Bombay High Court

Spark Experience Llc vs Sale Proceeds Of Mv Karnika And 2 ... on 25 July, 2022

Bench: N. J. Jamadar

                                                                      30-COMAS-70-21.DOC

                                                                          Sayali Upasani
VISHAL
SUBHASH
                           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
PAREKAR
Digitally signed by
VISHAL SUBHASH
PAREKAR
                           ADMIRALTY AND VICE ADMIRALTY JURISDICTION
Date: 2022.07.27
19:24:19 +0530




                                     IN ITS COMMERCIAL DIVISION

                              INTERIM APPLICATION (L) NO. 19837 OF 2022
                                                IN
                             COMMERCIAL ADMIRALTY SUIT NO. 70 OF 2021

                      Spark Experience, LLC.                              ...Applicant
                      In the matter between
                      Spark Experience, LLC                                ... Plaintiff
                                        Versus
                      Sale Proceeds of M.V. Karnika & Anr.            ...Defendants

                      Mr. Prathamesh Kamat, Arshi Cardl Hemrom, Shantanu Joshi
                            i/b Harsh Pratap for Plaintiff.


                                                 CORAM:      N. J. JAMADAR, J.

                                                 DATED :     25th JULY, 2022
                      ORDER:-

1. This Commercial Admiralty Suit is instituted for recovery

of a sum of US$2,278,648.58 along with further interest

against the sale proceeds of the Vessel MV KARNIKA and its

owner Jalesh Cruises Mauritius Ltd, the Defendant No.2, ("the

Jalesh") and its beneficial owner and/or commercial operator

Zen Cruises Private Limited, the Defendant No. 3.

2. The material averments in the plaint can be summarized

as under:

30-COMAS-70-21.DOC

(a) The Plaintiff is a company incorporated under

the laws of United States of America. The Plaintiff is

engaged in business, inter alia, of providing client and

project management deliverables and workstreams for

entertainment applications in passenger cruise ships.

MV KARNIKA the Vessel of which the "Jalesh -

Defendant No. 2" was the registered owner and "Zen

Cruises Private Limited, the Defendant No.3", was the

beneficial owner and/or commercial operator, was

ordered to be sold by this Court by an order dated 7 th

October, 2020 in Commercial Admiralty Suit (L) No.

3579 of 2020. The sale proceeds of the Vessel

(Defendant No.1) are presently lying with the

Prothonotary and Senior Master of this Court.

(b) On 5th November, 2018, the Plaintiff entered into

a Service Agreement with Defendant No. 3 for

providing services to the Vessel MV KARNIKA. The said

agreement was entered into by Defendant No. 3 in the

capacity of beneficial owner and/or commercial

operator of the said Vessel, acting for and on behalf of

the Defendant No.2. Subsequently, another agreement

came to be executed between the Plaintiff and

30-COMAS-70-21.DOC

Defendant No.2. Under the terms of the Service

Agreement, the Plaintiff provided various services to

the Vessel, including that of oversight, development,

logistics, production and entertainment, on the

instructions and orders of Defendant Nos.2 and 3.

Under the terms of the agreements, Defendant Nos.2

and 3 were obligated to pay;

(a) Compensation of US$44,99,983.41 in terms of

the Funding Schedule provided in the

Agreements and,

(b) Any additional expenses if any incurred by the

Plaintiff to provide the services rendered under

the Agreements.

3. It was agreed between the parties that time was of the

essence with regard to timely release of funds and the

defendant would pay undisputed invoice amounts within 30

days after the date listed on the corresponding invoice. Any

default in payment would entail to charge of interest at the rate

of 1.5% per month on any overdue amount.

4. The Plaintiff avers that the Defendants had paid

US$30,00,000 out of the compensation amount of

US$44,99,983.41. A principal sum of US$ 14,99,983.41

30-COMAS-70-21.DOC

remained outstanding. The Plaintiff raised invoices dated 1st

June,2019 and 1st July, 2019 for various amounts. However, the

amount remained outstanding beyond 30 days of the respective

dates of invoices. The Plaintiff is thus entitled to claim interest

at the rate of 1.5% per month on the outstanding amount of the

invoices.

5. The Plaintiff claims to have provided further services and

raised invoices during the period April 2019 to October 2019

aggregating to US$442,227.01 (2nd set of invoices). In addition,

during the period October 2019 to March 2020, for the services

rendered to the Vessel, the Plaintiff claimed to have raised

invoices aggregating to a sum of US$241,000 (3 rd set of

invoices).

6. The Plaintiff asserts that the Plaintiff repetitively called

upon the defendants to clear the invoices. Despite

acknowledging the liability on several occasions, the Defendants

committed default in payment of the outstanding amount. As of

31st August, 2021, a sum of US$2,278,648.58, inclusive of

interest, remained outstanding. The Plaintiff's claim is a

maritime claim and, thus the Plaintiff is entitled to proceed in

rem against the sale proceeds.

30-COMAS-70-21.DOC

7. The Plaintiff has taken out this interim application

asserting that the liability is admitted and there is no real

defence to the Plaintiff's claim. Hence, the Plaintiff is entitled to

a summary judgment under order XIII-A of the Code of Civil

Procedure, 1908 as amended by the Commercial Courts Act,

2015.

8. I have heard Mr. Prathmesh Kamat, the learned Counsel

for the applicant - Plaintiff. I have also perused the averments

in the plaint, documents annexed thereto, the averments in the

application and the documents annexed with the application.

9. At the outset, Mr. Kamat asserted that Defendant Nos.2

and 3 have not entered appearances despite service of writ of

summons. Mr. Kamat invited the attention of the Court to the

affidavits of service of writ of summons on Defendant Nos. 2

and 3, filed along with interim application.

10. It seems that the writ of summons has been duly served

on Defendant Nos. 2 and 3. None seems to have entered

appearance on behalf of the Defendant Nos. 2 and 3.

11. The claim of the Plaintiff that it had entered into the

Service Agreement with Defendant Nos. 2 and 3 finds support

in the Service Agreement dated 5th November, 2018. Under

Clause - 3 of the said agreement subject to all terms and

30-COMAS-70-21.DOC

conditions, Defendant No. 3 had agreed to pay to the Plaintiff

US$ 44,99,983.41 in accordance with the terms and conditions

enumerated in the funding schedule. Clause-4 provided that

the Plaintiff was to provide the services and comply with

obligations as set forth in the said agreement, including with

respect to the provisions of Exh. A and B thereof. Exh. A and

defined the scope of work and funding schedule, respectively.

The claim of the Plaintiff that it had provided services and

raised the invoices, find support in the copies of the invoices at

Exh. F to Q. There are documents which evidence the demand

of the amount covered by the invoices.

12. In the communication dated 3rd June, 2019, addressed on

behalf of the defendant it was acknowledged that all the

invoices raised by the Plaintiff would be paid by 17th June. The

Plaintiff had relied upon another communication dated 27 th

December, 2019 (Exh. FF) which reads as under-

Hi Charly and Ronnie Here is an updated. Same I gabe all Business Partners.

We are working around the clock to get this damm funds relieved. We all know the funds will come to us a 100% and will be released to us. Our challenge is we don't know if it will happen tonight, tomorrow on Monday or end of next week. Instead that promising you a date and want you to be aware and ensure you the fund will come but I'm not able to promise you

30-COMAS-70-21.DOC

it will hit our and or your account before the 31st.

I also have informed Carnival of the same. However, as soon the funds will be in our Mauritius account we will ensure that all bills will be right away settled. I will meet with Swiss Aplha to participate in all meetings to be directly involved in getting these funds finally released as they have provided all paper work necessary to get them release...

13. In the other communications, emanating from Defendant

Nos. 2 and 3, no dispute seems to have been raised about the

liability to pay the amount covered by the invoices. In the

circumstances, the Plaintiff's claim seems to be covered by

Section 4 (1)(L) of the Admiralty (Jurisdiction and Settlement

Maritime Claims) Act, 2017.

14. As the Defendants have not entered appearance despite

the service of the writ of summons and in the backdrop of the

material on record, in the form of the Services Agreements,

invoices, communications demanding the unpaid amount

covered by those invoices and the admission of the liability to

clear those invoices, I am impelled to hold that there does not

appear any realistic defence to the claim of the Plaintiff. Nor

there appears any other impediment in allowing the suit before

recording oral evidence. The Plaintiff is, thus, entitled to a

summary judgment.

30-COMAS-70-21.DOC

15. Hence, the following order-

:ORDER:

(i) There shall be a summary judgment and

decree in favour of the Plaintiff and against the sale

and 3, jointly and severally, in the sum of

US$ 2,278,648.58 along with further interest at the

rate of 12% per-annum on the invoice amount of

US$2,230,231.31 from the date of the suit till

payment or realization.