerned, a perusal of the said passage clearly indicates that the
said author had referred to the provisions in English Law after
interpretation of the Supreme Court Act, 1981 which provisions are
not binding on the parties and the Courts in India. Be that as it may,
even in England, the arrest of cargo is permissible only if it is on the
board a vessel and if there is a maritime lien attached. In my view,
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reliance thus placed by the plaintiff on those passages would not
assist the case of the plaintiff in any manner whatsoever.
58. Insofar as the submission of the learned counsel for the
plaintiff that the plaintiff has a contractual lien under clause 8 of the
charterparty dated 2nd June, 2017 between itself and the defendant
no.2 is concerned, the copies of e-mail exchanged between the
plaintiff and the defendant no.2 produced on record by the
defendants referred in the e-mail dated 5th December, 2017 which
were received by the defendant no.3 from the solicitors of the ship
owner who had given vessel and chartered to the plaintiff and further
written submissions filed by the plaintiff clearly indicates that the
plaintiff in the said e-mail sent to the ship owner has admitted that the
plaintiff did not have authority or right to exercise any contractual lien
on the cargo and thus had called upon the owner to exercise lien.
The plaintiff had also threatened the ship owner of arrest in case the
ship owner not exercising the lien on the cargo. The demand of the
plaintiff was specifically rejected by the ship owners through its
solicitor's e-mail date 5th December, 2017 clearly admitting that the
ship owner could not exercise the lien over the cargo as it no longer
had any control over the cargo. The ship owner further informed the
plaintiff that the ship owner was not entitled to exercise any lien over
the cargo, as there was no outstanding amount due to the owner
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under the demurrage or Bill of Lading and thus there was no basis to
wrongfully detain the cargo.
59. Though the plaintiff filed further written submissions, the
plaintiff could not dispute that the plaintiff had not contended that the
plaintiff did have authority or right to exercise any lien on the cargo. In
view of such stand already taken by the plaintiff in its e-mail
addressed to the vessel owner thereby admitting that the plaintiff did
not have any authority or right to exercise any lien on the defendant
no.1 cargo and had called upon the vessel owner to exercise lien, the
first submission of the plaintiff that the plaintiff had a contractual lien
on the defendant no.1 cargo and has a claim against the defendant
no.3 based on the Bill of Lading and charterparty does not survive
and is accordingly rejected on this ground itself. The arguments
urged by the learned counsel for the plaintiff are contrary to the
admitted position in the said e-mail exchanged between the plaintiff
and the vessel owner. The stand taken by the vessel owner clearly
supports the case of the defendant no.3 that the vessel owner could
not exercise lien over the cargo, as they no longer have control over
the cargo and also on the ground that there was no outstanding
amount due to the vessel owner under the charterparty or bill of
Lading.
60. Be that as it may, the plaintiff being not a party to the Bill of
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Lading cannot claim any alleged contractual lien against the
defendant no.1 cargo of any nature whatsoever. The defendant no.2
ceased to be the owner of the defendant no.1 cargo in view of the
admitted fact that the Bill of Lading was issued in the name of the
defendant no.3 as the consignee. If there could be any claim of the
plaintiff, the same could be against the defendant no.2 and not
against the defendant no.3 or the defendant no.1 cargo. It is not in
dispute that the plaintiff has already filed the arbitration proceedings
against the defendant no.2. In my view, since the defendant no.2 is
not the owner of the defendant no.1 cargo when the arrest is sought
even if the plaintiff's claim can be considered as maritime claim which
is not, such claim cannot be enforced against the defendant no.1 in
view of the change of the ownership in respect of the defendant no.1
by the defendant no.2 in favour of the defendant no.3.
61. Insofar as reliance placed by the plaintiff on section 1 of
the Bills of Lading Act, 1856 is concerned, it is an admitted position
that the defendant no.3 is the named consignee in the Bill of Lading
and does not derive title by negotiation but on the issue of Bill of
Lading. The liabilities arising out of the said Bill of Lading can only be
asserted by the party to the Bill of Lading under the provisions of law
and more particular in the provisions of Bills of Lading Act, 1856
which would not permit a third party to the Bill of Lading to exercise
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any rights under the Bill of Lading. In my view, reliance placed on
section 1 of the Bill of Ladings Act, 1856 by the plaintiff thus would
not assist the case of the plaintiff and is totally misplaced.
62. Insofar as the passage from Halsbury's Laws of England
relied upon by the learned counsel for the plaintiff is concerned, I am
inclined to accept the submission made by the learned counsel for
the defendant no.3 that the reasons for incorporation of a charterparty
in the ship owner's Bill of Lading is to give the ship owner a
contractual lien for the dead freight lien etc. to enable the ship owner
to enforce the rights under the charterparty which it could not
otherwise have exercised by reason of not being a party thereto. In
my view, the passage from Halsbury's Laws of England relied upon
by the plaintiff thus would not forward the case of the plaintiff further
and thus reliance placed thereon by the plaintiff is misplaced.
63. Insofar as reliance placed by the plaintiff on a passage
from "Carver on Bills of Lading" is concerned, a perusal of the said
passage indicates that the same is based on three American
judgments and one judgment delivered by the English Court. Those
judgments cannot be relied upon by the plaintiff as the same solely
are based on the American and English statutes having different
provisions. Be that as it may, since there is no subsisting lien against
the defendant no.3 by the plaintiff and in view of the plaintiff not
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having given any notice of exercising the alleged lien stating the
amount for lien and for retaining the possession of the defendant no.1
cargo, the claim of the plaintiff of the contractual lien is totally
misplaced. The plaintiff did not make any such claim in the arbitral
proceedings instituted by the plaintiff against the defendant no.2. The
plaintiff has not even averred that the plaintiff is in possession of the
defendant no.1 cargo nor has even prima-facie established its alleged
possession in respect thereof.
64. A perusal of the e-mail sent by the head owner annexed at
page no.105 of the compilation produced by the plaintiff clearly
indicates that it is confirmed by the head owner that the head owner
had delivered the cargo to the owner of the receiver i.e. the
defendant no.3. The defendant no.3 had applied to port for allotment
of the land for storage of the said cargo and has been paying the
license charges in respect of the said plot to the said port. The
plaintiff has not produced any proof before this Court and has not
even contended that the plaintiff has been incurring any expenses for
storage of the defendant no.1 cargo after discharge from the vessel.
The plaintiff has also not sent any reply to the e-mail dated 26 th
October, 2017 sent by the port rejecting the claim of the plaintiff for
lien on the defendant no.1 cargo.
65. Insofar as the passage from Halsbury's Laws of England
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relating to "duration of and loss of lien" relied upon by the plaintiff is
concerned, the said passage also does not apply to the facts of this
case and would not assist the case of the plaintiff. In my view, none
of the of the pre independence statutes or the Arrest Conventions
provide for any claim in respect of cargo or provide for any right to
proceed in rem against the cargo. The plaintiff does not have any
claim against the defendant no.3 and thus is not entitled to proceed
against the defendant no.1 which is owned by the defendant no.3.
66. Insofar as the alleged statutory lien claimed by the plaintiff
under section 60 of the Major Port Trusts Act, 1963 is concerned, the
said provision only provided for mode or exercise of pre-existing lien
of an agent or the ship owner. A notice under section 60 of the Major
Port Trusts Act, 1963 has to be issued by the master or the owner of
the vessel. The plaintiff is neither the master nor the owner of the
vessel. A perusal of the record clearly indicates that the defendant
no.1 cargo has been discharged by the defendant no.2 into the
custody of the defendant no.3 and is in possession of the defendant
no.3. The Port has already rejected the claim of the statutory lien of
the plaintiff under the provisions of the Major Port Trusts Act, 1963. In
my view, the plaintiff thus could not have issued any notice claiming
any statutory lien under section 60 of the Major Port Trusts Act, 1963
or under any other provisions of law. The claim of statutory lien is
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also is thus not maintainable and is rejected.
67. Insofar as the judgment of the Canadian Court in case of
Phoenix Bulk Carriers Limited (supra) relied upon by the plaintiff is
concerned, in my view, the said Canadian judgment is not applicable
to the facts of this case and is clearly distinguishable in view of the
fact that the statutory provisions considered by the Canadian Court
under the Canadian Law specifically permitted arrest of the cargo in
isolation, whereas no such provision exists in any of the Legislation
applicable to the facts in this case in India nor any international
convention contemplated arrest of the cargo simplicitor. This Court
has already considered this issue and has held that the Canadian
judgment cannot rely upon in India where the Admiralty jurisdiction is
invoked and the claim is for arrest of cargo.
68. Insofar as the judgment of the High Court of South Africa
in case of M.V. New Market (supra) is concerned, in that case the
Bill of Lading was issued on behalf of the Master of vessel who
functioned as a contract of carriage between the head owner and
cargo interests. However in the facts of this case, the plaintiff claims
to be the charterer and seeks to enforce the alleged contractual lien
against the defendant no.1 under the Bill of Lading of the ship owner
on the basis of the alleged incorporation of the charterparty to the
plaintiff as a party. In my view, the judgment of the High Court of
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South Africa in case of M.V. New Market (supra) thus would not even
remotely apply to the facts of this case and is clearly distinguishable
in the facts of this case.
69. Insofar as passage from "Admiralty And Maritime Law by
Thomas J. Schoenbaum" relied upon by the learned counsel for the
plaintiff is concerned, the learned author has made those comments
based on the statutory regulations of American Law which regulations
are different and are at variance with the common law. The statutes
that are applicable to the matters governing the Admiralty jurisdiction
in India are totally different. The said passage from Admiralty and
Maritime law thus would not assist the case of the plaintiff.
70. Insofar as the alleged precarious financial condition of the
defendant no.3 alleged by the plaintiff based on the paper cutting in
the year 2016 is concerned, I am inclined to accept the submissions
made by the defendant no.3 that the said paper cutting would not be
the conclusive proof. The plaintiff has not made any such averments
in the plaint about the alleged precarious financial condition of the
defendant no.3.
71. I am thus not inclined to accept the submission of the
plaintiff that the defendant no.1 is an offending cargo in respect of the
alleged maritime claim of the plaintiff or that on that ground the
plaintiff is entitled to seek arrest of the defendant no.1 to secure its
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claim. There is no substance in the submission made by the learned
counsel for the plaintiff that the defendant no.3 has admitted the claim
of the plaintiff. The claim of the plaintiff that the Bill of Lading
incorporated the charterparty is also without any basis for the
purpose of making the claim against the defendant no.3 or otherwise.
72. Insofar as the submission of the learned counsel for the
plaintiff that the price declared to the Customs by the defendant no.3
under the said Bill of Lading is less than the contractual price which
would allegedly indicate that the defendant no.3 had negotiated better
price and had taken the benefits of the expenses of the alleged
encumbrances of the plaintiff on the defendant no.1 is without any
basis. The allegations made by the plaintiff is even otherwise of no
relevance and not even prima-facie demonstrated to be correct.
There is no merit in the submissions made by the learned counsel for
the plaintiff that the defendant no.3 was aware of any alleged
encumbrances or lien of the plaintiff on the defendant no.1 cargo
before making any payment for it to the defendant no.2.
73. Insofar as the judgment of the Supreme Court in case of
the Videsh Sanchar Nigam Limited (supra) relied upon by the
learned counsel for the plaintiff is concerned, in my view even if the
alleged contractual lien of the plaintiff is enforceable against the
defendant no.3, such contractual lien does not entitle the plaintiff to
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invoke an Admiralty jurisdiction under the arrest convention. In my
view, such alleged contractual lien of the plaintiff does not fall within
the scope of the maritime lien. Admittedly the plaintiff has not invoked
the jurisdiction of the ordinary original civil jurisdiction of the High
Court but has invoked Admiralty jurisdiction to enforce such alleged
contractual lien, which cannot be invoked. The entire claim of the
plaintiff is thus prima-facie not maintainable in this Court exercising
Admiralty jurisdiction.
74. For the reasons recorded aforesaid, I am of the view that
the plaintiff has not made out any case for arrest of the defendant
no.1 cargo. The judge's order thus filed by the plaintiff is thoroughly
misconceived.
75. I therefore, pass the following order :-
a). Judge's Order No.253 of 2017 is dismissed with costs
quantified at Rs.50,000/- which shall be paid by the plaintiff to the
defendant no.3 within two weeks from today.
(R.D. DHANUKA, J.)
76. Mr.Ashwin Shanker, learned counsel for the plaintiff seeks
stay of the operation of this order, which is vehemently opposed by
Mr.Kamat, learned counsel for the defendant no.1 and 3. Since there
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is no ad-interim stay granted by this Court, the question of granting
any stay does not arise. The application for stay is accordingly
rejected.
(R.D. DHANUKA, J.)
