- Claims related to port or harbor dues,
canal, dock or light tolls, waterway charges, and similar levies.
- Particular average claims.
- Claims by master or crew or their heirs,
dependents for wages, cost of repatriation, or social insurance
contributions.
- Insurance premiums, mutual insurance calls.
- Commission/brokerage agency fees payable by the vessel owner or demise charterer.
- Environmental damage claims or threat thereof.
- Wreck removal claims.
- The person who owned the vessel when the
maritime claim arose is liable for the claim and is the owner of the vessel
when the arrest is effected.
- The demise charterer of the vessel when the
maritime claim arose is liable for the claim and is the demise charterer or
the owner of the vessel when the arrest is effected.
- The claim is based on a mortgage or a
similar charge on the vessel.
- The claim relates to the ownership or
possession of the vessel.
- The claim is against the owner, demise
charterer, manager, or operator of the vessel and is secured by a maritime
lien as provided in Section 9.
- Execution of Power of Attorney (PoA): The claimant executes a Power of Attorney in favor of a person,
typically suggested by their solicitor, to act on their behalf. While the
original PoA, duly executed, notarized, and legalized/apostilled, is
couriered, a scanned copy can be forwarded for immediate action due to time
sensitivity. The claimant's solicitors usually provide an undertaking to the
court to produce the original PoA once received. The original PoA also needs
to be stamped under Indian law.
- Caveat Search: The claimant's solicitor conducts a search of the caveat book for
any caveats against arrest.
- Notice to Consul General: Where required by High Court Rules, notice is given to the Consul
General of the flag state of the vessel.
- Filing of Pleadings: The claimant files the Plaint, an Undertaking, a
draft Judge's Order/Interim Application, a draft Warrant of Arrest,
and an accompanying affidavit with the court under its Admiralty
jurisdiction. All supporting exhibits and documents are typically filed as a
separate Compilation of Documents during the application for arrest.
- Urgent Application for Arrest Order: An urgent application for an arrest order is moved before the
Admiralty Judge. The Plaint, other pleadings, the draft Judge's Order, and
the caveat book are presented to the Judge. The Admiralty Judge then passes
an order, which may be in terms of the submitted draft or a dictated
separate order. In some cases, the issuance of a Warrant of Arrest may be
dispensed with, and an order for service of the court order via fax or email
to concerned authorities may be obtained.
- Issuance of Warrant of Arrest: If the Warrant of Arrest is not dispensed with, the court issues
the same, duly signed.
- Service of Warrant/Order: The Bailiff effects or completes the service of the Warrant of
Arrest or the Order of the court upon all concerned authorities.
- Bombay High Court
- Calcutta High Court
- Madras High Court
- Gujarat High Court
- Telangana High Court
- Andhra Pradesh High Court
- Karnataka High Court
- Kerala High Court
- Orissa High Court
- Action in Rem (Section 5): An action in rem is a proceeding directly against the property
itself (the "res"), which in Admiralty law typically refers to
the ship, cargo, or freight. The purpose of an action in rem is to
obtain security against a maritime claim by arresting the vessel. If the
claim is proven, the ship can be sold by court order to satisfy the
judgment. The ship is treated as having a legal personality for this
purpose. The core principle is that the "ship pays for the wrong it has
done." Section 5(1) outlines the conditions under which a High
Court may order the arrest of a vessel within its jurisdiction for security
against a maritime claim. Section 5(2) allows for the arrest of a
sister vessel (any other vessel beneficially owned by the person liable
for the maritime claim) for the purpose of providing security, in lieu of
the vessel against which the maritime claim directly arose.
- Action in Personam (Section 6 & 7): An action in personam is a traditional legal proceeding
brought against a specific person or entity, seeking a judgment that
will bind that person personally. In Admiralty law, this means the action is
directed against the owner, demise charterer, manager, or operator of the
vessel, rather than the vessel itself. Section 6 states that the High
Court may exercise Admiralty jurisdiction by action in personam in respect
of any maritime claim listed under Section 4. Section 7 imposes restrictions
on actions in personam in certain cases, particularly for claims arising
from collision, maneuvers, or non-compliance with collision regulations. In
such cases, the High Court will only entertain an action if the cause of
action arises wholly or partly in India, or if the defendant resides,
carries on business, or personally works for gain in India at the time the
action commences. It also includes provisions regarding prior proceedings in
foreign courts and counter-claims.
- Target:
Action in rem targets the ship; action in personam targets the person/entity.
- Purpose:
Arrest in rem provides security and establishes jurisdiction; action
in personam seeks a personal judgment.
- Jurisdiction: In rem requires the ship to be within jurisdiction; in
personam requires the defendant to be present or submit to jurisdiction.
- Scope:
Actions in rem are confined to specific maritime liens or statutory rights
in rem. Actions in personam can be broader but are subject to jurisdictional
rules.
- Wrongful:
For example, the claimant had no reasonable and probable cause for the
arrest, or acted with mala fides (bad faith).
- Unjustified:
The claim itself was not maintainable, or the conditions for arrest were not
met.
- Excessive security was demanded: The amount of security sought was disproportionately high compared
to the actual claim.
- The vessel is subject to rapid deterioration.
- The expenses of maintaining the vessel under
arrest are disproportionately high compared to its value or the claim.
- There is a risk of the vessel's value
diminishing significantly.
- The owner has abandoned the vessel after
arrest.
- Pre-Moratorium Arrest: If a vessel is arrested before the moratorium commences, the
Admiralty Court generally retains jurisdiction, and the vessel remains under
arrest. The Admiralty claim, if secured by arrest, is often treated as a
"secured claim" under IBC.
- Post-Moratorium Arrest: An Admiralty action seeking the arrest of a vessel for a claim
against a Corporate Debtor after the moratorium has commenced is
likely to be stayed or not permitted by the Admiralty Court, as it would
violate the moratorium provisions.
- Release of Vessel: Even if a vessel was arrested pre-moratorium, its release would
generally be subject to the IBC framework. Courts have held that such
vessels can only be released by the Admiralty Court upon full payment of
security, aligning with the IBC's objective of maximizing asset value.
- Priority of Claims: While the Admiralty Act, 2017, provides a clear priority for
maritime claims, the IBC has its own waterfall mechanism for distribution of
assets during liquidation (Section 53). The Supreme Court and various High
Courts have tried to harmonize these two laws, often acknowledging that
maritime claimants who have secured an arrest prior to the moratorium should
be treated as secured creditors with a charge on the vessel's value.
However, the final say on the treatment of such claims within the broader
insolvency framework rests with the National Company Law Tribunal (NCLT),
the adjudicating authority under the IBC.
- Payment of Claim Amount into Court: The defendant pays the full amount of the plaintiff's claim
(including interest and costs) directly into the court.
- Provision of Security: This is the most common method. The defendant furnishes security,
which can be in the form of:
- Bank Guarantee: An unconditional and irrevocable bank guarantee from a reputable
bank, usually for the amount claimed plus interest and costs, or a
court-determined amount.
- P&I Club Letter of Undertaking (LOU): As discussed, an LOU from a reputable P&I Club may be
accepted, subject to the claimant's agreement and the court's satisfaction
with its terms.
- Cash Deposit: A direct cash deposit into the court, though less common for large
claims due to liquidity implications.
- Plaintiff's Request: The plaintiff (claimant) requests the release of the vessel,
usually after a settlement has been reached or the claim is satisfied.
- Court Order on Other Grounds: The court may order release on any other ground it deems just, for
instance, if the arrest is found to be wrongful, unjustified, or if the
claim is dismissed.
- If the original security provided was
insufficient and later found to be so by the court, and there are specific
legal grounds to seek further security.
- If the release was procured through fraud.
- If the claim is for a different, distinct
maritime claim that arose after the initial release.
- Safeguard against Wrongful Arrest: It acts as a primary safeguard for the shipowner against
unjustified or malicious arrest.
- Basis for Compensation: If the arrest is later found to be wrongful, unjustified, or
excessive, this undertaking forms the legal basis upon which the defendant
can claim compensation for losses incurred.
- Facilitates Ex-Parte Orders: Courts are more willing to grant ex-parte arrest orders because the
undertaking provides a mechanism for recourse for the defendant if the order
is subsequently set aside.
- Discourages Frivolous Arrests: The potential liability for damages encourages claimants to ensure
they have a strong prima facie case before seeking arrest.
- The Warrant of Arrest issued by the
court is typically served by the Admiralty Marshal or an officer
authorized by the court.
- The service is usually effected by affixing
a copy of the warrant on the mast or some other conspicuous part of the
vessel.
- A copy of the warrant is also usually delivered
to the master of the vessel or any person appearing to be in charge of it.
- Notices of the arrest are also typically
provided to the relevant port authorities (Port Trust, Customs, Immigration)
to ensure the vessel cannot sail.
- Court Fees (Ad Valorem): Most High Courts levy court fees based on the value of the claim.
This is a significant component. The fee structure is usually prescribed in
the High Court's own rules for its original side or admiralty jurisdiction.
For very large claims, these fees can be substantial.
- Admiralty Marshal's Fees/Expenses: Fees payable to the Admiralty Marshal (or the equivalent officer)
for effecting the arrest, maintaining custody of the vessel, and managing
expenses related to the vessel's stay (e.g., watchmen, provisions, bunkering
for essential services). These are often initially borne by the claimant but
are generally recoverable as "sheriff's expenses" with the highest
priority in a judicial sale.
- Legal Professional Fees: Fees charged by the instructing solicitors and counsel (barristers)
for drafting pleadings, appearing in court, and handling the entire arrest
process.
- Notarization, Legalization, Apostille Costs: For Power of Attorneys and other foreign documents.
- Translations: If documents are not in English.
- Communication & Miscellaneous Expenses: Courier, photocopying, local travel, etc.
- Interpretation of the 2017 Act: Ongoing judicial interpretation continues to clarify ambiguities or
omissions in the Admiralty Act, 2017, particularly regarding the scope of
"owner" and "demise charterer" for arrest purposes, and
the specifics of sister-ship arrest in light of the exclusion of claims
against time/voyage charterers from direct arrest.
- Harmonization with IBC: The courts are actively grappling with the delicate balance and
potential conflicts between the Admiralty Act, 2017, and the Insolvency and
Bankruptcy Code, 2016, especially concerning the treatment of arrested
vessels of corporate debtors undergoing insolvency proceedings.
- Recognition of Foreign Law: While the 2017 Act codifies Indian Admiralty law, Indian courts
continue to refer to international conventions and foreign jurisprudence
(especially English law) for persuasive value in interpreting provisions and
addressing issues not explicitly covered. The recognition and enforcement of
foreign maritime liens remain an area of interest.
- Emphasis on Speedy Resolution: Courts increasingly emphasize expeditious disposal of Admiralty
matters, given the commercial implications of prolonged ship arrests. This
includes encouraging alternative dispute resolution mechanisms and strict
adherence to timelines.
- Digitalization: While not yet fully implemented across all Admiralty courts, there
is a push towards digitalization of court processes, which could impact the
speed and efficiency of filing and monitoring arrest proceedings.
- Impact of Sanctions: The increasing complexity of international sanctions regimes has
led to discussions and judicial scrutiny regarding the enforceability of
LOUs containing sanctions clauses and the broader implications for maritime
claims involving sanctioned entities or jurisdictions.
- (a) Claims for wages and other sums due to the
master, officers, and other members of the vessel's complement in respect of their employment on the vessel, including costs of
repatriation and social insurance contributions payable on their behalf.
- (b) Claims in respect of loss of life or
personal injury occurring, whether on land or on water, in
direct connection with the operation of the vessel.
- (c) Claims for reward for salvage services including special compensation relating thereto.
- (d) Claims for port, canal, and other waterway
dues and pilotage dues and any other
statutory dues related to the vessel.
- (e) Claims based on tort arising out of loss or
damage caused by the operation of the vessel other than loss or damage to cargo and containers carried on the
vessel.
- Proprietary Nature (Jus in re): A maritime lien creates an interest in the property itself (the
vessel, cargo, freight, or proceeds of sale), allowing the claimant to
proceed against the res directly.
- Automatic Attachment: It attaches to the property from the moment the cause of action
arises, without the need for prior judicial intervention.
- Durability:
It survives a change of ownership, even if the new owner is a bona fide
purchaser without notice, except when the vessel is sold by an order of an
Admiralty Court (a judicial sale clears all prior maritime liens).
- No Possession Required: Unlike possessory liens in general civil law, a maritime lien
holder does not need to have possession of the property to assert their
right.
- Priority:
In maritime law, the general rule of "prior in time is prior in
right" often gives way to specialized maritime lien priority rules,
where often the most recent maritime lien holders in certain categories
(e.g., salvage) may rank higher than earlier ones, and all maritime liens
generally rank superior to non-maritime claims (e.g., mortgages) in the
event of a judicial sale.
- "goods, materials, perishable or
non-perishable provisions, bunker fuel, equipment (including
containers), supplied or services rendered to the vessel for its operation,
management, preservation or maintenance including any fee payable or
leviable."
- Security for the Claim: The primary effect of arrest is that it constitutes the vessel or
other property as security in the hands of the court for the claim in the
action. This means the vessel is detained by court order to ensure that
if the claimant ultimately succeeds in the suit, there is an asset available
to satisfy the judgment. As the court holds the property as security, this
security generally cannot be defeated by the subsequent insolvency of the
owner of the arrested property, as the claim becomes a secured claim against
the asset in the court's custody.
- Custody of the Court: Once the Warrant of Arrest has been executed, the property is
arrested and comes into the custody of the Sheriff/Marshal (or an
equivalent officer) on behalf of the court. It's crucial to note that the
Sheriff/Marshal has custody, not possession, meaning they control the
vessel's physical movement and preservation, but the underlying possessory
rights of the owner/master generally remain, subject to the court's complete
control.
- Prohibition of Movement: An arrested vessel cannot be moved from the place of arrest without
the express authority of the Sheriff/Marshal or the court. Any unauthorized
interference with the arrest process, such as removing the property to be
arrested with knowledge that an arrest has been issued, or moving the
property within or removing it from the jurisdiction after arrest,
constitutes contempt of court and can lead to severe penalties.
- Duty of Sheriff/Marshal: The duty of the Sheriff/Marshal is to ensure the safe custody
and preservation of the vessel. This includes taking all appropriate
steps, such as arranging for watchmen, provisions, bunkering for essential
services, and even removing or storing cargo under arrest or moving the
vessel to a safer berth if required by port operations or for its
preservation. The expenses incurred by the Sheriff/Marshal for maintaining
the arrest are typically considered "Sheriff's expenses" and
generally enjoy the highest priority in a judicial sale.
- Scope of Arrest: A warrant of arrest on a vessel typically covers everything
belonging to it as part of its equipment. This includes items physically
detached but considered appurtenances. However, it generally does not extend
to items that do not belong to the vessel owner, such as the personal
property of the master and crew or passenger luggage.
- Cargo vs. Vessel Arrest: A vessel may be arrested, but the cargo on board may not be under
arrest, or vice-versa. If a vessel is arrested while discharging cargo, the
Sheriff/Marshal will not typically stop discharge operations unless the
cargo itself is also under arrest. In such cases, shipowners can request the
Sheriff/Marshal to facilitate cargo discharge.
- Intervention by Third Parties: When a vessel's arrest causes significant disruption to port
operations, or serious hardship to third parties, the court has inherent
jurisdiction to allow affected parties to intervene and seek directions
(e.g., to move the vessel to a safer berth) to mitigate such adverse
effects.
- Continuation of Proceedings: The arrest facilitates the continuation of the admiralty
proceeding. The vessel remains in the custody of the court until released
upon the provision of alternative security (cash, bank guarantee, P&I
LOU) or until it is sold by the court in a judicial sale to satisfy the
maritime claims.
- Preparation of Documents: The readiness of the claimant's legal team with all necessary
documents (plaint, affidavit in support of arrest application, Power of
Attorney, supporting exhibits).
- Court Schedule and Availability of Judge: If an urgent ex-parte (without notice to the defendant)
arrest order is sought, the availability of a judge for immediate hearing is
crucial.
- Court Fees Payment: Timely payment of ad valorem court fees.
- Location of Vessel: The physical location of the vessel and its accessibility for the
Admiralty Marshal/Bailiff.
- Efficiency of Court Registry/Marshal's Office: The time taken to process the order, issue the warrant, and
dispatch the Bailiff.
- An application can be heard and an arrest order
obtained within 24-48 hours of filing, sometimes even faster in
highly urgent cases (e.g., vessel about to sail).
- Once the order is passed, the Admiralty
Marshal/Bailiff proceeds to the port to serve the Warrant of Arrest.
- While court rules may allow for immediate
notification to port and customs authorities via fax or email, the authenticated
copy of the order of arrest must eventually be hand-delivered by the
Bailiff/Marshal with a cover letter. A junior lawyer or clerk usually
accompanies the Bailiff for prompt service on all concerned authorities and
on board the vessel.
- Court Fees (Ad Valorem): These are mandatory and vary based on the High Court and the value
of the claim. They can be a significant cost. For instance, the Bombay High
Court has a maximum court fee, which for many years was around ₹3,00,000 (approx. USD 3,600 - 4,000 at current exchange rates).
However, specific High Courts may have their own schedules, and it's
essential to check the latest rules of the concerned High Court. The
provided link for court fee calculation (http://bruschambers.com/info/calculator.htm)
is a useful tool but should be cross-referenced with the specific High
Court's latest fee schedule.
- Legal Professional Fees: Fees charged by the instructing advocates and counsel for drafting,
filing, court appearances, and managing the process. These are variable and
depend on the firm's rates, complexity of the case, and duration of the
proceedings. It is customary to add a provision for legal costs (e.g.,
approx. USD 18,000 as mentioned in some billing rates) to the Particulars of
Claim to seek recovery from the opponent, though recovery is at the court's
discretion and usually limited to reasonable costs.
- Admiralty Marshal/Sheriff's Expenses: These are expenses incurred by the court's officer for the actual
execution of the arrest and for maintaining the vessel's safe custody while
under arrest. This can include:
- Fees for effecting the arrest.
- Costs of watchmen/security on board.
- Provisions and bunkers for the crew (if the
vessel is laid up with crew).
- Port charges, pilotage, tugs (if the vessel
needs to be moved).
- These expenses are often paid upfront by the
claimant but are generally recoverable as "Sheriff's expenses"
with the highest priority in case of a judicial sale. Some High Courts may
require an initial deposit to cover these.
- Disbursements/Other Expenses:
- Institution Fees: Any specific fees for instituting the suit.
- Photocopying and Printing: For documents and court filings.
- Transport, Travel, and Stay: If the legal team or Bailiff needs to travel to the vessel's
location.
- Launch Hire: If the vessel is at anchorage and a launch is required for the
Bailiff to board.
- Court Departmental Expenses: Miscellaneous fees within the court registry.
- Notarization, Legalization, Apostille: For Power of Attorneys and foreign documents.
- Translation Costs: If documents are not in English.
- Communication: Courier, telephone, internet.
- I. At the Request of the Claimant:
- The claimant (plaintiff) can request the
release of the vessel. This typically occurs when a settlement has been
reached between the parties, or the claim has been satisfied.
- If the matter is settled out of court and the
defendant has not formally entered an appearance (filed a vakalatnama),
the claimant's solicitor would apply for release. The court may require a
search of the caveat book to ensure no other parties have filed caveats
against release before issuing the order.
- II. On the Opponent (Defendant) Paying the
Claim Amount into Court:
- The defendant can pay the full amount claimed
in the suit, including interest and costs (as assessed or agreed),
directly into the court. This provides immediate security for the
claimant.
- III. On the Opponent Giving Such Security for
the Claimed Amount as the Court May Direct:
- This is the most frequent method. The
defendant furnishes security, which replaces the vessel as the res
in the action. The types of security commonly accepted are:
- Bank Guarantee: An unconditional and irrevocable bank guarantee from a reputable
Indian bank, typically for the amount of the claim plus interest and
costs, or an amount determined by the court.
- P&I Club
Letter of Undertaking (LOU): An LOU from a
recognized Protection and Indemnity (P&I) Club is widely accepted in
commercial practice. However, its acceptance is subject to the
claimant's agreement and the court's satisfaction with its terms (e.g.,
ensuring no restrictive clauses like sanctions clauses impede
enforceability). If the claimant objects to the LOU, the court will
decide on its adequacy.
- Cash Deposit: A direct cash deposit into the court, although less common for
large claims due to liquidity implications for the shipowner.
- IV. On Any Other Ground that the Court May Deem
Just:
- The court retains inherent powers to order
release on other equitable grounds, such as:
- If the arrest is found to be wrongful,
unjustified, or excessive (often leading to a claim for damages by the
shipowner).
- If the court finds it lacks jurisdiction or
the claim is not maintainable in admiralty.
- If an adequate alternative forum has been
agreed upon, and security is being provided elsewhere.
- The Warrant of Arrest is formally
withdrawn.
- Notices are sent to the port authorities (Port
Trust, Customs, Immigration) and other relevant government bodies informing
them of the release and allowing the vessel to depart.
- The Release Instrument (a formal
document from the court authorizing release) may be issued by the court.
Often, courts dispense with the physical issuance of a separate Release
Instrument, and the order itself is sufficient, but this depends on the
specific High Court's practice.
- (a) require the claimant to provide an
unconditional undertaking
to pay such sums of money as damages or such security of a kind for an
amount as determined by the High Court, for any loss or damage which may be
incurred by the defendant as a result of the arrest of the vessel. This is
usually sought by the defendant when applying for release of the vessel, to
protect themselves against potential losses from a wrongful arrest.
- (b) award damages, interest, and costs to the defendant if the arrest was wrongful or unjustified.
- Liability for Damages: The claimant may be liable to pay damages to the shipowner for
losses incurred due to the wrongful arrest, which can include detention
losses (loss of earnings, port charges, crew wages, maintenance costs during
arrest), costs of providing security for release, and legal expenses.
- Legal Costs:
The claimant may be ordered to pay the defendant's legal costs.
- Reputational Damage: For frequent claimants, a history of wrongful arrests can damage
their reputation in the maritime industry.
- (a)
the person who owned the vessel at the time when the maritime claim arose is
liable for the claim and is the owner of the vessel when the arrest is
effected; or
- (b)
the demise charterer of the vessel at the time when the maritime claim arose
is liable for the claim and is the demise charterer or the owner of the
vessel when the arrest is effected; or
- (c)
the maritime claim is against the owner or demise charterer of the vessel
and is secured by a maritime lien; or
- (d)
the owner or demise charterer of the vessel is liable for the claim and the
claimant is in possession of the vessel concerned; or
- (e)
the claim is against the owner, demise charterer, manager or operator of the
vessel and is secured by a maritime lien as provided in section 9.
- If a maritime claim has been finally
adjudicated and decided by a competent Indian High Court, the same claimant
generally cannot bring another admiralty suit for the same claim against the
same vessel or its sister ship, or against the same parties.
- Similarly, if an arrest application for a
specific claim against a particular vessel has been fully heard and
dismissed by a competent Indian High Court, a fresh application for arrest
on the exact same grounds against the same vessel or its sister ship by the
same claimant is likely to be barred by res judicata or principles
analogous to it (e.g., constructive res judicata).
- Caveat Against Arrest: A party (e.g., a shipowner) who anticipates that their vessel might
be arrested can file a caveat against arrest. This requires the party to
provide an undertaking to the court to furnish security (or pay the claim
amount into court) if an arrest warrant is issued against their vessel. The
purpose is to prevent an ex-parte arrest and ensure they are given
notice and an opportunity to be heard before an arrest takes place. It
allows for a more orderly process of providing security without the vessel
being physically detained.
- Caveat Against Release: A party who has a claim against an arrested vessel, but is not the
arresting party, can file a caveat against release. This is a formal notice
to the court not to release the vessel without notifying the caveator. This
protects the caveator's interest, especially if they intend to intervene in
the existing suit or file their own claim against the vessel.
- Maritime Liens: As mentioned in Question 11, maritime liens generally extinguish
after one year unless the vessel is arrested and sold by the High
Court within that period. However, for wages claims, the period is two
years from the date the wage falls due (Section 9(2) of the Admiralty
Act, 2017).
- Collision Claims: The Limitation Act also has specific provisions for certain
maritime claims, e.g., actions for damages arising out of collisions, which
typically have a two-year limitation period under Section 11 of the Indian
Ports Act, 1908 (though this may be subject to interpretation given the 2017
Act).
- Port Congestion: To clear a berth that is urgently needed for other vessels, to
alleviate congestion, or to reduce port charges (if a cheaper lay-up berth
is available).
- Safety and Preservation: To move the vessel to a safer location during adverse weather, or
to a place where necessary maintenance can be carried out for its
preservation.
- Cost Reduction: To reduce the ongoing costs associated with keeping the vessel in a
particular high-tariff port.
- Action In Rem (Against the "Thing"): This is a unique feature of admiralty law. It is an action brought
directly against the maritime property itself, primarily the vessel. The
vessel is treated as if it were a legal person liable for the claim. The
purpose is to enforce a maritime lien or to obtain security for a maritime
claim. The jurisdiction is founded on the presence of the vessel within the
court's geographical limits and its arrest. If the owner does not appear,
the proceedings can still continue, leading to the judicial sale of the
vessel. The judgment in an in rem action binds the vessel itself,
leading to a "clean title" upon judicial sale. Section 5 of the
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017,
deals with action in rem.
- Action In Personam (Against the
"Person"): This is a
traditional civil action brought against a specific person or legal entity
(e.g., the vessel owner, charterer, or operator). The court's jurisdiction in
personam requires the defendant to be subject to the court's personal
jurisdiction (e.g., by residence, carrying on business, or having the cause
of action arise within the court's territory). A judgment in an in
personam action creates a personal liability against the defendant.
While the Admiralty Act empowers High Courts to exercise in personam
jurisdiction for maritime claims (Section 6), it is subject to
certain restrictions outlined in Section 7, particularly for
collision claims. The in rem action is the preferred method for
securing maritime claims against foreign vessels in India.
- Maritime Liens: As established by Section 9(2) of the Admiralty Act, 2017, a
maritime lien continues to exist on the vessel "notwithstanding any
change of ownership or of registration or of flag." This reinforces the
powerful proprietary nature of a maritime lien, where the claim attaches to
the vessel itself, regardless of subsequent administrative changes.
- Other Maritime Claims (Action in rem): For maritime claims that do not give rise to a maritime lien, the
ability to arrest a vessel after a change of ownership is governed by Section
5(1)(a) and (b) of the Admiralty Act, 2017. This section requires that
the person who owned or was the demise charterer of the vessel at the time
the maritime claim arose must also be the owner or demise charterer
when the arrest is effected. Therefore, if there has been a genuine change
of ownership (not just a flag or name change, but a transfer of legal and
beneficial title to a new, unconnected entity) after the claim arose,
and the claim is not secured by a maritime lien, then the vessel typically
cannot be arrested for that claim against the new owner. However, if the
change is merely nominal (e.g., name or flag change without change in
beneficial ownership or registered owner liability), the vessel can still be
arrested.
- Letters of Undertaking (LOUs): When a vessel is arrested, or to prevent an impending arrest, the
P&I Club of the shipowner may issue a Letter of Undertaking (LOU) to the
claimant. This LOU is a contractual undertaking by the P&I Club to pay
any judgment or arbitral award that the claimant may obtain against the
member, up to a specified amount.
- Facilitating Release: The acceptance of a P&I LOU by the claimant (or, if disputed,
by the court) allows for the release of the arrested vessel without the need
for a cash deposit or bank guarantee, thereby minimizing the disruption and
costs for the shipowner. LOUs are generally preferred due to their ease of
execution and acceptance in international maritime trade.
- Indemnification: The P&I Club then indemnifies its member (the shipowner) for
the liability covered by the LOU, subject to the terms of the insurance
policy.
- A vessel can be arrested to secure a
pre-existing court judgment (domestic or foreign) related to a maritime
claim.
- A vessel can be arrested to secure an arbitral
award (domestic or foreign) related to a maritime claim.
- (a)
"the person who owned the vessel at the time when the maritime claim
arose is liable for the claim and is the owner of the vessel when the arrest
is effected; or"
- (b)
"the demise charterer of the vessel at the time when the maritime claim
arose is liable for the claim and is the demise charterer or the owner of
the vessel when the arrest is effected; or"
- (e)
"the claim is against the owner, demise charterer, manager or operator
of the vessel and is secured by a maritime lien as provided in section
9."
- Section 5(1)(a) and (b) refer to the "person who owned the vessel" or "the
demise charterer of the vessel" at the time the claim arose, and who is
also the owner/demise charterer at the time of arrest.
- Section 5(1)(e) allows arrest if the claim is against the owner, demise charterer,
manager, or operator and is secured by a maritime lien.
- Their liability gives rise to one of the
specific maritime liens listed in Section 9 of the Act (which is rare
for typical time/voyage charterer claims like unpaid hire).
- The vessel owner or demise charterer is also
personally liable for the claim that arose from the time charterer's actions
(e.g., if the owner remains jointly liable for the bunkers supplied to the
vessel at the time charterer's order).
- "Any other vessel": This refers to a vessel under the same beneficial ownership as the
"offending" vessel (the vessel in respect of which the maritime
claim arose).
- Beneficial Ownership: The Supreme Court of India has consistently interpreted "same
beneficial ownership" broadly to include situations where the same
group of individuals or corporate entities effectively control both vessels,
even if registered under different corporate names. The focus is on the
ultimate beneficial owner.
- Exclusion:
Note the proviso: a sister ship cannot be arrested for a claim regarding
"dispute regarding the possession or ownership of a vessel or the
ownership of any share therein" (Section 4(1)(a)). This specific
type of claim targets the offending vessel directly.
- A claimant can initiate an admiralty suit and
seek the arrest of a vessel to secure a maritime claim, even if the
underlying contract contains an arbitration clause.
- Once the vessel is arrested or security is
provided, the defendant can apply for a stay of the admiralty proceedings
under Section 8 of the Arbitration and Conciliation Act, 1996, and
refer the dispute to arbitration.
- The Indian High Court, while staying the
admiralty suit, will usually retain the security furnished by the
shipowner (or maintain the arrest if no security is provided) to ensure that
any eventual arbitral award can be satisfied. This ensures that the
claimant's security is preserved while the merits are decided in the chosen
arbitral forum.
- (a) claims for wages and other sums due to the
master, officers and other members of the vessel's complement in respect of their employment on the vessel, including costs of
repatriation and social insurance contributions payable on their behalf;
- (b) claims in respect of loss of life or
personal injury occurring, whether on land or on water, in
direct connection with the operation of the vessel;
- (c) claims for reward for salvage services including special compensation relating thereto;
- (d) claims for port, canal, and other waterway
dues and pilotage dues and any other
statutory dues related to the vessel;
- (e) claims based on tort arising out of loss or
damage caused by the operation of the vessel other than loss or damage to
cargo and containers carried on the vessel. (This generally covers collision damage, damage to fixed objects
like docks, etc., but specifically excludes cargo claims from being maritime
liens).
- Arbitration Agreement: As discussed in Question 26, if there is a valid arbitration
agreement between the parties, the court, upon application, will usually
stay the admiralty suit and refer the parties to arbitration for the
adjudication of the substantive claim. The court will, however, generally
retain the security provided for the arrest.
- Jurisdiction Clause: If the underlying contract contains an exclusive jurisdiction
clause stipulating that disputes are to be heard in a foreign court, the
Indian High Court might, on an application by the defendant (e.g., on the
grounds of forum non conveniens), stay or dismiss the admiralty suit,
provided the foreign forum is truly the appropriate one. However, the
discretion to retain security even in such cases to ensure satisfaction of a
foreign judgment has been exercised by Indian courts.
- Scope of Jurisdiction: The High Court's jurisdiction is limited to the maritime claims as
defined in Section 4 of the Admiralty Act, 2017. Claims falling
outside this definition cannot be heard and determined under the admiralty
jurisdiction.
- "...impose upon the claimant who seeks to
arrest or who has procured the arrest of the vessel, an obligation to
provide an unconditional undertaking to pay such sums of money as damages or
such security of a kind for an amount as determined by the High Court, for
any loss or damage which may be incurred by the defendant as a result of the
arrest of the vessel, in particular, the arrest having been wrongful or
unjustified; or excessive security having been demanded and
provided."
- Mala fides (bad faith): This implies malice, ulterior motive, or a dishonest intention on
the part of the claimant.
- Crassa negligentia (gross negligence): This refers to extreme carelessness or recklessness, implying an
indifference to the truth or the defendant's rights, which in turn can imply
malice.
- Amount:
Typically, the security amount is set to cover the claimant's "best
arguable case," which includes the principal amount of the maritime
claim, interest (from the date the claim arose until an estimated date of
judgment), and costs (including legal costs). The High Court has the
discretion to determine the quantum of security. If the claim is for a
liquidated sum, the security will generally be for that amount plus interest
and costs. If the claim is unliquidated, the court will make a prima
facie assessment.
- Form:
The most common and accepted forms of security are:
- Bank Guarantee: An unconditional, irrevocable bank guarantee from a reputable
Indian bank, or a foreign bank's guarantee confirmed by an Indian bank.
This is the most prevalent form.
- Cash Deposit: A direct deposit of the required amount into the High Court
registry.
- Protection and Indemnity (P&I) Club Letter
of Undertaking (LOU):
Provided by a reputable P&I Club. These are widely accepted in India
for their reliability in international maritime trade.
- Sometimes, a solvent surety bond might be considered in exceptional cases, but it is less common
for large claims.
- How to intervene: An intervening party typically files an "Intervener's
Application" or "Notice of Motion" in the ongoing admiralty
suit, supported by an affidavit explaining their interest and the nature of
their claim. They may also be required to file their own Plaint for their
maritime claim.
- Purpose:
Intervention allows other claimants to join the proceedings without having
to file a fresh suit and obtain a separate arrest. This is particularly
important when the vessel is already under arrest, as it ensures that their
claim is also considered in any distribution of sale proceeds.
- Rights of Interveners:
- To present their claim and evidence before the
court.
- To be heard on matters related to the vessel's
custody, sale, and distribution of proceeds.
- To share in the proceeds of the judicial sale
of the vessel, according to the priority rules under Section 10 of the
Admiralty Act, 2017.
- To object to the release of the vessel if
their claim is not secured.
- Provision of Security: If the shipowner provides adequate security promptly (within days
or a few weeks), the vessel can be released quickly.
- Contested Claim/Jurisdiction: If the arrest is challenged on grounds of jurisdiction, validity of
the claim, or beneficial ownership, the dispute over the arrest itself can
take months.
- Merits of the Suit: If the maritime claim proceeds to full trial on merits, it can take
several years for a final judgment. During this time, the vessel remains
arrested or the security remains in place.
- Judicial Sale: If the vessel is not released and eventually ordered for judicial
sale, the sale process itself can take several months (including valuation,
advertisement, auction, and confirmation).
- Court Delays: General court backlogs and the complexity of the case can
contribute to delays.
- Port Dues and Charges: Berth hire, pilotage, tugs, light dues, etc.
- Crew Wages and Provisions: For the minimum crew required for safety and preservation (if not
repatriated).
- Bunkers and Fresh Water: For essential services and machinery.
- Watchmen/Security: Appointed by the Admiralty Marshal to guard the vessel.
- Survey and Maintenance: Costs for necessary surveys, repairs, and maintenance to preserve
the vessel's value.
- Insurance:
For the arrested vessel, if deemed necessary by the court.
- Admiralty Marshal's Fees and Expenses: For supervision and administrative duties.
- Application in India: While the Admiralty Act, 2017, does not explicitly codify forum
non conveniens, Indian High Courts have the inherent power to apply this
principle, drawing from principles of justice and convenience. The Supreme
Court has recognized this doctrine in various civil matters.
- Test:
The defendant (shipowner) bears the heavy burden of demonstrating to the
court that:
- Impact on Arrest: If forum non conveniens is successfully pleaded, the Indian
High Court might stay the admiralty suit (or even dismiss it). However, it
is crucial to note that the court may still retain the security (or
maintain the arrest) provided in India to ensure that any judgment or award
from the more appropriate forum can be satisfied. This is to prevent the
claimant from being deprived of their security.
- Effect:
All existing maritime liens (Section 9), registered mortgages (Section
4(1)(c)), and other maritime claims (Section 4) that had attached to the
vessel are extinguished in rem upon the completion of the judicial
sale. These claims then transfer from the vessel itself to the proceeds of
the sale, which are held in the court registry.
- Distribution: The court then distributes these proceeds among the claimants
according to the statutory hierarchy of claims laid down in Section 10 of
the Admiralty Act, 2017. This ensures that even claimants whose
liens/mortgages are extinguished from the vessel still have their claims
considered against the fund.
- Territorial Waters/EEZ: UNCLOS defines maritime zones (territorial sea, contiguous zone,
exclusive economic zone, high seas), which impact the geographical scope of
Indian High Courts' admiralty jurisdiction. The Admiralty Act, 2017, aligns
with these concepts, defining "Indian territorial waters" and
allowing the Central Government to extend jurisdiction to the EEZ.
- Environmental Protection: UNCLOS obliges states to protect and preserve the marine
environment. This is reflected in Section 4(1)(k) of the Admiralty Act,
2017, which explicitly recognizes claims for loss or damage caused by
pollution from a vessel as maritime claims, enabling arrest for such
liabilities.
- Harmonization: Although the Admiralty Act, 2017, is a domestic law, it draws
principles from various international conventions and aims to harmonize
Indian admiralty law with international best practices and norms, many of
which are influenced by UNCLOS. This promotes legal certainty for
international shipping.
- Employment Contract: The arrest itself does not automatically terminate the crew's
employment contracts. Wages continue to accrue.
- Wages as Maritime Lien: Claims for wages and other sums due to the master, officers, and
crew are a maritime lien under Section 9(1)(a) of the Admiralty
Act, 2017. This is the highest priority claim, ranking even above
mortgages, ensuring that crew wages are paid first from the sale proceeds.
- Repatriation: The Act also includes "costs of repatriation" as part of
the maritime lien. The shipowner is responsible for repatriating the crew.
If the owner defaults, the arresting claimant or the Admiralty Marshal may
have to arrange for repatriation, with these costs being recoverable as
Marshal's expenses or against the maritime lien.
- Welfare and Provisions: The Admiralty Marshal, as custodian of the vessel, is responsible
for the safety and preservation of the vessel, which includes ensuring
minimal necessary provisions (food, water, medical supplies) for the crew on
board. While the owner is primarily responsible, the Marshal may make
arrangements with court approval and recover costs as custodia legis
expenses.
- Discharge/Repatriation: Crew members often seek court orders for their discharge and
repatriation, particularly if wages are unpaid. Courts prioritize these
applications due to humanitarian concerns.
- Ex-parte Arrest: The initial arrest application is heard ex-parte (without
notice to the defendant) to prevent the vessel from escaping jurisdiction,
which is a rapid process.
- Expeditious Hearings: High Courts generally prioritize admiralty matters due to the
commercial implications of an arrested vessel. Applications for release,
provision of security, or interlocutory orders are typically heard on an
expedited basis.
- Court's Discretion: The court has inherent powers to manage its docket and can
fast-track cases or specific applications where warranted by the
circumstances (e.g., perishable cargo, rapidly depreciating vessel, high
maintenance costs).
- Arbitration:
If the matter is referred to arbitration, the speed will depend on the
efficiency of the chosen arbitration institution and the arbitrators.
- Costs of clean-up and containment.
- Compensation for actual damage to the
environment (e.g., coastal areas, marine life).
- Costs of preventative measures.
- Losses suffered by third parties due to
pollution.
- Proof of Contract of Carriage: The B/L serves as conclusive evidence of the contract of carriage
between the shipper/consignee and the carrier (often the shipowner or
charterer).
- Evidence of Goods: It is a receipt for the goods shipped and specifies the quantity,
condition (as apparent), and destination of the cargo.
- Document of Title: It confers title to the goods on the lawful holder, allowing them
to take delivery.
- Establishing Maritime Claim: A claim for "loss or damage to or in connection with any goods
(including baggage) carried on a vessel" is a "maritime
claim" under Section 4(1)(f) of the Admiralty Act, 2017. A B/L
provides the primary documentary evidence for such a claim.
- Identifying Liable Party: The B/L helps identify the carrier against whom the claim lies,
which is important for determining if the conditions for in rem
arrest (liability of owner/demise charterer under Section 5) are met.
- Vessels broken up or scrapped.
- Hulks used as floating storage or accommodation
that have lost all characteristics of a vessel intended for navigation.
- Arrestability: Generally, a vessel that is truly a "dead vessel" in this
sense cannot be arrested under admiralty jurisdiction. The
fundamental premise of admiralty jurisdiction is a claim against a
"vessel" as defined by its capacity for navigation. If it ceases
to be a vessel, the admiralty jurisdiction may cease to apply.
- Admiralty Act, 2017: The definition of "vessel" in Section 2(1)(l) of the
Admiralty Act, 2017, includes "any ship, boat, sailing vessel or
other description of vessel used or constructed for use in navigation by
water, whether it is propelled or not, and includes an off-shore industry
mobile unit, drilling ship, dynamic positioning vessel, research vessel,
barge, dredger, floating dock, hovercraft, fishing vessel, or any other
floating craft." The key phrase is "used or constructed for use in
navigation." If a vessel no longer meets this criterion, it may fall
outside the Act's purview for arrest.
- For claims not secured by a maritime
lien: Section 5(1)(a) and (b) state that the
person liable for the maritime claim at the time it arose must also
be the owner or demise charterer of the vessel at the time of the arrest.
Therefore, if the ownership has genuinely changed hands to a new,
unconnected entity after the maritime claim arose and before
the arrest is effected (and the claim is not a maritime lien), the vessel
generally cannot be arrested for a claim against the previous owner.
- For claims secured by a maritime lien: Section 9(2) explicitly states that a maritime lien
"shall continue to exist on the vessel notwithstanding any change of
ownership or of registration or of flag." This means that if a maritime
lien (e.g., for crew wages or salvage) attached to the vessel under the
previous owner, the vessel can still be arrested for that lien even
after a change of ownership.
- Execution of Warrant: Physically serving the warrant of arrest on the vessel.
- Custody and Preservation: Taking effective custody of the arrested vessel and ensuring its
safe preservation. This includes arranging for watchmen, monitoring the
vessel's condition, and sometimes appointing a ship manager.
- Reporting to Court: Regularly reporting to the court on the status, condition, and any
issues concerning the arrested vessel.
- Managing Expenses: Incurring and managing expenses necessary for the preservation and
maintenance of the vessel (custodia legis costs), which are then approved by
the court and given highest priority.
- Facilitating Release: Releasing the vessel from arrest upon receipt of a court order or
the provision of approved security.
- Judicial Sale: Overseeing the valuation, advertisement, and conduct of the
judicial sale of the vessel, including receiving bids and accounting for the
proceeds, as directed by the court.
- Payment into Court: Depositing the sale proceeds into the court registry for
distribution to claimants.
- Rationale:
The principle of separate legal personality of a company is fundamental.
However, courts can disregard this separate personality when it is being
abused.
- Admiralty Context (Sister Ship Arrests): This doctrine is particularly relevant in the context of sister
ship arrests under Section 5(2) of the Admiralty Act, 2017, which
permits the arrest of "any other vessel" (a sister ship) for a
maritime claim against another vessel if they are under the "same
beneficial ownership." While the Act refers to "beneficial
ownership," the courts may need to examine the true control and
ownership structure to determine if different corporate entities are, in
fact, controlled by the same ultimate natural or legal persons.
- Case Law:
The Bombay High Court's decision in Great Pacific Navigation (Holdings)
Corporation Ltd -vs- m.v. Tongli Yantai (2011) affirmed the court's
power to pierce the corporate veil to establish beneficial ownership for the
purpose of sister ship arrest. Subsequent Supreme Court judgments have
further clarified the nuances of "beneficial ownership" in the
context of vessel arrest, emphasizing the importance of control and use of
the vessel over mere legal title. The standard for piercing the corporate
veil remains high, requiring strong evidence of misuse of the corporate form
to prevent indiscriminate application.
- Conditions for Interim Sale: The High Court will generally order an interim sale only if there
is a "good and sufficient reason" for doing so, which would be in
the interest of all parties or to preserve the asset. Common reasons
include:
- High maintenance costs: Where the costs of maintaining the arrest (port dues, crew wages,
bunkers, security, watchmen, etc.) are excessive and likely to diminish
the value of the vessel or exhaust the security available for claimants.
- Vessel deterioration/depreciation: Where the vessel is rapidly depreciating in value, or its physical
condition is deteriorating, which would prejudice the interests of the
claimants or the fund.
- Danger to the vessel/causality: Where there is a real risk of the vessel sinking, causing
pollution, or posing other dangers if it remains under arrest
indefinitely.
- Consensus of parties: If all parties (or a significant majority with substantial claims)
agree to an early sale.
- Procedure:
An application for interim sale (usually a Notice of Motion) must be filed
with the High Court. The court will then order:
- Valuation:
Independent surveyors will value the vessel.
- Advertisement: Advertisements for the sale will typically be placed in prominent
Indian newspapers, the Lloyd's List, and potentially TradeWinds
or other international maritime publications, to ensure wide publicity and
attract bidders.
- Auction:
The sale is usually conducted by public auction under the supervision of
the Admiralty Marshal (Sheriff) or a court-appointed officer.
- Confirmation: The sale must be confirmed by the court, and the highest bid is
generally accepted unless there are compelling reasons otherwise.
- Timeframe:
The process of obtaining an order for interim sale, conducting the
valuation, advertising, and holding the auction, can typically take 3 to
6 months or even longer, depending on the court's calendar, the
complexity of the vessel, and the number of intervening parties. The sale
proceeds are then held in the court registry, substituting the vessel as
security, and distributed according to the priority of claims after final
adjudication.
- Non-Commercial Public Service Vessels: If a foreign State-owned vessel is used exclusively for non-commercial
public service (e.g., a naval auxiliary, coast guard vessel, research
vessel, diplomatic vessel, or other vessels notified by the Central
Government for non-commercial purposes), it is immune from arrest in
India under the Admiralty Act. There is no requirement for consent from the
Central Government as the statutory immunity is absolute for such vessels.
- Commercial Vessels: If a foreign State-owned vessel is used for commercial purposes
(e.g., a state-owned shipping line vessel engaged in cargo or passenger
transport for profit), it is generally not immune from arrest under
the Admiralty Act, 2017. This aligns with the "restrictive theory"
of sovereign immunity adopted by many maritime nations, which distinguishes
between sovereign acts (jure imperii) and commercial acts (jure
gestionis). The Act implies that such commercial vessels are subject to
arrest.
- Maritime Claim:
- A broad category of claims listed under Section
4 of the Admiralty Act, 2017. This list is extensive and covers almost
any dispute related to the operation, ownership, or use of a vessel. The
Act largely aligns with the International Convention on the Arrest of
Ships, 1999 (Geneva), but also incorporates additional claims as maritime
claims. These include:
- Port or harbor dues, canal, dock, or light
tolls, waterway charges and such like.
- Particular average claims (defined by
reference to the Marine Insurance Act, 1963).
- Claims by master or crew or their heirs,
dependents for wages, cost of repatriation, or social insurance
contributions.
- Insurance premiums, mutual insurance calls.
- Commission/brokerage agency fees payable by
vessel owner or demise charterer.
- Environment damage claims or threat thereof.
- Wreck removal claims.
- An action in rem (and thus arrest) for
a maritime claim is permissible if the conditions under Section 5(1)
are met, primarily that the person liable for the claim at the time it
arose is the owner or demise charterer of the vessel at the time of
arrest.
- Does not automatically "follow the
ship": If the vessel is sold to a bona fide
third-party purchaser without notice, a maritime claim (unless it's also a
maritime lien) against the previous owner generally extinguishes.
- Priority:
In a judicial sale, maritime claims (that are not liens) rank lower than
maritime liens and registered mortgages under Section 10.
- Maritime Lien:
- A special, limited class of maritime
claims recognized under Section 9(1) of the Admiralty Act, 2017.
These are a subset of maritime claims but are specifically designated with
stronger proprietary characteristics.
- It is an inchoate proprietary right
that attaches to the vessel from the moment the claim arises.
- "Follows the ship": A maritime lien travels with the vessel irrespective of change of
ownership, registration, or flag, even into the hands of a bona fide
purchaser for value without notice. This makes them a very powerful
security.
- Extinguishment: A maritime lien is only extinguished after a period of one year
(two years for crew wages) unless the vessel is arrested or seized and
such arrest or seizure has led to a forced judicial sale by the High Court
(Section 9(2)). A judicial sale conveys a clean title, transferring
the lien from the vessel to the sale proceeds.
- Priority:
Maritime liens have the highest priority in the distribution of
sale proceeds of a vessel in a judicial sale, as per Section 10(1)(a)
of the Act, ranking above registered mortgages and other maritime
claims (though below Marshal's expenses).
- Definition:
Section 2(1)(g) defines "maritime lien" to mean a maritime
claim as recognised under clauses (a) to (e) of Section 9(1) against
the owner, demise charterer, manager or operator of the vessel, which shall
continue to exist under Section 9(2).
- Specific Claims: Section 9(1) explicitly lists the specific claims that give
rise to a maritime lien:
- (a) claims for wages and other sums due to the
master, officers and other members of the vessel's complement;
- (b) claims in respect of loss of life or
personal injury;
- (c) claims for reward for salvage services;
- (d) claims for port, canal, and other waterway
dues and pilotage dues; and
- (e) claims based on tort arising out of loss
or damage caused by the operation of the vessel (excluding loss or damage
to cargo and containers carried on the vessel).
- Effect:
As discussed in Q.34, these liens "follow the ship" regardless of
ownership change and have top priority in a judicial sale. The Act provides
a comprehensive framework for their recognition, duration, and priority.
- Primary Duty: The Marshal's foremost duty is to take effective custody of
the arrested vessel and ensure its preservation. This includes
preventing its escape, deterioration, or any damage.
- Crew's Employment: The arrest does not automatically terminate the crew's
employment relationship with the owner/demise charterer. The crew continues
to be employed by the owner/demise charterer, and wages continue to accrue.
The Marshal does not become the employer of the crew.
- Marshal's Discretionary Powers (for
Preservation and Welfare):
- If the Marshal considers it necessary for
the safety or preservation of the ship, they may pay wages or
provide accommodation and sustenance to a minimum crew for such time as is
required. These expenses would then form part of the "custodia
legis" costs (Marshal's expenses), which are the absolute top
priority in a judicial sale, even above maritime liens.
- The Marshal may also, with leave of the court,
provide minimal sustenance to avoid undue hardship to the crew, even if
not strictly for the vessel's preservation, recognizing the humanitarian
aspect.
- Crew's Rights Against Owners: The crew's ongoing rights to wages, accommodation, and sustenance
are primarily enforceable against the owner/demise charterer.
- Crew's Action In Rem: Crew members whose wages are unpaid have a maritime lien
(the highest priority claim among maritime liens under Section 9(1)(a) and
Section 10 of the Act) and can file their own in rem suit against the
vessel to secure their wages and repatriation costs. This often leads to the
vessel's sale, with crew wages paid first from the proceeds after Marshal's
expenses.
- Refusal to Leave/Interference: If the crew refuse to leave (e.g., to pressure for unpaid wages) or
prevent the Marshal from taking steps necessary for the vessel's
preservation (like laying up the ship as a "dead ship" to reduce
costs), such conduct could potentially be considered contempt of court for
interfering with the Marshal's custody. However, courts generally handle
such situations with sensitivity, acknowledging the humanitarian aspect, and
often encourage an amicable resolution, including ensuring repatriation.
- Practical Resolution: Often, the court, Marshal, or intervening parties work towards
securing crew wages and arranging repatriation to allow for efficient
management or sale of the vessel. The Admiralty Act, 2017, by making crew
wages a maritime lien, provides a strong legal mechanism for crew members to
secure their dues.
- Initial Preparation: Upon receiving all necessary documents and instructions from the
client, including a valid Power of Attorney (which must be executed in
favour of any person in India who is not the lawyer dealing with the subject
matter, for the purpose of signing affidavits or handling procedural
aspects, although lawyers can sign plaints and applications), a lawyer can
draft and prepare the Plaint (suit) and the interim application for arrest.
- Filing and Hearing: The Plaint and arrest application are filed with the relevant High
Court (which has admiralty jurisdiction over the waters where the vessel is
located or expected to arrive). The application for arrest is typically
heard ex-parte (without notice to the defendant) on an urgent
basis.
- Order and Execution: If the court is satisfied that a prima facie case for a
maritime claim exists and the conditions for arrest under Section 5 of
the Admiralty Act, 2017 are met, an order for arrest and a warrant of
arrest can be issued quickly.
- Timeframe:
It is indeed possible to obtain an arrest order within 24-48 hours
(excluding public holidays) from the time the law firm receives complete
instructions and all necessary documents. Indian High Courts have
established specific procedures for urgent admiralty matters, and
applications can often be moved even outside regular court hours or on
holidays if extreme urgency is demonstrated and the Chief Justice's
permission is obtained for a special sitting.
- Preferred Forms of Security: The courts normally accept more tangible and immediately
enforceable forms of security, such as:
- Cash deposits into the court registry.
- Bank Guarantees from reputable Indian banks (or foreign bank guarantees confirmed
by an Indian bank).
- Reasons for Reluctance regarding P&I LOUs:
- Conditionality: P&I LOUs often contain conditions (e.g., relating to the
Club's rules, enforceability in a specific jurisdiction, or the need for a
final judgment before payment) that make them less than an
"unconditional undertaking."
- Direct Enforceability: Indian courts prefer security that provides a direct and
unconditional right of recourse to the claimant, without requiring further
legal action against the P&I Club in another jurisdiction.
- Legislative Intent: While not explicitly excluded by the Admiralty Act, 2017, the Act
emphasizes "security of a kind for an amount as determined by the
High Court" in Section 11. Judicial interpretation has leaned towards
immediately enforceable forms.
- General Principle: An action in rem in admiralty is primarily against the
vessel itself. Bunkers, though on board, are distinct from the vessel's hull
and machinery and may belong to a party other than the vessel owner (e.g.,
the charterer).
- Civil Procedure Code (CPC): Attachment of movable property (like bunkers) is generally governed
by the Code of Civil Procedure, 1908. If the charterer is the actual legal
owner of the bunkers, they could theoretically be attached in personam
against the charterer, subject to the procedural requirements of the CPC.
- Admiralty Act, 2017: The Admiralty Act focuses on claims against the vessel or
against its owner/demise charterer.
- Section 5(1)(a) & (b) link liability for arrest to the owner or demise charterer.
- Section 4(1)(l) considers claims for goods supplied to the vessel as maritime
claims.
- Lack of Precedence for In Rem Arrest of
Bunkers: There is no established precedence in India
for the in rem arrest of bunkers separately from the vessel to
secure a claim solely against the charterer. If the bunkers are an integral
part of the vessel's operation and are meant for the vessel's use, their
arrest separately from the vessel for a claim against the charterer would be
a novel proposition.
- Practical Difficulties: Physically identifying, valuing, and detaching bunkers without
affecting the vessel's safety and operation would be challenging.
- Judicial Power: The power to arrest a ship is an exercise of sovereign judicial
power, which is vested exclusively in the High Courts under the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017.
- Distinction between Arrest and Interim
Measures:
- Arrest:
Is an in rem action against the vessel, providing security for a
maritime claim. It is a specific power exercised by a court.
- Arbitration Interim Measures: Under Section 17 of the Arbitration and Conciliation Act, 1996,
an arbitral tribunal can grant various interim measures (e.g.,
preservation of property, security for amount in dispute). However, these
are in personam orders directed at the parties to the arbitration.
They do not extend to ordering the in rem arrest of a vessel
against a non-party (the vessel itself) or against the world at large,
which is the nature of an admiralty arrest.
- Role of Court in Aid of Arbitration: As discussed in previous questions, while an arbitrator cannot
order an arrest, a High Court can order the arrest of a vessel for the
purpose of securing an arbitral award or to facilitate arbitration
proceedings. The claimant would first obtain an arrest order from the High
Court, and then, if the dispute is subject to arbitration, the High Court
would stay the admiralty suit and refer the parties to arbitration, while
maintaining the security obtained through arrest.
- Section 5(1)(b) allows for the arrest of a vessel if the person who owned the
vessel at the time when the maritime claim arose is the owner or the demise
charterer of the vessel when the arrest is effected.
- Section 5(2),
concerning sister ship arrests, also extends to claims where the person
liable for the maritime claim, who was the owner of the vessel at the time
the claim arose, is the demise charterer of the sister vessel when
the arrest is effected.
- Maritime Liens: For claims giving rise to a maritime lien (e.g., crew wages,
salvage), Section 9(2) of the Admiralty Act, 2017, explicitly states:
"The maritime lien specified in sub-section (1) shall continue to exist
on the vessel notwithstanding any change of ownership or of registration or
of flag..." This clearly affirms that maritime liens "follow the
ship" regardless of flag changes.
- Other Maritime Claims: For other maritime claims not amounting to a maritime lien, the
High Court's admiralty jurisdiction is in rem, against the vessel.
The change of flag does not divest the court of its jurisdiction, provided
the vessel is within Indian territorial waters when arrested and the
conditions under Section 5 of the Act are met, particularly regarding the
beneficial ownership at the time of arrest and when the claim arose.
- Section 5(2) states: "The High Court may also order arrest of any other vessel for
the purpose of providing security against a maritime claim, in lieu of the
vessel against which a maritime claim has been made under this Act, subject
to the provisions of sub-section (1): Provided that no vessel shall be
arrested under this sub-section in respect of a maritime claim under clause
(a) of sub-section (1) of section 4." And Section 5(1)(b)
requires that "the person who owned the vessel at the time when the
maritime claim arose is the owner or the demise charterer of the vessel when
the arrest is effected; or (c) the claim is against the owner, demise
charterer, manager or operator of the vessel and is secured by a maritime
lien..."
- Judicial Interpretation: Indian courts have generally adopted a substantive approach,
looking beyond the registered owner to identify the true entity that
ultimately controls and benefits from the operation of the vessels. This can
involve examining corporate structures, common directors, shareholders, and
operational control. The aim is to prevent parties from evading liability by
simply transferring legal ownership to shell companies while retaining
effective control. The Supreme Court has, in various judgments, affirmed
that the beneficial owner is the person who has the "right to use and
enjoy" the vessel, effectively equating it with the person who holds
controlling interest and is liable for the claim. Piercing the corporate
veil (as discussed in Q.31) is often considered in this context to establish
beneficial ownership.
- Contractual Disputes: If the claim arises from a breach of a contract for sale of the
vessel for recycling, it might fall under Section 4(1)(k) (dispute
arising out of a contract for the sale of the vessel).
- Environmental Damage: If the recycling process causes environmental damage, it would be
covered under Section 4(1)(o) (claims for environment damage).
- Wages/Dues:
Claims for outstanding wages or other dues to crew members while the vessel
was being delivered for recycling would be covered under Section 4(1)(a)
(crew wages), which also constitutes a maritime lien.
- Goods/Services: Claims for services rendered or goods supplied related to the
vessel prior to or during its delivery for recycling could fall under Section
4(1)(f).
- Maritime Claims: Many claims a slot or voyage charterer might have (e.g., loss or
damage to cargo carried, delay in delivery, breach of contract of carriage)
are explicitly listed as maritime claims under Section 4 of the Admiralty
Act, 2017, such as Section 4(1)(g) ("agreement relating to
the carriage of goods or passengers on board a vessel, whether contained in
a charter party or otherwise") or Section 4(1)(d) ("claims
for loss or damage caused by the operation of the vessel, other than loss or
damage to cargo and containers carried on the vessel").
- Arrest Conditions: The key condition for arrest under Section 5(1) is that the
person who was liable for the claim at the time it arose is the owner or
demise charterer of the vessel at the time of arrest. So, if the
owner/demise charterer is the party liable to the slot or voyage charterer
for a maritime claim, arrest is possible.
- Section 1(2)
states that the Act "shall apply to every vessel, irrespective of the
place of residence or domicile of the owner". This implies a universal
application.
- The essence of admiralty in rem
jurisdiction is that the claim attaches to the vessel itself, and the
jurisdiction is exercised when the vessel is found within the court's
territorial reach. The cause of action does not necessarily have to
arise within Indian waters.
- The High Court's jurisdiction under Section
3(1) extends to "all maritime claims under this Act" and is
"exercisable over the waters up to and including the territorial waters
of their respective jurisdictions." This means if a maritime claim
arises anywhere in the world, and the offending vessel (or a sister vessel)
enters the territorial waters under the jurisdiction of an Indian High
Court, it can be arrested.
1. Is India a signatory to any of the International Conventions on ship
arrest? If so, which one? Is there a legislature for ship arrest?
While
India is not a signatory to the International Convention relating to the
Arrest of Seagoing Ships, Brussels, 1952, or the International Convention on the
Arrest of Ships, 1999 (Geneva Arrest Convention), the principles enshrined
in these conventions have significantly influenced Indian maritime law.
The
primary legislation governing ship arrest and maritime claims in India is the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017, which came into
force on April 1, 2018. This Act repealed the antiquated Admiralty Courts
Act of 1861. The Act grants Admiralty jurisdiction to the High Courts
over maritime claims, extending to the territorial waters of their respective
jurisdictions.
The
Supreme Court of India, in landmark judgments like M.V. Elisabeth vs. Harwan
Investment & Trading Pvt. Ltd., Goa, and M.V. Sea Success I, has
held that the principles underlying both the 1952 Brussels Convention and the
1999 Geneva Arrest Convention are part of the common law of India and are
applicable for enforcing maritime claims against foreign ships, provided they
are not inconsistent with domestic legislation. The Admiralty Act, 2017, now
codifies many of these principles.
2. For what types of claims can you arrest a ship?
Section
4 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, provides an exhaustive list of maritime claims over which High Courts
can exercise their Admiralty jurisdiction. This list largely aligns with the
maritime claims defined in the 1952 Brussels and 1999 Geneva Arrest Conventions,
but it also includes certain additional claims specific to the Indian context.
The
additional claims under the 2017 Act include:
It's
crucial to note a significant divergence in the 2017 Act regarding the
enforcement of maritime claims by an action in rem. Unlike Article 3(2)
of the 1999 Arrest Convention, the Indian Act does not explicitly permit the
arrest of vessels owned by time charterers and voyage charterers for
maritime claims against them. This omission can lead to complexities in
enforcing maritime claims against such charterers in India. The interpretation
and application of this aspect, particularly concerning the arrest of ships and
sister ships for claims against time charterers, have been subjects of judicial
scrutiny, with some issues pending before High Courts, such as the Bombay High
Court.
Section
5(1) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, specifies the conditions under which a High Court may order the arrest
of a vessel within its jurisdiction for providing security against a maritime
claim:
Section
5(2) of the Act permits sister-ship arrests,
meaning a vessel other than the one against which the maritime claim arose can
be arrested, provided it is beneficially owned by the same person who is liable
for the claim. The interpretation of "sister-ship" will, however, be
subject to the conditions laid out in Section 5(1).
Section
6 of the Admiralty Act also confers Admiralty Jurisdiction in personam
for certain maritime claims, subject to restrictions in Section 7. For
claims arising from a collision and related incidents, an in personam action can
be initiated against the defendant only if the cause of action arises wholly or
partly in India, or if the defendant, at the time of commencing the action,
resides, carries on business, or personally works for gain in India.
The
Admiralty Act, 2017, defines 'maritime lien' under Section 2(1)(g) and
recognizes certain claims as maritime liens, detailing their priorities in
Section 9. It also sets out the limitation period for maritime liens,
stating that they extinguish after one year unless the vessel is arrested
and seized, leading to a forced sale by the High Court. However, for maritime
liens related to claims for wages or other employment-related payments
(including repatriation costs and social insurance contributions), the
limitation period is two years. This limitation period runs continuously,
excluding any time the vessel was under arrest or seizure.
Section
10 of the Admiralty Act, 2017, establishes the priority
of maritime claims in Admiralty proceedings. Maritime liens hold the highest
priority, followed by registered mortgages and charges, and then all other
claims. If there are multiple claims within the same priority category, they
rank equally, with salvage claims ranking in inverse order of the time they
accrued.
It
is crucial to understand that the list of maritime claims in the Admiralty Act,
2017, is a closed list. A claim must fall within one of the specified
categories to be the subject of an action in rem and allow for the arrest of a
ship. There must be a connection between the claim and a particular ship or
ships (either the ship itself or a sister ship). It's not sufficient for the
claim to be against a ship owner generally, or if the person liable merely
happens to own a ship without the claim being related to that specific ship.
3. What is the procedure for an arrest?
The
procedure for a ship arrest in India generally involves the following steps:
4. How is the Defendant named in an Admiralty Suit?
The
defendant in an Admiralty Suit for ship arrest is typically named as follows:
M.V.
XXXXXXXX, vessel flying a xxxxx flag together with her hull, tackle, engines,
machinery, paraphernalia and all her appurtenant on board presently lying and
being at stream/port and harbour/jetty of xxxx, xxxxx and all persons
claiming to be interested in the vessel ...DEFENDANT.
5. Is it necessary that the ship should be in Indian waters for filing of
an Admiralty Suit?
Yes,
it is necessary that the ship be within Indian waters for an Admiralty Suit to be filed and for the court to exercise its
jurisdiction for arrest. The vessel does not necessarily need to be berthed; it
can be anywhere within the Indian territorial waters, which extend up to 12
nautical miles from the shore. The presence of the res (the ship)
within the court's jurisdiction is a fundamental requirement for an action in
rem.
6. Can a ship be arrested if she is already beached for demolition?
According
to Section 2(1)(l) of the Admiralty (Jurisdiction and Settlement of Maritime
Claims) Act, 2017, a "vessel" includes any ship, boat, sailing
vessel, or other description of vessel used or constructed for use in navigation
by water, whether propelled or not, and specifically includes a barge, lighter,
other floating vessel, hovercraft, off-shore industry mobile unit, and a vessel
that has sunk or is stranded or abandoned, and the remains of such a vessel.
However,
the Explanation to Section 2(1)(l) clarifies that a vessel shall not
be deemed to be a vessel for the purposes of this clause when it is broken up to
such an extent that it cannot be put into use for navigation, as certified by a
surveyor.
Therefore,
if a ship is already beached for demolition and has been broken up to an extent
that a surveyor certifies it cannot be used for navigation, it is no longer
considered a "vessel" under the Act, and an Admiralty action for its
arrest cannot be initiated.
7. Which are the High Courts in India that are vested with Admiralty
jurisdiction and which court is most preferred for ship arrest?
The
following High Courts in India are vested with Admiralty jurisdiction under the
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017:
While
all these High Courts possess Admiralty jurisdiction, the Bombay High Court
and the Gujarat High Court are often considered more preferred for ship
arrest due to their proximity to major ports (Mumbai/Nhava Sheva and
Kandla/Mundra, respectively) and their extensive experience in handling
Admiralty matters. However, the choice of court ultimately depends on where the
vessel is located within Indian territorial waters.
8. Can an Indian flag vessel be arrested?
Yes,
a ship flying any flag, including an Indian flag vessel, can be arrested in India provided the conditions for arrest under the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017, are met. The
nationality of the vessel does not exempt it from the Admiralty jurisdiction of
Indian High Courts.
9. Can a vessel be detained without going to Court?
Under
Section 443(2) of the Indian Merchant Shipping Act, 1958, a foreign ship
that has occasioned damage can be temporarily detained to prevent its departure
from Indian waters. However, such detention is typically a preliminary measure,
and a formal application must subsequently be made to the High Court to
obtain a judicial order for its continued detention or arrest under the
Admiralty Act, 2017, to provide security for a maritime claim. Without a court
order under the Admiralty Act, the detention under the Merchant Shipping Act is
usually temporary and aimed at ensuring the vessel remains within jurisdiction
until formal legal proceedings can be initiated.
10. What is action in rem and action in personam?
The
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, clearly
distinguishes between actions in rem and actions in personam:
A key characteristic of an action in rem is that it is typically
initiated without directly naming the owner as a defendant. However, the owner
or any interested party can appear and defend the action. If the foreign owner
appears and provides security (bail) for the ship's release, they effectively
submit to the court's jurisdiction, and the proceedings can then continue in
personam against them. If the owner does not appear, the ship can be condemned
and sold to satisfy the claims.
Key
Differences and Interplay:
The
concept of action in rem, while a procedural device developed by common law
courts to overcome difficulties in serving defendants, is a powerful tool to
enforce maritime claims. When a ship is arrested in an action in rem and the
owner appears and furnishes security, the proceedings often effectively convert
into an action in personam against the owner, with the security substituting the
ship.
It
is important to note that Indian High Courts, as superior courts of record,
possess inherent and plenary powers. Unless expressly or impliedly barred, they
have broad jurisdiction, including the power to make interlocutory orders like
arrest and attachment before judgment, to ensure justice is rendered.
Wrongful
Arrest: A person who maliciously and without reasonable and
probable cause procures the arrest of a ship by Admiralty proceedings may be
liable to pay damages. However, merely an erroneous or unjustified arrest may
not necessarily lead to damages, though it might result in costs being awarded
against the arresting party. The court would need to be satisfied that the
arrest was motivated by mala fides (bad faith) or crassa negligentia
(gross negligence) for damages to be awarded.
Safeguards: The rules governing Admiralty jurisdiction include safeguards for
property owners. For instance, a party wishing to prevent arrest can file a caveat
against arrest in the Admiralty Registry. While a caveat doesn't absolutely
prevent arrest, the caveator can seek discharge of the warrant and damages if
the arresting party cannot show "good and sufficient reason" for the
arrest. Additionally, for an action in rem for wages against a foreign ship
registered in a country with a consulate in the High Court's jurisdiction, prior
notice of the arrest must be given to the consul concerned.
The
Supreme Court, in cases like Videsh Sanchar Nigam Limited v. M.V. Kapitan Kud,
has affirmed the court's power to demand security for the release of an arrested
vessel, emphasizing the need to ensure executability of a potential decree,
especially for foreign ships that might leave Indian jurisdiction. The court can
also impose conditions, such as requiring an undertaking for damages if the
arrest is later found to be wrongful.
The
primary aim of arrest is to obtain security for the claim. Once security is
provided, the ship is usually released, and the legal proceedings continue to
adjudicate the maritime claim.
Here
are 15 additional questions and detailed answers on ship arrest and release in
India, building upon the existing legal framework and common issues not
extensively covered:
11. Can a vessel be arrested for a claim arising out of a breach of a
shipbuilding contract?
Answer: Yes, a claim arising out of a breach of a shipbuilding contract can be
considered a maritime claim under the Admiralty (Jurisdiction and Settlement of
Maritime Claims) Act, 2017. Specifically, Section 4(1)(f) covers "any
agreement relating to the construction of a vessel, including any claim for the
building, equipping or repairing of a vessel or for dock charges, dues or port
charges or for the alteration or enlargement of a vessel." Therefore, if
there's a breach of a shipbuilding contract (e.g., non-payment for construction,
defects in construction), an action in rem can be initiated, and the vessel (if
completed or partially completed to a stage where it qualifies as a
"vessel" under the Act) can be arrested.
12. What is the role of a P&I Club Letter of Undertaking (LOU) in
securing the release of an arrested vessel? Is it mandatory for the claimant to
accept it?
Answer: P&I Club Letters of Undertaking (LOUs) are a common and commercially
preferred form of security offered by shipowners to secure the release of an
arrested vessel. An LOU is essentially a contractual undertaking by the P&I
Club (Protection and Indemnity Club) to pay to the claimant's solicitors any sum
that may be awarded by a court or arbitration, up to a specified maximum, in
consideration for the claimant refraining from arresting or releasing the
vessel.
While
LOUs are widely accepted in international maritime practice due to their speed
and efficiency, it is not mandatory for the claimant to accept an LOU in
India. The claimant can insist on other forms of security, such as a cash
deposit into court or a bank guarantee. The court, however, has the discretion
to determine if the proposed security, including an LOU, is
"sufficient" or "satisfactory" for the release of the
vessel, balancing the interests of both parties. Courts generally encourage
commercially viable and reputable forms of security to facilitate trade, but the
ultimate decision rests on the court's assessment of the security's adequacy and
the claimant's reasonable objections. Recent cases often involve scrutiny of
clauses within LOUs, such as sanctions clauses, and courts assess their impact
on the enforceability of the undertaking.
13. Can a vessel be arrested for a claim that is subject to a foreign
arbitration agreement?
Answer: This is a nuanced area in Indian Admiralty law. While Section 5 of the
Admiralty Act, 2017, focuses on providing security for a maritime claim that is the
subject of an admiralty proceeding, Indian courts have, in certain
circumstances, permitted the arrest of a vessel even when the underlying dispute
is subject to a foreign arbitration agreement.
The
Supreme Court in M.V. Elisabeth (though pre-2017 Act) recognized the
broad inherent powers of Indian High Courts to secure a claim. Subsequently, the
Arbitration and Conciliation Act, 1996, especially Part I (for arbitrations
seated in India) and Part II (for enforcement of foreign awards), plays a role.
If
the arbitration is seated in India, a court can grant interim measures,
including arrest of a vessel, under Section 9 of the Arbitration Act. For
foreign-seated arbitrations, the position has evolved. While earlier judgments
often linked arrest to substantive proceedings in India, the trend is now to
recognize the power to grant interim relief to secure a foreign arbitration
claim, especially under Section 9 if the court can establish jurisdiction over
the defendant (e.g., through the presence of the vessel). However, the claimant
would typically be required to undertake to pursue the claim in the agreed
arbitration forum. The 2017 Act has somewhat streamlined this by linking arrest
to an "admiralty proceeding," but judicial interpretation often
permits an arrest as security for an impending or ongoing arbitration.
14. What are the potential consequences of a wrongful or excessive ship
arrest?
Answer: The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act,
2017, specifically addresses wrongful arrest. Section 11 of the Act
provides for compensation for wrongful arrest, unjustified arrest, or
excessive security demanded.
If
the court finds that the arrest was:
The
court may direct the claimant to pay damages and costs to the defendant.
This compensation can cover losses incurred by the shipowner due to the
detention, such as loss of earnings, port charges, crew wages, and legal costs.
The undertaking furnished by the claimant at the time of seeking the arrest (to
pay damages in case of wrongful arrest) serves as the basis for such a claim.
Unlike the older position that required proof of malice or gross negligence, the
2017 Act, by virtue of Section 11, makes it easier for a defendant to claim
damages if the arrest is found to be unjustified or excessive, as the
undertaking is generally unconditional.
15. Can an arrested vessel be sold by court order even before the final
judgment of the claim? What is this process called?
Answer: Yes, an arrested vessel can be sold by court order even before the final
judgment of the claim. This process is known as an interlocutory sale or pendente
lite sale (sale pending litigation).
The
court may order an interlocutory sale under various circumstances, including:
The
Admiralty Act, 2017, particularly Sections 10 and 11, implicitly provides for
such sales by outlining the distribution of proceeds from a vessel's sale. The
court will typically appoint a Marshal or a Commissioner to conduct the sale,
usually by public auction. The proceeds of the sale are then deposited into
court, and their distribution is decided later based on the priorities of the
various maritime claims. This ensures that assets are preserved and available to
satisfy claims without undue expense or loss of value during prolonged
litigation.
16. What is the implication of the Insolvency and Bankruptcy Code (IBC)
on ship arrests in India?
Answer: The interplay between the Admiralty (Jurisdiction and Settlement of
Maritime Claims) Act, 2017, and the Insolvency and Bankruptcy Code (IBC), 2016,
is a complex and evolving area.
When
a Corporate Debtor (which could be a shipping company owning the vessel) is
subjected to a Corporate Insolvency Resolution Process (CIRP) under the IBC, a moratorium
under Section 14 of the IBC comes into effect. This moratorium generally
prohibits the institution or continuation of suits or proceedings against the
corporate debtor, including enforcement of any security interest.
Key
implications:
This
area is still subject to judicial interpretation, and the specific facts of each
case, especially the timing of the arrest vis-ŕ-vis the CIRP commencement, are
critical.
17. Can a vessel be arrested for claims related to bunker supplies? Are
these considered maritime liens in India?
Answer: Yes, a vessel can be arrested for claims related to unpaid bunker
supplies. Section 4(1)(l) of the Admiralty (Jurisdiction and Settlement of
Maritime Claims) Act, 2017, explicitly recognizes claims for "goods,
materials, perishable or non-perishable provisions, bunker fuel,
equipment (including containers), supplied or services rendered to the vessel
for its operation, management, preservation or maintenance including any
fee" as maritime claims.
However,
it is crucial to distinguish between a maritime claim and a maritime
lien. While an unpaid bunker claim is a maritime claim that can lead to the
arrest of a vessel, it is not generally recognized as a maritime lien under
Indian law. Section 9 of the Admiralty Act, 2017, lists specific claims that
give rise to maritime liens (e.g., wages, salvage, damage by a ship, port dues).
Unpaid bunkers, being "necessaries," typically fall under the category
of statutory rights in rem, meaning they allow for arrest but do not attach to
the vessel irrespective of change of ownership in the same way a maritime lien
does, and their priority is lower than maritime liens. The liability for bunker
claims often hinges on who ordered the bunkers (owner or charterer) and whether
the master's signature on the bunker delivery note binds the vessel.
18. What is the significance of "beneficial ownership" in the
context of sister-ship arrest?
Answer: The concept of "beneficial ownership" is critical for
effecting a sister-ship arrest under Section 5(2) of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017. This section
allows for the arrest of a vessel "in lieu of the vessel against which a
maritime claim has been made," provided certain conditions in Section 5(1)
are met.
For
a sister-ship arrest, it must be shown that the vessel sought to be arrested is beneficially
owned by the person who is liable for the maritime claim relating to the
original vessel. The Supreme Court of India, in cases such as M.V. Geowave
Commander (though this case predates the 2017 Act, its principles remain
relevant for interpretation), has delved into the meaning of "beneficial
ownership." It emphasizes that beneficial ownership is not limited to legal
title or registered ownership. Instead, it refers to the person or entity who effectively
controls and uses the vessel and gains benefit from its operations, even if
they are not the registered owner. This could include a bareboat charterer.
However,
the 2017 Act's explicit language in Section 5(1) referring to "owner"
or "demise charterer" at the time the claim arose and at the time of
arrest, has led to ongoing discussions on whether claims against mere time
charterers or voyage charterers can support a sister-ship arrest if they are not
the "beneficial owner" in the sense of having control equivalent to a
demise charterer. This is an area where judicial interpretation continues to
refine the scope.
19. What is the process for releasing an arrested vessel in India?
Answer: The release of an arrested vessel in India can typically be secured in
one of the following ways, as generally provided for in High Court Admiralty
Rules and reflected in Section 5 of the Admiralty Act, 2017 (for providing
security):
Once
security is provided or the claim is settled/dismissed, an application is made
to the court for the release order. Upon the court's order, the Warrant of
Arrest is withdrawn, and notices are sent to the port and customs authorities to
allow the vessel to depart.
20. Can a ship be re-arrested in India for the same claim after it has
been released?
Answer: Generally, no, a ship cannot be re-arrested in India for the same
claim if it has been released after security has been provided or the claim has
been satisfied. The purpose of the arrest is to obtain security for the
claim. Once adequate security is provided (whether through a cash deposit, bank
guarantee, or LOU), the res (the ship) is replaced by that security, and
the action continues against the security. Re-arresting the vessel for the same
claim would be considered an abuse of process.
However,
exceptions might arise in very limited circumstances, for example:
21. What is the role of the undertaking as to damages given by the
claimant during arrest proceedings?
Answer: The undertaking as to damages is a mandatory and crucial component
of the ship arrest procedure in India. When a claimant applies for an ex-parte
(without notice to the defendant) order of arrest, they are required to furnish
an undertaking in writing, or through their advocate, to pay such sum by way
of damages as the court may award as compensation in the event the defendant
sustains prejudice due to such order.
Significance:
As
highlighted in the updated answer to Question 9 (previous set), the 2017 Act and
recent judicial pronouncements have generally moved away from requiring proof of
malice for damages under the undertaking, making it easier for a defendant to
claim compensation if the arrest is simply found to be unjustified or excessive.
22. Are there any specific requirements for service of the arrest warrant
on board the vessel?
Answer: Yes, the service of the Warrant of Arrest is a critical step. While the
exact procedural rules may vary slightly between the Admiralty Rules of
different High Courts, generally:
Proper
service is essential for the validity of the arrest and to ensure that the
vessel and its crew are aware of the court order restricting its movement.
23. Can a maritime lien arise in India from foreign law? How does this
impact arrest?
Answer: This is a complex area, but Indian courts have generally shown a
willingness to recognize foreign maritime liens if they are validly
created under the lex causae (the law governing the claim, often the law
of the flag state or the place where the lien arose).
The
Supreme Court, in M.V. Elisabeth, recognized that Indian courts
administer maritime law as a part of the common law, drawing from international
conventions and principles. While Indian domestic law defines maritime liens
under Section 9 of the Admiralty Act, 2017, courts may, in principle, recognize
and enforce a maritime lien created under foreign law, even if that specific
claim would not constitute a maritime lien under Indian law, provided it is not
contrary to Indian public policy or a specific statutory prohibition.
If
a foreign maritime lien is recognized, it can significantly impact an arrest
because maritime liens "travel with the ship" even through changes in
ownership and enjoy the highest priority in the distribution of sale proceeds.
However, the exact scope and enforceability of foreign maritime liens in India
can be subject to rigorous scrutiny by the courts, especially concerning
conflict of laws principles.
24. What are the typical court fees and disbursements involved in
initiating a ship arrest in India?
Answer: The court fees and disbursements for initiating a ship arrest in India
can vary depending on the specific High Court, the value of the claim, and the
complexity of the case. However, typical components include:
It's
advisable for claimants to obtain a detailed estimate from their legal counsel,
as the initial upfront costs can be considerable before the vessel is arrested
and security is obtained. Some High Courts may also require an initial deposit
to cover Marshal's expenses.
25. What are the current trends or recent developments in Indian
Admiralty law concerning ship arrest?
Answer: Recent trends and developments in Indian Admiralty law, particularly
concerning ship arrest, often focus on:
26. What is a maritime lien?
A
maritime lien is a privileged claim upon maritime property, most commonly a
vessel, that secures certain types of claims. It is a unique feature of
admiralty law, distinct from common law liens. A maritime lien is
"inchoate" from the time the events giving rise to it occur, meaning
it attaches to the vessel automatically. A crucial characteristic is that it
"travels with the ship" into anyone's possession, even a bona fide
purchaser for value without notice, making it a powerful security interest. It
is perfected by legal process, typically an action in rem leading to the arrest
and eventual judicial sale of the vessel.
Under
Section 2(1)(g) of the Admiralty (Jurisdiction and Settlement of Maritime
Claims) Act, 2017, "maritime lien" is defined as a maritime claim
against the owner, demise charterer, manager, or operator of the vessel referred
to in clauses (a) to (e) of sub-section (1) of Section 9, which shall continue
to exist under sub-section (2) of that section.
The
claims recognized as giving rise to a maritime lien under Section 9(1) of the
Admiralty Act (2017) are limited to the following:
Section
9(2) of the Act specifies that a maritime lien shall continue to
exist on the vessel notwithstanding any change of ownership or of registration
or of flag and shall be extinguished after expiry of a period of one year
unless, prior to the expiry of such period, the vessel has been arrested or
seized and such arrest or seizure has led to a forced sale by the High Court.
However, for a claim for wages and other sums due to the master, officers, and
other members of the vessel, the period shall be two years from the date on
which the wage, sum, cost of repatriation, or social insurance contribution
falls due or becomes payable.
Key
characteristics of maritime liens:
The
doctrine of maritime lien is premised on the idea that the ship itself is the
wrongdoer ("the offending thing") and must make good for the loss,
damage, or harm it caused.
27. What do you mean by a vessel and sister-ship?
Vessel:
Section
2(1)(l) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act,
2017, defines "vessel" broadly. It
"includes any ship, boat, sailing vessel or other description of vessel
used or constructed for use in navigation by water, whether it is propelled or
not, and includes a barge, lighter or other floating vessel, a hovercraft, an
off-shore industry mobile unit, a vessel that has sunk or is stranded or
abandoned and the remains of such a vessel."
Explanation: The Act clarifies that "A vessel shall not be deemed to be a vessel
for the purposes of this clause, when it is broken up to such an extent that it
cannot be put into use for navigation, as certified by a surveyor."
The
definition is expansive, covering a wide range of watercraft and even
non-conventional units like hovercrafts and offshore industry mobile units
(e.g., oil rigs), and even derelict vessels.
Judicial
interpretations from earlier cases, like Steedman v. Scofield [1992] 2
Lloyd's Rep .163, remain relevant for understanding the phrase "used in
navigation." As Mr. Justice Sheen explained, "Navigation is the
nautical art or science of conducting a ship from one place to another... The
word 'navigation' is also used to describe the action of navigating or ordered
movement of ships on water. Hence 'navigable waters' means waters on which ships
can be navigated. To my mind, the phrase 'used in navigation' conveys the
concept of transporting persons or property by water to an intended
destination." This means mere movement on water is not navigation; there
must be a planned or ordered movement from one place to another.
The
"Dead Vessel" doctrine, under which a vessel permanently withdrawn
from use for navigational purposes is not considered a "vessel" for
admiralty jurisdiction, is generally recognized. However, a vessel undergoing
repairs or modifications to return to service, or one in dry dock, is typically
still considered a "live ship."
Sister-ship:
A
"sister-ship" is a vessel that is beneficially owned by the same
person who is liable for the maritime claim that arose in relation to another
specific vessel.
The
concept of sister-ship arrest is enshrined in Section 5(2) of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017. This provision
allows for the arrest of a vessel in lieu of the "offending" vessel,
provided that the person who was the owner or demise charterer of the
vessel against which the maritime claim arose is also the owner or demise
charterer of the vessel sought to be arrested at the time the maritime
claim arose and at the time the action is brought (i.e., at the time of arrest).
The
critical aspect here is "beneficial ownership." While the 2017 Act
specifically refers to "owner or demise charterer," Indian courts,
prior to and post-2017 Act, have often looked beyond mere registered ownership
to identify the true beneficial owner. The Supreme Court in M.V. Elisabeth
(a pre-2017 Act case but foundational) established the broad scope of admiralty
jurisdiction. In cases like m.v. Mariner IV v. Videsh Sanchar Nigam Limited,
the Bombay High Court upheld the jurisdiction to arrest a "sister
ship."
The
Bombay High Court, in m.v. Sea Success I v. Liverpool and London Steamship
Protection and Indemnity Association Ltd., emphasized that a subsidiary
company and a parent company are distinct legal entities. It affirmed that
"ownership of a ship is denoted by the concept of the owner of the shares
in a ship." The court stated that merely because a parent company owns a
100% subsidiary, it does not mean the parent company owns the subsidiary's
assets (including ships). Therefore, to justify a sister-ship arrest based on
beneficial ownership, the plaintiff must plead material facts disclosing such
beneficial ownership, not just draw an inference that is legally unsustainable.
The Supreme Court in the m.v. Sea Success I matter affirmed that such
issues of beneficial ownership require consideration at an appropriate stage.
The
key takeaway is that for a sister-ship arrest, the claimant must demonstrate
that the entity liable for the claim against the "offending vessel" is
the same entity that beneficially owns the "sister vessel" sought to
be arrested, typically referring to the registered owner or the demise charterer
at both the time the claim arose and the time of the arrest. The de facto
control and benefit from the vessel's operation, rather than just corporate
structures, are crucial for proving beneficial ownership in this context.
28. What is the limit of Indian territorial waters?
Under
Section 3(2) of The Territorial Waters, Continental Shelf, Exclusive Economic
Zone and Other Maritime Zones Act, 1976, "the limit of the territorial
waters is the line every point of which is at a distance of twelve nautical
miles from the nearest point of the appropriate baseline."
Therefore,
Indian territorial waters extend up to 12 nautical miles from the
baseline.
The
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, in Section
2(1)(k), defines "territorial waters" to have the same meaning as
assigned to it in the Territorial Waters, Continental Shelf, Exclusive Economic
Zone and Other Maritime Zones Act, 1976.
Furthermore,
Section 3(1) of the Admiralty Act, 2017 specifies that the admiralty
jurisdiction of a High Court "shall be exercisable up to the limit of the
territorial waters of India." However, the proviso to Section 3(1)
states, "Provided that the Central Government may, by notification, extend
the jurisdiction of the High Court up to the limit as defined in section 2 of
the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other
Maritime Zones Act, 1976." This implies that while the default is
territorial waters, the Union Government has the power to extend the
jurisdiction to the Exclusive Economic Zone (EEZ) or other maritime zones.
29. What do you mean by necessaries supplied to a vessel?
"Necessaries
supplied to a vessel" refers to goods, materials, provisions, fuel,
equipment, or services essential for the vessel's operation, management,
preservation, or maintenance.
While
the term "necessaries" is not explicitly defined in the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017, the concept is
comprehensively covered under Section 4(1)(l) as a maritime claim. This
section includes claims for:
This
broad wording effectively covers what traditionally falls under
"necessaries" in admiralty law. It encompasses a wide range of
supplies and services critical for a vessel's normal functioning and
seaworthiness. Claims for unpaid necessaries are a common ground for ship arrest
in India.
It's
important to reiterate that while a claim for necessaries is a maritime claim
supporting arrest, it generally does not give rise to a maritime lien
under Indian law (refer to Section 9 of the Act which lists maritime liens).
This means their priority in a judicial sale is lower than that of maritime
liens.
30. What do you mean by a one-ship company?
A
"one-ship company" is a common business structure in the shipping
industry where a single company is incorporated to own and register only one
vessel. While multiple ships may be financed by a common source and managed as a
fleet, each ship is typically held by a separate, distinct legal entity (a
one-ship company). These companies are often registered in jurisdictions that
may not require public disclosure of their shareholders.
This
arrangement has historically presented challenges for claimants (like cargo
interests, bunker suppliers, or crew members) attempting to enforce claims,
especially when seeking to arrest a "sister ship." The perceived issue
is that by compartmentalizing ownership, it can be difficult to establish common
beneficial ownership across a fleet for sister-ship arrests.
However,
Indian courts, like many maritime jurisdictions, recognize the "one-ship
company" as a legitimate business arrangement. In the absence of
evidence of fraud or sham transactions, the corporate veil will generally not
be lifted to look behind the "one-ship company" structure to
identify the ultimate beneficial owner of the company as the beneficial owner of
the ship. In law, the beneficial owner of the ship is the company itself, which
is a separate and distinct legal entity or person from its shareholders or the
beneficial owner of the company.
Therefore,
for a sister-ship arrest, proving that the same entity is the beneficial owner
or demise charterer of both vessels (the "offending" vessel and the
"sister-ship") becomes crucial. This typically requires demonstrating
that the same person (individual or corporate entity) actually controls and
benefits from both vessels, going beyond the mere fact that a group of companies
may share common ultimate shareholders. The legal principle of separate
corporate personality is generally respected, unless there is clear evidence of
fraud or abuse of the corporate structure specifically to evade liability.
31. Can an Admiralty court pass an order of arrest even if the vessel is
outside that state's jurisdiction but within Indian territorial waters?
This
is a critical point clarified by the Admiralty (Jurisdiction and Settlement of
Maritime Claims) Act, 2017.
No,
a High Court exercising admiralty jurisdiction in India cannot pass an order of
arrest for a vessel that is outside its specific territorial jurisdiction, even
if the vessel is within general Indian territorial waters but beyond the
specific High Court's maritime limits.
Section
3(1) of the Admiralty Act, 2017, states that "the
admiralty jurisdiction of a High Court shall be exercisable up to the limit of
the territorial waters of India," but this jurisdiction is vested in
specific High Courts. Section 2(1)(e) defines "High Court"
to mean "any of the High Court of Calcutta, High Court of Bombay, High
Court of Madras, High Court of Karnataka, High Court of Gujarat, High Court of
Orissa, High Court of Kerala, High Court of Judicature at Hyderabad for the
State of Telangana and the State of Andhra Pradesh or any other High Court, as
may be notified by the Central Government for the purposes of this Act."
While
the Act confers admiralty jurisdiction on these specific High Courts, the
general principle of civil procedure applies where the court must have
territorial jurisdiction over the res (the vessel) to effect an arrest.
This means the vessel must be physically present within the maritime limits of
the High Court where the admiralty suit is filed at the time of the arrest
application.
A
High Court, for instance, cannot order the arrest of a ship located in the
territorial waters off the coast of Gujarat if the suit is filed in the Bombay
High Court, unless the ship subsequently enters the Mumbai High Court's
territorial limits. The jurisdiction is geographically limited to the maritime
zones falling within the respective High Court's judicial territory.
32. What is the Effect of arrest of vessel?
The
arrest of a vessel is a powerful interlocutory remedy in admiralty proceedings,
fundamentally altering the vessel's legal status. The effect of arrest is as
follows:
33. How quickly can an arrest be effected?
The
speed at which an arrest can be effected in India depends on several factors,
including:
Generally,
if all documents are in order and the court is willing to grant an ex-parte
order:
In
practice, for a well-prepared claim, an arrest can often be effected within
24 to 72 hours from the decision to proceed with an arrest, provided the
vessel is within the High Court's jurisdiction and the court is sitting.
34. What expenses are incurred?
The
expenses involved in initiating and maintaining a ship arrest in India typically
include:
Claimants
should obtain a detailed breakdown of estimated costs from their legal counsel
as early as possible.
35. How do you obtain a vessel's release?
The
release of an arrested vessel in India is primarily governed by the principles
laid down in Section 5 of the Admiralty (Jurisdiction and Settlement of Maritime
Claims) Act, 2017, and the specific Admiralty Rules of the concerned High Court.
Release can usually be obtained promptly if the requirements are satisfied.
A
vessel can be released from arrest under the following common conditions:
Process
for Release:
Once
the conditions for release are met, an application is made to the High Court for
an order of release. Upon the court passing the order:
Poundage:
The
term "poundage" refers to a percentage-based fee payable to the
Sheriff/Marshal of the court upon the satisfaction of a decree or order, often
when money is realized through execution, compromise, or settlement, or upon the
release of an arrested asset. In the Bombay High Court (Original Side) Rules,
Rules 474 to 476 govern Sheriff's poundage, typically 1% on the amount levied or
secured.
The
current understanding, based on judicial pronouncements, is that poundage is
generally payable if the vessel has been arrested and the matter is subsequently
resolved through settlement or security provision. This is because the arrest
facilitated the plaintiff's ability to secure a settlement or security.
Therefore, Poundage is usually payable at 1% of the claim amount or the
settled amount (or the security amount), whichever is less, before the vessel is
finally released. This fee contributes to the court's expenses for the
services of the Sheriff/Marshal.
21.
Who can file an Admiralty suit for ship arrest in India?
Any
person, whether an Indian citizen or a foreign national, or any entity, whether
incorporated in India or abroad, can file an Admiralty suit in a competent High
Court in India if they have a "maritime claim" as defined under Section
4 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.
The claimant does not need to have a direct contractual relationship with the
vessel owner, as admiralty jurisdiction often relies on the in rem nature
of the claim against the vessel itself. The key requirement is the existence of
a valid maritime claim and the presence of the vessel within the High Court's
territorial jurisdiction.
36.
What are the grounds for a wrongful arrest and what are its consequences?
A
"wrongful arrest" occurs when a vessel is arrested without reasonable
and probable cause, or for an excessive amount, or where the claimant acted with
malice or gross negligence.
Section
11 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, specifically addresses wrongful arrest. It states that the High Court
may:
The
consequences of a wrongful arrest for the claimant can be significant:
The
onus is on the defendant to prove that the arrest was wrongful, malicious, or
excessive.
37.
Can a vessel be arrested for a claim against a time charterer or voyage
charterer?
This
is a nuanced area in Indian admiralty law. Under Section 5(1) of the
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, an
arrest is permissible if the High Court has reason to believe that:
Notably,
Section 5(1) primarily focuses on the liability of the owner or demise
charterer. A time charterer or voyage charterer (who does not assume full
control and responsibility for the vessel's operation as a demise charterer
does) is generally not an entity against whom an in rem action leading
to arrest can be directly brought under the Act unless their liability gives
rise to one of the specific maritime liens (which is rare for typical
time/voyage charterer claims like unpaid hire) or if the owner or demise
charterer is also liable for the claim arising from the charterer's actions.
This
means that if a maritime claim (e.g., for bunkers supplied) arose due to the
actions of a time charterer, a claimant generally cannot arrest the vessel
solely on the basis of the time charterer's liability unless the owner is also
personally liable for that claim. This contrasts with some international
conventions (like the 1999 Arrest Convention) which allow arrest for claims
against a bareboat (demise) charterer, time charterer, or voyage charterer in
certain circumstances. Indian courts have largely adhered to the principle that
for an in rem action, the liability must ultimately be traceable to the
owner or demise charterer.
38.
What is the concept of res judicata in admiralty proceedings?
The
principle of res judicata applies to admiralty proceedings, as it does to
other civil suits. Res judicata (meaning "a matter judged")
prevents the same parties from relitigating issues that have already been
definitively decided by a competent court.
In
the context of ship arrest, this means:
However,
the application of res judicata is nuanced. It requires careful
examination of whether the cause of action, parties, and issues in the
subsequent suit are identical to those in the previously decided matter.
39.
Can a foreign arbitral award be enforced by way of ship arrest in India?
Yes,
a foreign arbitral award can be enforced in India by way of ship arrest,
provided the award is recognized and enforceable under Indian law.
India
is a signatory to the New York Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, 1958. The Arbitration and Conciliation Act,
1996 (as amended) governs the enforcement of foreign awards in India.
For
a foreign arbitral award to be enforceable through ship arrest:
1.
The award must qualify as a "foreign
award" under Part II of the Arbitration and Conciliation Act, 1996.
2.
The award must be enforceable, meaning it meets the
conditions laid down in Section 48 of the Arbitration Act (e.g., the parties
were given proper notice, the award is not contrary to public policy of India,
etc.).
3.
The underlying claim that was the subject of the
arbitration must be a "maritime claim" under Section 4 of the
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.
4.
The vessel to be arrested must be within the
jurisdiction of the High Court, and the conditions for in rem action
(Section 5 of the Admiralty Act) must be met, especially regarding beneficial
ownership at the relevant times.
The
High Courts in India can order the arrest of a vessel to secure the amount of an
enforceable foreign arbitral award or to execute a decree based on such an
award, effectively treating the award as a maritime claim for enforcement
purposes.
40.
What is the hierarchy of maritime claims in a judicial sale?
The
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017,
specifically Section 10, establishes the hierarchy of maritime claims in
a judicial sale of a vessel. This order determines how the proceeds of the sale
will be distributed among various claimants. The general order of priority, from
highest to lowest, is:
1.
Court Costs and
Expenses: Expenses incurred by the Admiralty Marshal/Sheriff for the arrest,
custody, and preservation of the vessel, and costs of the sale. These are
usually paid first from the sale proceeds.
2.
Maritime Liens: These are accorded the highest priority among substantive claims and are
paid in a specific order:
o
(a) Claims for wages and other sums due to the
master, officers, and other members of the vessel's complement.
o
(b) Claims in respect of loss of life or personal
injury in connection with the vessel's operation.
o
(c) Claims for reward for salvage services.
o
(d) Claims for port, canal, and other waterway dues,
pilotage dues, and any other statutory dues related to the vessel.
o
(e) Claims based on tort arising out of loss or
damage caused by the operation of the vessel (other than loss or damage to
cargo). (Note: Within these categories, typically the "last in time,
first in right" principle applies for certain liens like salvage, as later
services may preserve the res for earlier claimants).
3.
Registered Mortgages and
Charges: Claims secured by a registered mortgage or charge of the same nature on
the vessel.
4.
All Other Maritime
Claims: All other maritime claims as defined under Section 4 of the Act, which
do not fall into the maritime lien category or are not secured by a registered
mortgage. These claims generally rank pari passu (equally) among
themselves unless the court determines otherwise based on equitable
considerations.
It's
crucial for claimants to understand this hierarchy as it directly impacts their
chances of recovery from the sale proceeds of an arrested vessel.
41.
What is the role of a Caveat Warrant in Admiralty proceedings?
A
Caveat Warrant in admiralty proceedings, in essence, is a warning notice filed
in the court registry by a person or entity anticipating an arrest or release of
a vessel.
Rule
11 of the Admiralty (Procedure for obtaining and executing Warrant of Arrest)
Rules, 2017 and the specific Admiralty Rules of High Courts
typically provide for caveats:
The
filing of a caveat ensures that the court registry is aware of the party's
interest and will notify them before any order for arrest or release is passed
regarding the specified vessel.
42.
Can a vessel be arrested if it is already under arrest by another claimant?
Yes,
a vessel can be arrested multiple times by different claimants, even if it is
already under arrest by another claimant. This is known as "multiple
arrests" or "successive arrests."
When
a vessel is already under arrest, subsequent claimants with valid maritime
claims can file their own admiralty suits and seek warrants of arrest. The new
warrant of arrest will be executed by the Admiralty Marshal. While the vessel
remains physically under the custody of the court through the initial arrest,
the subsequent arrests mean that the vessel also serves as security for these
additional claims.
In
the event of a judicial sale, all claimants who have secured their claims
through an arrest (or who have intervened in the proceedings) will have their
claims considered for distribution of the sale proceeds according to the
statutory priority rules (Section 10 of the Admiralty Act, 2017). The
date of arrest does not necessarily determine priority among different
categories of claims (e.g., a maritime lien will rank higher than a mortgage
even if the mortgage holder arrested first), but it is relevant for
"ordinary" maritime claims that rank pari passu.
43.
What happens if the arrested vessel's value is less than the total claims
against it?
If
the arrested vessel's value (as determined by a court-ordered valuation and
subsequent sale proceeds) is less than the total outstanding maritime claims,
the proceeds will be distributed among the claimants according to the statutory
order of priority (Section 10 of the Admiralty Act, 2017).
This
means:
1.
Court/Marshal's Costs: These are always paid first.
2.
Maritime Liens: Paid next in their specific order of priority.
3.
Registered Mortgages: Paid after maritime liens.
4.
Other Maritime Claims: If any funds remain after paying the above, the remaining proceeds are
distributed pari passu (proportionately) among the other maritime
claimants. If the funds are insufficient to pay all claims within a particular
priority class, they will be distributed pro-rata among claimants within that
class.
Claimants
whose claims are not fully satisfied from the sale proceeds of the vessel may
still pursue the remaining portion of their claim in personam against the
vessel owner or other liable parties, if such a personal action is permissible
and enforceable.
44.
What is the limitation period for filing an Admiralty suit in India?
The
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, does not
prescribe a specific, comprehensive limitation period for all maritime claims.
Therefore, the Limitation Act, 1963, generally applies to admiralty
suits, unless specifically overridden by the Admiralty Act itself or other
maritime statutes.
For
most contractual claims (e.g., unpaid bunkers, charter hire, damage to cargo),
the limitation period is three years from the date the cause of action
arises, as per Article 55 of the Limitation Act, 1963 (for contracts not
specifically provided for). For tortious claims, it's typically three years
from the date the damage occurs.
Specific
Provisions:
It
is crucial for claimants to be aware of the applicable limitation periods and to
file their suits promptly to avoid their claims becoming time-barred.
45.
Can a vessel owned by the Central or State Government be arrested?
Section
3(3) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, provides a specific exemption:
"The
provisions of this Act shall not apply to any warship or naval auxiliary or
other vessel owned or operated by the Central or a State Government and used for
non-commercial purposes, and such vessel shall not be subject to arrest,
detention or sale under this Act."
Therefore,
vessels owned or operated by the Central or State Government are generally
immune from arrest if they are used for non-commercial purposes (e.g.,
naval vessels, Coast Guard ships, research vessels). However, if such a vessel
is engaged in commercial activities, it may potentially lose its immunity,
though this is a complex area of international and domestic law that would need
careful legal analysis.
46.
What is the procedure for a judicial sale of an arrested vessel?
If
an arrested vessel is not released by the provision of security and the maritime
claim remains outstanding, the claimant can apply to the High Court for an order
of judicial sale. The procedure generally involves:
1.
Application for Sale: The claimant files an application (e.g., Notice of Motion/Chamber
Summons) seeking an order for the sale of the vessel.
2.
Valuation: The court usually directs the Admiralty Marshal/Sheriff to appoint a
qualified surveyor to assess the vessel's value.
3.
Appraisal and
Advertisement: The vessel is appraised, and the sale is publicly advertised (often in
leading newspapers, both national and international maritime publications) to
invite bids.
4.
Auction/Tender: The vessel is typically sold by public auction or through a tender
process under the supervision of the Admiralty Marshal/Sheriff.
5.
Confirmation of Sale: The highest bid is placed before the court for confirmation. The court
scrutinizes the sale process to ensure fairness and transparency.
6.
Payment and Bill of
Sale: Upon confirmation, the successful bidder deposits the full sale price.
The court then issues a "Bill of Sale" to the purchaser, which conveys
a clean title to the vessel, free of all prior liens and encumbrances. This
"clean title" aspect is a crucial benefit of a judicial sale in
admiralty.
7.
Distribution of
Proceeds: The sale proceeds are deposited into court, and after deducting the
Sheriff's expenses, they are distributed to the various claimants according to
the priority established by Section 10 of the Admiralty Act, 2017.
47.
Can an arrested vessel be moved to another port or berth while under arrest?
Yes,
an arrested vessel can be moved to another port or berth while under arrest, but
only with the express permission and direction of the High Court and
under the supervision of the Admiralty Marshal/Sheriff.
This
may be necessary for several reasons:
Any
unauthorized movement of an arrested vessel constitutes contempt of court. The
costs associated with such a movement (e.g., tugs, pilotage, new berth hire)
typically become part of the Sheriff's expenses and are given the highest
priority.
48.
What is the impact of arbitration clauses on the right to arrest a vessel?
The
presence of an arbitration clause in an underlying contract (e.g., a
charterparty, bill of lading, or shipbuilding contract) generally does not
extinguish the right to arrest a vessel for security in India.
The
Supreme Court of India and various High Courts have consistently held that an
admiralty action in rem for the arrest of a ship is primarily for the
purpose of obtaining security for a maritime claim. While the merits of the
dispute may be decided in arbitration (if an arbitration agreement exists and is
invoked), the arrest of the vessel provides interim security to ensure that any
eventual arbitral award can be satisfied.
Therefore,
a claimant can initiate an admiralty suit and seek arrest of the vessel even if
the dispute is subject to an arbitration agreement. Once the vessel is arrested
or security is provided, the court may stay the admiralty suit and refer the
parties to arbitration, while retaining the security. If an arbitral award is
subsequently obtained in the claimant's favour, it can then be enforced against
the security. This approach allows claimants to secure their claims without
undermining the efficacy of arbitration.
49.
What is the difference between an action in rem and an action in
personam in Admiralty?
50.
Can a vessel be arrested for unpaid insurance premiums?
Yes,
a claim for unpaid insurance premiums related to the vessel can constitute a
"maritime claim" under Section 4(1)(v) of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017. This section
includes "claims by a master, officer or a member of the crew or any other
person for insurance premiums, or social insurance contributions payable in
respect of them or similar other matters."
This
generally covers premiums for hull and machinery insurance, P&I insurance,
or other types of insurance directly related to the vessel's operation and crew.
Therefore, a vessel can be arrested in India to secure such a claim. However,
it's important to note that a claim for unpaid insurance premiums is generally not
a maritime lien under Section 9 of the Act, and therefore would rank lower
than maritime liens in the event of a judicial sale.
51.
What is "forum shopping" in the context of ship arrest, and how do
Indian courts view it?
"Forum
shopping" refers to the practice of a litigant choosing the court or
jurisdiction where they believe they will get the most favorable outcome or
where the law is most advantageous to their case. In ship arrest, it might
involve choosing a jurisdiction where arrest laws are more liberal, where
security requirements are lower, or where priority rules are more favorable.
Indian
courts, while having broad admiralty jurisdiction, generally discourage
egregious instances of forum shopping. While a claimant is entitled to choose a
jurisdiction where a vessel can be found, courts may intervene if the choice of
forum is clearly vexatious, oppressive, or an abuse of process.
However,
the general position is that if the vessel is legitimately within Indian
territorial waters and the High Court has jurisdiction over the maritime claim,
the court will exercise its jurisdiction. The fact that the claimant might have
other fora available to them (e.g., the flag state of the vessel, or a
jurisdiction specified in a contract) does not automatically preclude arrest in
India, provided the statutory requirements of the Admiralty Act, 2017 are met.
The court has the discretion to stay the proceedings on grounds of forum non
conveniens (that another forum is more appropriate), but this is exercised
cautiously and requires strong evidence from the defendant.
52.
What is the process of providing counter-security by the defendant for wrongful
arrest?
As
mentioned in the answer to Question 22, Section 11(a) of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017, allows the High
Court to require the claimant to provide an unconditional undertaking or
security for any loss or damage incurred by the defendant due to a wrongful
arrest.
The
process for a defendant to obtain such counter-security usually involves:
1.
Application by
Defendant: After the vessel's arrest, the defendant (shipowner/demise charterer)
files an application (e.g., Notice of Motion/Chamber Summons) before the High
Court.
2.
Grounds: The defendant argues that the arrest was wrongful, excessive, or
unjustified, and that they are likely to suffer damages as a result. They would
need to demonstrate a prima facie case of wrongful arrest.
3.
Court's Discretion: The court, in its discretion, may order the claimant to provide an
unconditional undertaking (often in the form of a bank guarantee) to cover the
potential damages for wrongful arrest. The amount and nature of the security are
determined by the court.
4.
Purpose: This counter-security serves as a safeguard for the defendant, ensuring
that if it is later proven that the arrest was wrongful, they have a fund
against which to recover their losses. It acts as a deterrent against frivolous
or speculative arrests.
53.
Can a vessel be arrested for claims arising out of shipbuilding contracts?
Yes,
claims arising out of shipbuilding contracts are explicitly recognized as
"maritime claims" under Section 4(1)(a) of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017. This clause
covers "a claim for the building, construction, repairing, converting or
equipping of a vessel."
Therefore,
if there is an unpaid claim related to the construction, repair, conversion, or
equipping of a vessel, the High Court in India can exercise its admiralty
jurisdiction to order the arrest of that specific vessel (or a sister ship,
subject to conditions). These claims do not typically give rise to a maritime
lien, but they are valid grounds for an in rem action and arrest to
secure the debt.
54.
What documents are typically required to initiate an Admiralty suit for arrest?
To
initiate an Admiralty suit for the arrest of a vessel in India, the claimant
(plaintiff) typically needs to prepare and file the following key documents:
1.
Plaint (Complaint): This is the formal document outlining the claimant's case, specifying
the maritime claim, the facts giving rise to it, the amount claimed, and the
prayers (including the prayer for arrest and eventual sale if needed). It must
be verified by an affidavit.
2.
Affidavit in Support of
Arrest Application: A sworn statement by or on behalf of the claimant,
providing prima facie evidence for the maritime claim and justifying the
need for arrest. It must typically affirm that the vessel is within the court's
jurisdiction.
3.
Warrant of Arrest
(Draft): A draft of the order that the court will issue for the arrest of the
vessel.
4.
Power of Attorney (POA): A properly executed, notarized, and often legalized/apostilled Power of
Attorney from the claimant authorizing the filing of the suit and actions
related to it. If the claimant is a foreign entity, this is crucial.
5.
Supporting
Documents/Exhibits: All relevant contractual documents (e.g., charterparty, bill of lading,
bunker supply contract, repair invoices), correspondence, and other evidence
supporting the maritime claim. If in a foreign language, certified English
translations are often required.
6.
Court Fees: Proof of payment of the prescribed court fees (ad valorem).
7.
Caveat Search Report: A report from the court registry confirming whether any caveat against
arrest has been filed against the vessel.
8.
Undertaking as to
Damages: While not always required ex-ante, the claimant may be asked by
the court to provide an undertaking (or counter-security) to compensate the
defendant for wrongful arrest, especially if the arrest application is ex-parte.
These
documents must be meticulously prepared and filed in accordance with the
specific Admiralty Rules of the concerned High Court and the Code of Civil
Procedure, 1908 (where not inconsistent).
55.
Can a vessel be arrested for a claim for environmental damage or pollution?
Yes,
claims for environmental damage or pollution caused by a vessel are recognized
as "maritime claims" under Section 4(1)(k) of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017. This clause
specifically includes "a claim for loss or damage caused by pollution from
a vessel, arising from the escape or discharge of oil or other hazardous or
noxious substances from the vessel, whether or not costs of preventative
measures or clean-up operations are included."
This
provision aligns Indian law with international conventions on pollution
liability. While such claims are maritime claims allowing for arrest, it's
important to note that they do not automatically give rise to a maritime lien
under Section 9 of the Act, which primarily covers tort claims for loss or
damage caused by the operation of the vessel other than loss or damage to
cargo and containers.
56.
What is the effect of an owner changing the vessel's flag or name after a claim
arises?
The
changing of a vessel's flag or name after a maritime claim arises generally does
not defeat a valid maritime lien or the ability to arrest the vessel in
India.
57.
Can a vessel under construction be arrested?
The
definition of "vessel" under Section 2(1)(l) of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017, includes a
vessel "constructed for use in navigation by water." Furthermore,
"a claim for the building, construction... of a vessel" is explicitly
a "maritime claim" under Section 4(1)(a).
This
implies that a vessel under construction can indeed be the subject of an
admiralty claim and potentially arrest, particularly if the claim arises
directly from its construction (e.g., unpaid shipbuilding installments or
defects). The "dead vessel" doctrine (discussed in Question 12)
generally applies to vessels permanently withdrawn from navigation, not
necessarily to those that are yet to be put into navigation. Indian courts have
taken a broad view of what constitutes a "vessel" for admiralty
jurisdiction, including vessels in various stages of completion, provided they
are identifiable as a future navigable vessel.
58.
What is the role of P&I Clubs in ship arrest and release?
Protection
and Indemnity (P&I) Clubs play a significant role in ship arrest and release
by providing financial security on behalf of their members
(shipowners/operators) for maritime claims.
P&I
Clubs are mutual insurance associations, and their LOUs are widely recognized
and accepted by courts and claimants worldwide, including in India, provided
they are issued by reputable clubs and contain satisfactory terms.
59.
Can a vessel be arrested for a claim for goods, materials, or services supplied
for the vessel's crew?
Yes,
claims related to goods, materials, or services supplied for the vessel's crew
are generally covered under the broad definition of "maritime claims"
in Section 4(1)(l) of the Admiralty (Jurisdiction and Settlement of Maritime
Claims) Act, 2017. This section includes "goods, materials, perishable
or non-perishable provisions... supplied or services rendered to the vessel for
its operation, management, preservation or maintenance."
Provisions
(food, water) and other essential supplies for the crew are considered vital for
the vessel's "operation" and "maintenance." Therefore,
unpaid bills for such supplies would constitute a maritime claim for which an
arrest can be sought. However, similar to "necessaries" generally,
these claims typically do not give rise to a maritime lien under Section
9 of the Act.
60.
Can you arrest a ship to obtain security for both court judgments and arbitral
awards?
Yes.
The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017
(hereinafter "the Admiralty Act, 2017") governs maritime claims in
India. Section 4(1)(u) of the Admiralty Act, 2017 explicitly defines a
"maritime claim" to include "a claim for the enforcement of an
arbitral award or a foreign decree or an order of any court or a tribunal
relating to a maritime claim."
This
means that:
The
enforceability of foreign judgments and arbitral awards in India is governed by
the Code of Civil Procedure, 1908, and the Arbitration and Conciliation Act,
1996, respectively. Once deemed enforceable, they fall within the ambit of
"maritime claims" for the purpose of arrest under the Admiralty Act,
2017.
61.
Can bareboat-chartered ships be arrested?
Yes,
a bareboat-chartered ship (also known as a demise-chartered ship) can be
arrested in India, subject to the conditions laid down in Section 5 of the
Admiralty Act, 2017.
Section
5(1) of the Admiralty Act, 2017 provides the
circumstances under which a High Court may order the arrest of a vessel.
Specifically, sub-sections (a) and (b) are relevant:
Therefore,
if the maritime claim arose against the demise charterer of the vessel
(who has full operational and commercial control, akin to an owner), and that
demise charterer is still the demise charterer or has become the owner at the
time of arrest, the vessel can be arrested. This reflects the legal principle
that the demise charterer, by virtue of their extensive control, assumes the
liabilities of the owner for certain claims.
62.
Can time-chartered ships be arrested?
This
is a more nuanced aspect under Indian Admiralty law compared to bareboat
(demise) charters. Under the Admiralty Act, 2017, particularly Section
5, the primary focus for an in rem action leading to arrest is on the
liability of the owner or the demise charterer.
A
time charterer or voyage charterer (who does not have the extensive control of a
demise charterer) is generally not an entity against whom an in rem
action directly leading to arrest can be brought unless:
In
essence, for claims arising purely from the time charterer's obligations (e.g.,
unpaid charter hire to the owner), the remedy is typically an in personam
action against the time charterer. An arrest of the vessel for such a claim
against a time charterer is generally not permissible unless the owner's
liability can also be established or a maritime lien exists.
63.
Can legal sister ships be arrested?
Yes,
the concept of "sister ship arrest" is fully recognized and provided
for under Indian Admiralty law by Section 5(2) of the Admiralty Act, 2017.
Section
5(2) states: "The High Court may also order arrest of any
other vessel for the purpose of providing security against a maritime claim, in
lieu of the vessel against which a maritime claim has been made under this Act,
subject to the provisions of sub-section (1): Provided that no vessel shall be
arrested under this sub-section in respect of a maritime claim under clause (a)
of sub-section (1) of section 4."
Key
aspects:
The
ruling in M.V. Mariner IV -v- Videsh Sanchar Nigam Limited (1997, Bombay
High Court) and the earlier landmark case of M.V. Elizabeth v. Herwan
Investment and Trading Pvt. Ltd. (1993, Supreme Court) affirmed the High
Courts' jurisdiction to arrest sister ships, and this principle is now
explicitly codified in the 2017 Act.
64.
Is counter-security required? If so, in what form and how much?
No,
counter-security is not a mandatory requirement for obtaining an initial
order of arrest in India. The High Court typically orders an ex-parte
arrest based on a prima facie case presented by the claimant.
However,
the court has discretionary power to order counter-security as a
condition of arrest or for maintaining an existing arrest, particularly if the
defendant claims that the arrest is wrongful or excessive. This power is
explicitly provided under Section 11(1) of the Admiralty Act, 2017:
"The
High Court may, as a condition of arrest of a vessel, or for permitting an
arrest already effected to be maintained, impose upon the claimant who seeks to
arrest or who has procured the arrest of the vessel, an obligation to provide an
unconditional undertaking to pay such sums of money as damages or such security
of a kind for an amount as determined by the High Court, for any loss or damage
which may be incurred by the defendant as a result of the arrest of the vessel,
in particular, the arrest having been wrongful or unjustified; or excessive
security having been demanded and provided."
The
form of counter-security is usually an unconditional undertaking, often backed
by a bank guarantee. The amount is determined by the court based on the
potential damages the shipowner might suffer due to wrongful arrest.
65.
Effect of Arbitration clause (if any) on arrest?
The
presence of an arbitration clause in the underlying contract (e.g., charter
party, bill of lading) generally does not prevent the arrest of a vessel for
the purpose of obtaining security in India.
Indian
courts, including the Supreme Court, have consistently held that the power to
arrest a vessel in rem is distinct from the power to adjudicate the
merits of the dispute. The arrest is primarily for the purpose of obtaining
security for a maritime claim.
Therefore:
The
Supreme Court's pronouncements, including cases like Liverpool and London
S.P. & I Association Ltd. v. M.V. Sea Success I (2004) and State
Trading Corporation of India Ltd. & Anr. (though the exact citation
needs to be re-verified for context as the quote given is very general), affirm
this position, ensuring that the right to seek security through arrest is not
defeated by an arbitration agreement.
66.
What maritime liens are recognised?
The
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017,
specifically Section 9, comprehensively defines and prioritizes maritime
liens in India.
Maritime
lien means a maritime claim as recognized under Section
4(1)(w) of the Admiralty Act (2017) against the owner, demise charterer,
manager or operator of the vessel referred to in clauses (a) to (e) of
sub-section (1) of section 9, which shall continue to exist under sub-section
(2) of that section.
Section
9(1) of the Admiralty Act, 2017 lists the following
maritime liens and their inter se priority (from highest to lowest priority for
distribution of proceeds in a judicial sale):
Section
9(2) states that: "The maritime lien specified in sub-section (1) shall
continue to exist on the vessel notwithstanding any change of ownership or of
registration or of flag and shall be extinguished after expiry of a period of
one year unless, prior to the expiry of such period, the vessel has been
arrested or seized and such arrest or seizure has led to a forced sale by the
High Court."
Proviso
to Section 9(2): "Provided that for a claim for wages and other
sum due to the master, officers and other members of the vessel, the period
shall be two years from the date on which the wage, sum, cost of repatriation or
social insurance contribution, falls due or becomes payable."
This
means wage liens have a longer validity period of two years. It is important to
note that the Act also specifies certain claims that do not give rise to
maritime liens, such as claims arising out of damage in connection with the
carriage of oil or other hazardous substances where compensation is payable
under specific laws (Section 9(4)).
67.
How soon after the arrest is effected will the claimant have to take action on
the merits?
There
isn't a separate prescribed delay between the arrest and the obligation
to proceed on the merits. The arrest of the vessel is an interlocutory step
within the main admiralty suit filed for the maritime claim.
When
a claimant seeks an arrest, they concurrently file the Plaint (Complaint)
for the substantive maritime claim. The application for arrest is typically made
ex-parte within that suit. Once the arrest is effected, the shipowner
enters appearance, and the regular civil procedure (as adapted by the Admiralty
Rules of the High Court and the Code of Civil Procedure, 1908) for proceeding
with the suit on merits begins. This includes filing of written statements,
discovery, inspection, and trial.
If
there is an arbitration agreement, the defendant will apply for a stay of the
admiralty suit and reference to arbitration. The court will then direct the
parties to pursue their merits in arbitration, while the arrest/security is
maintained.
Therefore,
the action on merits commences immediately with the filing of the admiralty
suit, and the arrest is a measure to secure the claim within that ongoing
proceeding. The claimant is expected to prosecute their suit with due diligence.
68.
Will the courts that ordered the arrest accept jurisdiction over the substantive
claim?
In
general, yes, the High Court that ordered the arrest will accept jurisdiction
over the substantive maritime claim. The power to order arrest (Section 5)
is part of the High Court's overall admiralty jurisdiction to "hear and
determine any question on a maritime claim" (Section 4).
However,
there are important exceptions and considerations:
Subject
to these exceptions, the Indian High Court seizing the vessel will usually
proceed to adjudicate the merits of the maritime claim.
69.
Do the courts acknowledge wrongful arrest? If so, what is the test?
Yes,
Indian courts fully acknowledge the concept of "wrongful arrest" and
provide for compensation for it under Section 11 of the Admiralty Act, 2017.
Section
11(1) of the Act explicitly states that the High Court may:
The
Test for Wrongful Arrest: The traditional test for wrongful arrest in India,
stemming from English common law principles (e.g., The Evangelismos
(1858)), requires the defendant (shipowner) to prove that the arrest was made
with either:
Merely
proving that the claimant's case failed on merits is generally not sufficient to
establish wrongful arrest. The defendant must demonstrate that the arrest was so
"unwarrantably brought as to imply malice or gross negligence." The
burden of proving malice or gross negligence lies heavily on the shipowner.
70.
Who can be a "claimant" or "plaintiff" in an Admiralty suit
in India?
The
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, does not
restrict who can be a claimant (plaintiff) based on nationality or legal status.
Any person or legal entity, whether Indian or foreign, individual or corporate,
who has a "maritime claim" as defined under Section 4 of the
Admiralty Act, 2017, can file an Admiralty suit. The fundamental principle
is the existence of a valid maritime claim and the presence of the vessel within
the High Court's territorial jurisdiction. The action is in rem against
the vessel, meaning the claimant is not primarily concerned with the owner, and
the owner's presence is not required for the adjudication of the claim.
71.
What constitutes "sufficient security" for the release of an arrested
vessel?
The
Admiralty Act, 2017, does not specify the exact form or amount of
"sufficient security," leaving it to the discretion of the High Court.
However, common practice and judicial precedents dictate that sufficient
security should be:
The
underlying principle is that the security must be readily convertible into cash
to satisfy any final judgment or arbitral award.
72.
Who can be an intervening party in an Indian admiralty suit, and what are their
rights?
Any
person or entity who has a legitimate maritime claim against an arrested vessel,
or who has an interest in the vessel or its proceeds, can seek to intervene in
an existing admiralty suit.
Intervention
streamlines the process, avoiding multiple parallel suits and ensuring all
interested parties are aware of the proceedings.
73.
How long does a ship arrest typically last in India?
The
duration of a ship arrest in India can vary significantly, ranging from a few
days to several months, or even years, depending on various factors:
There
is no fixed statutory period for the duration of an arrest. The objective is
either the release of the vessel upon furnishing security or its eventual
judicial sale to satisfy the claims.
74.
What are the costs associated with maintaining an arrested vessel in India, and
who bears them?
Maintaining
an arrested vessel is a significant expense, and these costs are considered
"Marshal's expenses" or "custodia legis" costs, which
receive the highest priority in the distribution of sale proceeds.
Costs
typically include:
Who
bears them? Initially, the arresting claimant is often
required to provide an undertaking to the court to cover these costs, as they
are the party initiating the arrest and benefiting from the security. However,
these costs are ultimately treated as first charge on the vessel and its
sale proceeds. Therefore, in a judicial sale, they are recouped from the sale
proceeds before any other maritime claim, including maritime liens. If
the sale proceeds are insufficient to cover these costs, the arresting claimant
(who provided the undertaking) may be held liable for the deficit.
75.
Can a foreign company or individual initiate a ship arrest in India?
Yes,
absolutely. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act,
2017, does not impose any nationality restrictions on who can be a claimant. As
long as a foreign company or individual has a valid "maritime claim"
under Section 4 of the Act and the vessel is within the admiralty
jurisdiction of an Indian High Court, they can file an admiralty suit and seek
the arrest of the vessel. Many ship arrests in India are, in fact, initiated by
foreign entities (e.g., bunker suppliers, charterers, cargo owners).
76.
What is the rule of forum non conveniens in Indian admiralty law?
The
doctrine of forum non conveniens ("inconvenient forum") allows
a court to decline to exercise its jurisdiction over a case, even if it
technically has jurisdiction, if it determines that another forum is
significantly more appropriate for the resolution of the dispute.
1.
There is another forum (e.g., a foreign court or
arbitration tribunal) that has jurisdiction over the dispute.
2.
The alternative forum is "clearly and
distinctly more appropriate" for the ends of justice and convenience of all
parties.
3.
Continuing the proceedings in the Indian High Court
would be oppressive, vexatious, or an abuse of process.
77.
How does a judicial sale by an Indian High Court affect existing mortgages and
liens?
A
judicial sale ordered by an Indian High Court generally conveys a clean title
to the purchaser, free from all prior liens, encumbrances, and mortgages. This
is a fundamental principle of admiralty law designed to make judicial sales
attractive to purchasers and to realize the best possible price for the vessel.
This
"clean title" aspect is a critical incentive for buyers in a judicial
auction, as they acquire the vessel free from past liabilities.
78.
What are the implications of the United Nations Convention on the Law of the Sea
(UNCLOS) on Indian admiralty law?
India
is a signatory to the United Nations Convention on the Law of the Sea (UNCLOS),
1982. While UNCLOS primarily deals with the rights and duties of states in their
use of the oceans, including maritime zones, navigation, and environmental
protection, it has significant indirect implications for Indian admiralty
law:
However,
UNCLOS itself is a framework convention and does not directly govern the
procedural aspects of ship arrest, which are covered by specific admiralty
conventions and domestic laws.
79.
How does a ship arrest affect the crew on board, and what are their rights?
A
ship arrest has significant implications for the crew, who often find themselves
stranded. Indian law and international maritime labor conventions prioritize the
welfare and rights of the crew.
The
legal framework aims to protect seafarers as vulnerable stakeholders in an
arrest situation.
80.
Can a vessel be arrested for a claim for unpaid port dues or pilotage?
Yes,
a vessel can certainly be arrested for a claim for unpaid port, canal, and other
waterway dues, and pilotage dues.
Section
4(1)(d) of the Admiralty Act, 2017,
explicitly lists "claims for port, canal, and other waterway dues and
pilotage dues" as a "maritime claim."
Furthermore,
Section 9(1)(d) of the Admiralty Act, 2017, classifies such claims as a maritime
lien, which grants them a high priority in the event of a judicial sale of
the vessel. This means that port authorities and pilots have a powerful tool to
recover their dues by arresting the vessel.
81.
Is there a fast-track procedure for ship arrest disputes in India?
While
the Admiralty Act, 2017, itself does not introduce a specific "fast-track
procedure" akin to summary suits under the Code of Civil Procedure, the
very nature of admiralty proceedings, especially ship arrest, demands urgency.
However,
a full trial on the merits for a complex maritime claim can still take a
considerable amount of time. The "fast-track" element is more
pronounced in the initial stages of arrest and release.
82.
Can a vessel be arrested for a claim for damage to the environment or pollution?
Yes,
absolutely. The Admiralty (Jurisdiction and Settlement of Maritime Claims)
Act, 2017, significantly strengthened India's legal framework for
environmental protection in maritime matters.
Section
4(1)(k) of the Admiralty Act, 2017,
specifically defines a "maritime claim" to include: "a claim for
loss or damage caused by pollution from a vessel, arising from the escape or
discharge of oil or other hazardous or noxious substances from the vessel,
whether or not costs of preventative measures or clean-up operations are
included."
This
provision allows for the arrest of a vessel for environmental damage claims,
including:
However,
it is important to note that claims for pollution damage do not
automatically constitute a maritime lien under Section 9 of the Act, unless they
fall under the general tortious claims in Section 9(1)(e) (claims based on tort
arising out of loss or damage caused by the operation of the vessel other than
loss or damage to cargo and containers), which is subject to interpretation and
specific facts. Nevertheless, they are valid grounds for an in rem action
and arrest.
83.
What is the role of the Bill of Lading in a cargo claim for ship arrest?
The
Bill of Lading (B/L) plays a crucial role in cargo claims for ship arrest in
India:
While
cargo claims are maritime claims for arrest, they do not create a maritime
lien under Section 9 of the Admiralty Act, 2017.
84.
Can a vessel be arrested for a claim related to the provision of stevedoring
services?
Yes,
a claim for the provision of stevedoring services (loading, stowing, discharging
cargo) for a vessel is considered a "maritime claim" under Section
4(1)(l) of the Admiralty Act, 2017.
This
section includes "claims for goods, materials, perishable or non-perishable
provisions, bunker fuel, stores or any other matter of whatsoever nature
supplied or services rendered to the vessel for its operation, management,
preservation or maintenance."
Stevedoring
services are essential for the "operation" of the vessel in a
commercial context. Therefore, unpaid bills for stevedoring services can be
grounds for arresting a vessel. Like many other "necessaries" claims,
stevedoring claims typically do not give rise to a maritime lien under
Section 9 of the Act.
85.
What is the concept of a "dead vessel" in Indian admiralty law, and
can it be arrested?
The
"dead vessel" doctrine refers to a vessel that has been permanently
withdrawn from navigation and is no longer capable of being used as a ship. This
typically applies to:
However,
the determination of whether a vessel is "dead" is a factual one. A
vessel temporarily laid up or undergoing repairs, even extensive ones, would
generally still be considered a "vessel" for arrest purposes.
86.
Can a vessel be arrested for a claim against its previous owner if the ownership
changed before the arrest?
This
depends on whether the claim is secured by a maritime lien. Section 5 of the
Admiralty Act, 2017, clarifies this:
This
distinction is crucial in admiralty practice.
87.
What is the role of the Admiralty Marshal (or Sheriff) in an Indian ship arrest?
The
Admiralty Marshal (or Sheriff, in some High Courts) plays a critical role in the
execution and management of ship arrests as an officer of the High Court. Their
duties, as specified in the High Courts' Admiralty Rules and implied by the
Admiralty Act, 2017, include:
The
Admiralty Marshal acts as the extended arm of the court, ensuring the integrity
of the arrest process and the protection of the res.
88.
Can a vessel be arrested for a dispute concerning the sale of the vessel itself?
Yes,
claims arising from a dispute concerning the sale of a vessel are recognized as
a "maritime claim" under Section 4(1)(r) of the Admiralty Act, 2017.
This
specifically covers disputes where, for example, a buyer alleges a breach of a
sale contract by the seller, or a seller claims unpaid purchase price. Such
claims allow the aggrieved party to initiate an admiralty suit and seek the
arrest of the vessel. However, a claim regarding the sale of a vessel does not
give rise to a maritime lien under Section 9 of the Act.
89.
What are the common challenges or defenses raised by shipowners against an
arrest?
Shipowners
(defendants) commonly raise the following challenges or defenses against an
arrest in India:
1.
No Valid Maritime Claim: Arguing that the claimant's asserted claim does not fall within the
definition of a "maritime claim" under Section 4 of the Admiralty
Act, 2017.
2.
Lack of Jurisdiction:
o
Vessel not within the territorial jurisdiction of
the High Court.
o
Claim not falling under admiralty jurisdiction (in
rem or in personam).
3.
Beneficial Ownership:
o
For sister ship arrests (Section 5(2)): Disputing
that the "offending" vessel and the arrested vessel are under the same
beneficial ownership at the relevant time.
o
For claims not secured by a maritime lien (Section
5(1)(a)): Arguing that the person liable for the claim when it arose is not the
owner/demise charterer at the time of arrest due to a genuine change of
ownership.
4.
Arbitration
Agreement/Exclusive Jurisdiction Clause: Seeking a stay of the admiralty proceedings and a
reference to arbitration or adjudication in a different forum as per contract
terms (though this may not lead to immediate release of security).
5.
Wrongful/Excessive
Arrest: Arguing that the arrest was sought without reasonable and probable
cause, or for an excessively high amount, and seeking counter-security or
damages under Section 11 of the Admiralty Act, 2017.
6.
Time Bar/Limitation: Contending that the maritime claim is time-barred under the Limitation
Act, 1963, or specific provisions of the Admiralty Act (e.g., maritime liens
after one/two years as per Section 9(2)).
7.
No Prima Facie
Case: Arguing that the claimant has not presented sufficient prima facie
evidence to warrant an arrest.
8.
Existence of Prior
Security: If security has already been provided in another jurisdiction for the
same claim.
9.
Vessel Immunity: If the vessel is a warship or government vessel used for non-commercial
purposes (Section 3(3) of the Act).
These
defenses require robust legal arguments and supporting evidence from the
shipowner to convince the court to vacate the arrest or order release.
90.
Do the courts acknowledge the piercing and lifting of the corporate veil?
Yes,
Indian courts, including those exercising admiralty jurisdiction, acknowledge
and apply the doctrine of piercing or lifting the corporate veil. However, this
is done only in limited and exceptional circumstances, where the
corporate structure is being used as a facade or an instrument of fraud, or to
evade an prior existing legal obligation.
91.
Is it possible to have a ship sold prior to obtaining a judgment? If so, how
long does such a sale take?
Yes,
it is possible to have a ship sold prior to obtaining a final judgment on the
merits. This is known as a pendente lite (pending litigation) sale or an interim
sale.
92.
Can you arrest a foreign State-owned vessel?
The
arrest of foreign State-owned vessels in India is governed by the principles of
sovereign immunity, as explicitly laid down in the Admiralty (Jurisdiction
and Settlement of Maritime Claims) Act, 2017.
Section
3(3) of the Admiralty Act, 2017, states: "This Act
shall not apply to a warship or a naval auxiliary or any other vessel owned or
operated by the Central Government or a State Government or any foreign
Government and used only on non-commercial public service."
Therefore:
93.
What is the difference in respect to arresting a ship for a maritime claim and a
maritime lien?
This
is a fundamental distinction in Indian admiralty law, clearly defined by the
Admiralty Act, 2017:
In
essence: While all maritime liens are maritime claims, not all maritime claims
are maritime liens. The key difference lies in their proprietary nature, ability
to "follow the ship" through changes of ownership, and their superior
priority in judicial sales.
94.
Does India recognise maritime liens?
Yes,
India categorically recognizes maritime liens under the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017.
95.
What are the duties and responsibilities of the Sheriff/Marshal towards crew on
board after arrest of ship?
The
duties and responsibilities of the Admiralty Marshal (or Sheriff) towards the
crew on board an arrested ship are primarily to ensure the preservation and
safety of the vessel itself. While the Marshal does not become the employer,
they have humanitarian responsibilities and powers related to crew welfare,
which ultimately contribute to the preservation of the asset.
96.
What lapse of time is required in order to arrest a ship since the moment the
file arrives at your law firm?
The
process for obtaining a ship arrest order in India is designed to be very
expeditious due to the mobile nature of the asset and the potential for it to
leave jurisdiction.
The
efficiency largely depends on the readiness of the claimant's documentation, the
completeness of the prima facie case, and the responsiveness of the court
registry and the presiding judge.
97.
Is counter-security required from the arresting party?
No,
counter-security is not a mandatory pre-condition for obtaining an
initial order of arrest in India. The High Court typically orders an ex-parte
arrest based on a prima facie case presented by the claimant.
However,
the court has discretionary power to order counter-security as a
condition of arrest or for maintaining an existing arrest, particularly if the
defendant claims that the arrest is wrongful or excessive. This power is
explicitly provided under Section 11(1) of the Admiralty Act, 2017:
"The
High Court may, as a condition of arrest of a vessel, or for permitting an
arrest already effected to be maintained, impose upon the claimant who seeks to
arrest or who has procured the arrest of the vessel, an obligation to provide an
unconditional undertaking to pay such sums of money as damages or such security
of a kind for an amount as determined by the High Court, for any loss or damage
which may be incurred by the defendant as a result of the arrest of the vessel,
in particular, the arrest having been wrongful or unjustified; or excessive
security having been demanded and provided."
Along
with the Plaint, the claimant usually files an undertaking as to damages,
committing to pay compensation if the arrest is later found to be wrongful. This
undertaking serves as an initial safeguard. The court may then, at a later
stage, convert this undertaking into a formal counter-security if a strong case
for wrongful arrest is made by the defendant.
98.
Will the Court accept a Club LOU to release a vessel under arrest?
Generally,
Indian courts have traditionally been reluctant to accept a Protection and
Indemnity (P&I) Club Letter of Undertaking (LOU) as sufficient security
for the release of a vessel under arrest.
While
there might be some isolated instances or specific circumstances where a court might
consider an LOU (e.g., where both parties consent, or in cases of exceptional
urgency with specific undertakings), the overwhelming practice is to demand cash
or bank guarantees.
99.
Can Charterers' bunkers on board a third-party's vessel be arrested or attached
to secure or enforce a claim against Charterers?
This
is a complex area with evolving legal positions. While there is no direct
statutory provision in the Admiralty Act, 2017, explicitly permitting the arrest
of bunkers belonging to a charterer to satisfy a claim against that charterer,
the general principles of attachment and beneficial ownership can be considered.
While
it's theoretically possible to consider attaching bunkers as movable property of
the charterer under general civil law principles, applying admiralty arrest
principles directly to the bunkers for a claim solely against a time charterer
(who is not the owner or demise charterer) remains a matter without clear
precedent and significant legal debate.
100.
Can an arbitrator pass an interim or final award arresting a ship as security in
arbitration?
No.
Arrest of a ship can only be effected by an order of a High Court exercising
admiralty jurisdiction. An arbitration tribunal in India does not
have the power to order the arrest of a vessel, either as an interim measure or
as part of a final award.
Therefore,
arrests should not be confused with restrictions, seizures, or detentions
imposed by administrative authorities (such as Port, Customs, or other
authorities for violations of safety, pollution, or other regulations), as these
are distinct from judicial arrest. The court's decision ordering the arrest of a
ship is an interlocutory order for security, not a final judgment on the merits.
101.
Can a vessel under construction be arrested in India?
Generally,
no, unless specifically notified by the Central Government. Section 1(2) of
the Admiralty Act, 2017 states: "It shall apply to every vessel,
irrespective of the place of residence or domicile of the owner: Provided that
this Act shall not apply to an inland vessel defined in clause (a) of
sub-section (1) of section 2 of the Inland Vessels Act, 1917 (1 of 1917), or a
vessel under construction that has not been launched unless it is notified by
the Central Government to be a vessel for the purposes of this Act."
This
means that a vessel that has not yet been launched is typically outside the
ambit of the Admiralty Act and therefore cannot be arrested under its
provisions, unless a specific notification by the Central Government brings it
within the definition of a "vessel" for admiralty purposes. Once
launched and capable of navigation, even if still undergoing fitting out, it
would generally be considered a "vessel" and thus amenable to arrest
for maritime claims.
102.
Is a bareboat chartered vessel amenable to arrest for claims against the
bareboat charterer?
Yes.
The Admiralty Act, 2017, specifically addresses the liability of demise
(bareboat) charterers.
This
means that if a maritime claim arises against the bareboat (demise) charterer,
the vessel itself can be arrested, and even a sister vessel under the same
beneficial ownership (including demise charter) of the bareboat charterer can be
arrested. This aligns with international practice where the bareboat charterer
is treated akin to an owner for operational and liability purposes.
103.
What happens if the arrested vessel changes flag after the maritime claim
arises? Does it affect the claim or arrest?
No,
a change of flag after a maritime claim arises generally does not affect the
maritime claim or the High Court's jurisdiction to arrest the vessel.
The
focus is on the vessel being the res and whether the conditions for
arrest are met at the time of arrest, irrespective of a subsequent change in
flag.
104.
Can a claim for damage to port infrastructure caused by a vessel be considered a
maritime claim for arrest?
Yes,
a claim for damage to port infrastructure caused by a vessel is explicitly a maritime
claim under the Admiralty Act, 2017.
Section
4(1)(d) of the Admiralty Act, 2017,
includes: "claims for loss or damage caused by the operation of the vessel,
other than loss or damage to cargo and containers carried on the vessel."
Damage
to port infrastructure (docks, jetties, berths, navigational aids, etc.)
directly results from the "operation of the vessel" and would fall
squarely within this provision, allowing for the arrest of the vessel
responsible.
105.
Can a vessel be arrested for claims arising out of a ship management agreement?
Yes,
claims arising out of a ship management agreement can constitute a maritime
claim for which a vessel can be arrested.
Section
4(1)(f) of the Admiralty Act, 2017,
specifically covers: "claims for goods, materials, perishable or
non-perishable provisions, bunker fuel, equipment (including containers),
supplied or services rendered to the vessel for its operation, management,
preservation or maintenance including any fee payable or leviable".
Claims
for fees, disbursements, or other services provided under a ship management
agreement, which pertain to the "operation, management, preservation or
maintenance" of the vessel, would fall under this category, enabling an
arrest.
106.
What is the scope of "beneficial ownership" for sister ship arrest
under the Admiralty Act, 2017?
The
concept of "beneficial ownership" is crucial for sister ship arrests
under Section 5(2) of the Admiralty Act, 2017. While the Act does not
explicitly define it, Indian courts have interpreted it broadly to mean
effective control and ownership, not just legal title.
107.
Can a vessel be arrested for a claim for unpaid insurance premiums or mutual
insurance calls?
Yes,
claims for unpaid insurance premiums and mutual insurance calls are specifically
recognized as maritime claims under the Admiralty Act, 2017.
Section
4(1)(p) of the Admiralty Act, 2017,
explicitly states: "claims in respect of insurance premiums, including
mutual insurance calls, in respect of the vessel, payable by or on behalf of the
owner or demise charterer".
This
provision allows for the arrest of the vessel for such unpaid dues.
108.
What is the priority of claims in case of a judicial sale of an arrested vessel?
The
Admiralty Act, 2017, in Section 10, establishes a clear hierarchy
of priority for claims against the proceeds of a judicial sale of a vessel. This
is crucial for claimants to understand their potential recovery. The order of
priority, generally, is:
1.
Expenses incurred by the
Marshal/Sheriff for the arrest, detention, and sale of the vessel,
and other "custodia legis" expenses for the preservation of the
vessel. (These are usually paid first from the sale proceeds).
2.
Maritime Liens (as specified in Section 9(1)), which themselves have a specific inter
se priority:
o
(a) Claims for wages and other sums due to the
master, officers, and other members of the vessel's complement. (Highest
priority maritime lien)
o
(b) Claims in respect of loss of life or personal
injury occurring, whether on land or on water, in direct connection with the
operation of the vessel.
o
(c) Claims for reward for salvage services,
including special compensation under Article 14 of the International Convention
on Salvage, 1989.
o
(d) Claims for port, canal, and other waterway dues
and pilotage dues.
o
(e) Claims based on tort arising out of loss or
damage caused by the operation of the vessel, other than loss or damage to cargo
and containers carried on the vessel. (Generally, later maritime liens of the
same class take precedence over earlier ones, especially for salvage).
3.
Registered Mortgages and
Charges of the same nature on the vessel.
4.
Other Maritime Claims not secured by a maritime lien or a registered mortgage (these would
rank pari passu, i.e., equally, among themselves if funds are
insufficient to satisfy all).
5.
Unsecured Creditors.
This
hierarchy ensures that certain essential claims, particularly those related to
safety, environment, and seafarer welfare, are paid first.
109.
Can a vessel be arrested for claims arising from an agreement relating to the
carriage of goods, even if no bill of lading was issued?
Yes,
a vessel can be arrested for claims arising from an agreement relating to the
carriage of goods, irrespective of whether a bill of lading was issued.
Section
4(1)(g) of the Admiralty Act, 2017,
defines as a maritime claim: "agreement relating to the carriage of goods
or passengers on board a vessel, whether contained in a charter party or
otherwise".
This
broad language covers various contracts of carriage, including charter parties,
waybills, or even oral agreements, not just bills of lading. Therefore, a claim
for loss or damage to cargo, non-delivery, or other breaches of a carriage
agreement would be a maritime claim actionable by arrest, provided the
conditions of Section 5 are met.
110.
What is the territorial limit of a High Court's admiralty jurisdiction in India
for the purpose of arrest?
The
territorial limit of a High Court's admiralty jurisdiction for the purpose of
arrest is specified in the Admiralty Act, 2017.
Section
3(1) of the Admiralty Act, 2017, states: "Subject
to the provisions of sections 4 and 5, the jurisdiction in respect of all
maritime claims under this Act shall vest in the respective High Courts and be
exercisable over the waters up to and including the territorial waters of
their respective jurisdictions in accordance with the provisions contained
in this Act."
The
"territorial waters" of India extend up to 12 nautical miles
from the baseline. Each High Court with admiralty jurisdiction (e.g., Bombay,
Calcutta, Madras, Gujarat, Kerala, Orissa, Karnataka, Telangana and Andhra
Pradesh) exercises jurisdiction over the territorial waters adjacent to its
respective State. Therefore, a vessel can be arrested anywhere within these 12
nautical miles from the coast falling within the High Court's jurisdiction.
111.
Can a vessel be re-arrested in India after it has been released from a previous
arrest upon provision of security?
Generally,
no, a vessel cannot be re-arrested in India for the same claim for which
adequate security has already been provided and the vessel released. Section
11(2) of the Admiralty Act, 2017, specifically deals with this:
"A
vessel arrested under sub-section (1) of section 5 shall not be re-arrested in
respect of the same maritime claim unless— (a) the nature or amount of
security already provided in respect of such claim is inadequate; or (b) the
person who has provided the security is unlikely to be able to fulfil his
obligations; or (c) the vessel or the security has been released upon the
application or consent of the claimant, being induced by fraud or
misrepresentation of the defendant."
This
provision aims to prevent vexatious re-arrests and uphold the finality of
security arrangements. However, it allows for re-arrest in specific, limited
circumstances where the initial security is found deficient or was obtained
fraudulently. A vessel can, however, be arrested again for a different
maritime claim.
112.
Does the Admiralty Act, 2017, allow for arrest for claims arising from
environmental damage or threat thereof?
Yes,
absolutely. The Admiralty Act, 2017, specifically recognizes claims
related to environmental damage as maritime claims.
Section
4(1)(o) of the Admiralty Act, 2017,
includes: "claims for environment damage, including the cost of preventive
measures, removal, control, mitigation or clean-up operations, or threat of
environment damage or cost incurred or any other loss or damage caused by the
vessel arising out of pollution, contamination, hazard or similar
incident."
This
broad provision covers a wide range of environmental claims, demonstrating a
modern approach to maritime liabilities.
113.
Can a vessel be arrested for claims related to ship recycling or breaking?
While
the Admiralty Act, 2017, does not have a specific standalone provision for
"ship recycling claims", certain aspects of such claims could
potentially fall under existing maritime claim categories, depending on the
nature of the dispute.
However,
a claim specifically for "ship recycling" as a distinct head of
maritime claim is not explicitly mentioned. The ability to arrest would depend
on whether the specific claim can be squarely fitted into one of the enumerated
maritime claims under Section 4 of the Act.
114.
What if the claimant is a "slot charterer" or "voyage
charterer"? Can they arrest a vessel for a claim against the owner/demise
charterer?
Yes,
if the slot charterer or voyage charterer has a maritime claim against the owner
or demise charterer of the vessel, they can arrest the vessel.
The
Act does not discriminate based on the type of charterer (time, voyage, slot)
but rather on whether a valid maritime claim exists against the person liable
(owner or demise charterer) and whether the vessel being arrested (or its sister
ship) is linked to that liable party.
115.
Does the Admiralty Act, 2017, apply to claims arising from events that occurred
outside Indian territorial waters?
Yes,
the Admiralty Act, 2017, applies to claims arising from events outside
Indian territorial waters, provided the vessel concerned is subsequently found
within India's admiralty jurisdiction.
This
is a fundamental principle of admiralty law, allowing claimants to pursue their
remedies wherever the vessel may be located.
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