Credit Suisse Ag vs M.V. Sam Hawk
2021 Latest Caselaw 14801 Guj

       C/AS/17/2020                                         IA ORDER DATED: 22/09/2021




           I00N THE HIGH COURT OF GUJARAT AT AHMEDABAD
     MISC. CIVIL APPLICATION (FOR WITHDRAWAL/DISBURSEMENT OF
                         AMOUNT) NO. 2 of 2021
                   In R/ADMIRALTY SUIT NO. 17 of 2020
==========================================================

CREDIT SUISSE AG Versus M.V. SAM HAWK ========================================================== Appearance:

for the PETITIONER(s) No. MR SN SOPARKAR SR. ADVOCATE, MR HARSH N PAREKH for the PETITIONER(s) No. DHRUV TOLIYA for the RESPONDENT(s) No. ==========================================================

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

Date : 22/09/2021

IA ORDER

1. Heard learned Senior Advocate Mr. S.N. Soparkar assisted by learned Advocate Mr. Harsh N. Parekh for the applicant and learned Advocate Mr. Manav Mehta for Respondent Nos. 2 to 5.

2. By this application the applicant-original plaintiff in Admiralty Suit No. 17 of 2020 has prayed for the following reliefs:

"25. ...

a) YOUR LORDSHIPS be pleased to determine the order determining the priority of claims against the vessel MV Sam Hawk and / or its sale proceeds, in accordance with the provisions in the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 and declaring that the Applicant in view of the judgment dated 4 th February 2021 holding the Applicant to be the registered mortgages of the Defendant Vessel in terms of Section 10 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 to have first

C/AS/17/2020 IA ORDER DATED: 22/09/2021

priority among all Claimants (i.e. Opponents 2 to 5) of the vessel MV Sam Hawk.

b) YOUR LORDSHIPS be pleased to order and direct in favour of the Applicant that the decreed amount of USD 24,143,731.38 in terms with the judgment dated 4 th February 2021 be paid out / disbursed to the Applicant from the sale proceeds of the Defendant Vessel laying deposited in this Hon'ble Court including any interest that may have accrued thereon till date;

c) YOUR LORDSHIPS be pleased to order interim disbursement / payment to the applicant pursuant to the judgment dated 4th February 2021 leaving aside a sum of USD 822,528.51 from the sale proceeds lying with this Hon'ble Court which to be disbursed after the determination of priority by the Hon'ble Court under Section 10 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017;

d) ..."

3. It is the case of the applicant-original plaintiff who had filed Admiralty Suit No. 17 of 2020 is a foreign bank incorporated under the laws of Switzerland and with its registered address and place of business as mentioned in the cause-title.

3.1 The Opponent No.1, i.e. the vessel, was a Bulk Carrier flying the foreign flag of Liberia identified by its IMO Number as mentioned in the cause title above.

3.2 Opponent Nos. 2 to 5 are the unsecured creditors having the claim against Opponent No.1-Vessel and they had filed Admiralty Suit No. 14 of 2020, No. 18 of 2020 and No. 28 of 2020 respectively when the same was within the territorial waters of the jurisdiction of this Court.

C/AS/17/2020 IA ORDER DATED: 22/09/2021

3.3 It is further the case of the applicant-original plaintiff that the judgment and decree dated 04.02.2021 was passed by this Court in Admiralty Suit No. 17 of 2020 after selling Opponent No.1-Vessel. This Court in the judgment and decree dated 04.02.2021 has observed and held as under:

"11. Though the Plaintiff has not made its application under Order XII Rule 6 of the Code of Civil Procedure, 1908, on a bare reading of the provision and the powers of the Court under Section 151 of the Code of Civil Procedure, 1908, this Court is of the opinion that it may on its motion pass a decree in favour of the Plaintiff basis the admission of the Registered owners of the Defendant vessel of the Plaintiff's Claim in its entirety in its Written Statement. M/s. SPV Sam Hawk Inc., the Registered Owners of the Defendant Vessel have admitted in [para (3)] of the Written Statement and [para (3)] of the Reply that the Plaintiff Bank has a registered mortgage as is evident from the Certificate of Ownership and Encumbrance issued by the Liberian Registry and annexed as Annexure B to the Plaint and admitted the entire claim of the Plaintiff being USD 24,143,731.38 being due and payable by them to the Plaintiff Bank in para (5) of the Written Statement and in para (5) of the Reply to the Plaintiff's application seeking summary judgment. In view of the same, a case has also been made out for passing a judgment/decree in favour of the Plaintiff basis the said admissions.

12.The suit is within limitation. Resultantly, the present suit is decreed as below:

a. That there be an order and a decree in favour of the Plaintiff for a sum of USD 24,143,731.38 (United States Dollars Twenty-Four Million One Hundred Forty-

C/AS/17/2020 IA ORDER DATED: 22/09/2021

Three Thousand Seven Hundred and Thirty One and Thirty Eight Cents only) which is inclusive of interest till the date of filing of the Suit, together with further interest at the rate of 12% p.a., from the date of the filing of the suit till the date of decree and further interest at 12% p.a. from the date of decree till date of payment and/or realisation and further order

b. That there be an order and decree that the claim of the Plaintiff in the Suit is secured in favour of the Plaintiff by a valid and subsisting first priority mortgage over the Defendant Vessel M.V. SAM HAWK registered with the Liberian Flag dated 24th July 2015"

3.4 The applicant-original plaintiff has filed this application under Section 10 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (hereinafter referred to as the 'Admiralty Act of 2017') for determining priority in disbursement of sale proceeds, which is lying before the Registry of this Court, received from the sale of Opponent No.1-Vessel from the said sale proceeds.

4. Learned Senior Advocate Mr. S.N. Soparkar submitted that as per Section 10 of the Admiralty Act of 2017, the applicant-original plaintiff who is a registered mortgagee has priority over the claim on the sale proceeds as there is no other claim on Opponent No.1-Vessel when there is a maritime lien as per Clause (a) of sub-Section (1) of Section 10 of the Admiralty Act of 2017.

5. On the other hand learned Advocate Mr. Manav Mehta submitted that Opponent Nos. 2 to 5 also have maritime claim against Opponent No.1- Vessel, which is sold by this Court by way of auction and the sale proceeds of such auction are deposited with the Registry of this Court and therefore the applicant-original plaintiff should file an undertaking that if any other claim arises or is determined against Opponent No.1-Vessel or its owner then the

C/AS/17/2020 IA ORDER DATED: 22/09/2021

applicant-original plaintiff will satisfy such claim.

6. In rejoinder learned Senior Advocate Mr. Soparkar submitted that as of now there is no other claim on Opponent No.1-Vessel and when there is no maritime lien of any person on Opponent No.1-Vessel, and if anyone has a maritime lien as per Section 10 (1)(a) of the Admiralty Act of 2017, such person can recover the claim from the applicant-original plaintiff.

7. In view of the above it would be necessary to refer to Section 10 of the Admiralty Act of 2017, which reads thus:

"10. Order of priority of maritime claims.--(1) The order of maritime claims determining the inter se priority in an admiralty proceeding shall be as follows:-- (a) a claim on the vessel where there is a maritime lien;

(b) registered mortgages and charges of same nature on the vessel;

(c) all other claims.

(2) The following principles shall apply in determining the priority of claims inter se-- (a) if there are more claims than one in any single category of priority, they shall rank equally;

(b) claims for various salvages shall rank in inverse order of time when the claims thereto accrue."

8. From perusal of the above provisions it appears that as the applicant- original plaintiff is the registered mortgagee, it has the priority over the sale proceeds than any other claim as provide under Section 10 of the Admiralty Act of 2017. Accordingly as the sale proceeds are with the Registry of this Court, it is required to be paid to the applicant-original plaintiff subject to any claim which may arise as there is a maritime lien, the applicant-original plaintiff shall be liable to satisfy such claim.

C/AS/17/2020 IA ORDER DATED: 22/09/2021

9. On such condition the sale proceeds deposited with the Registry of this Court is ORDERED to be paid to the applicant-original plaintiff within one week from today, as per the bank details to be submitted by the applicant- original plaintiff to the Registry of this Court at its own costs.

10. This application is accordingly DISPOSED OF.

(BHARGAV D. KARIA, J) UMESH/-