Concept of ship arrests in India & maritime law

Maritime Law

Over the centuries, the maritime law has developed since the colonial times which are considered as a wide ranging branch of law.  The inception of the maritime law can be traced down to British legislations on the various aspects such as marine insurance, carriage of goods by sea, ship sale and building contract, ship financing and ship mortgage etc.  Therefore, the admiralty law is a distinct body which governs the maritime questions and the offenses. It comprises of both the domestic as well as private international law governing the relationship between the private entities operating the vessels on the oceans and all the other matters dealing with marine commerce, shipping, sailors, marine navigation and the transportation of passengers and goods by sea. It also covers the commercial activities occurring on land which are maritime in character.

With respect to the ship arrests in India, the Admiralty Court Act 1861, the Admiralty Court Act, 1890 and Admiralty Court Act 1891 would be applicable.

CONCEPT OF SHIP ARREST IN INDIA; SHIP AND SISTERSHIP

SHIP AND SISTERSHIP

The word vessel has been substituted by the word ship and is defined and includes any ship or boat or any other description of vessel used in navigation but not propelled by oars. As per Section 2 of the Admiralty Court Act, 1861 “ship” shall include any description of vessel used in navigation not propelled by Oars. With respect to the Dead Vessel Doctrine, a vessel which is permanently withdrawn from use for navigational purpose, it shall not be termed as ship because such vessel cannot be engaged for the trade or commerce activities. Therefore, a ship can be a live ship not a dead vessel which is kept in the dry dock.

The term sistership can be referred as a ship has the same beneficial owners as the ship in regard to which the claim arose. The High Court has the jurisdiction to arrest the sistership for securing the maritime claim. Such admiralty jurisdiction is not only against the offending ship but also against the sister ship to which the claim arose.

ARREST OF SHIP

The main purpose for the arrest of the ship is to obtain the security for satisfaction of judgment in the action in rem therefore it is necessary to arrest the ship so as to establish the jurisdiction.

The merchant ship travels from port to port among the different parts of the world carrying goods or the passengers. The liabilities are occurred in the course of their voyage and are subjected to the jurisdiction of the foreign states when they enter into the foreign states. Also, they are liable to be arrested for the enforcement of the maritime claims, or are seized in execution or to the satisfaction of judgments in the legal actions arising out of collisions, salvage, and loss of life or damage to the goods. In case if they violate any regulations, safety measures or any other cause, then such ships are liable to be detained or confiscated by the authorities of the foreign state.

If the plaintiff seeking the claims against the foreign ship has no effective remedy in the cases where it has sailed away or the owner has neither the property nor any residence within the jurisdiction. In such circumstances, the plaintiff has the option to detain the ship by obtaining the order of attachment when there is a fear that the ship is likely to slip out of the jurisdiction without any security to the plaintiff.

The following are the purposes, when the ship can be arrested:

  • To acquire the jurisdiction
  • For obtaining any security for the satisfaction of the claim
  • For the execution of a decree.

In the first two cases, the court having the admiralty jurisdiction has the discretion to insist upon security to be furnished by the plaintiff to the defendant in the case when the arrest was wrongful and obtained maliciously or in bad faith. Therefore the claimant is liable to pay the damages for the wrongful arrest being made.

The attachment to the ship is only provisional and under the custody of the marshal or any other authorized staff. The main purpose is mainly to detain the ship till the matter is settled by the competent court. If there is any interference with the custody of the authorized officer then it shall be treated as competent of court. Such attachment is only safeguarding the interest of the plaintiff in the form of security. If the sufficient bail is made which cover the claim, then the court may order to release the ship if is arrested under the order of attachment.

In cases where the ship is arrested before any judgment and has not been released by the defendant by putting any sufficient bail or it is deteriorating, then the court can order the sale of the property upon the notice being duly served to the interested parties.

As mentioned above the action in rem is generally taken against the ship so as to satisfy the claims of the plaintiff out of the res, therefore, the ship is treated as person and the owner of the ship is liable to be proceeded by the plaintiff in personam. The ship has to be in the jurisdiction where the court has initiated the proceedings.

JURISDICTION AND THE APPLICABLE PROVISIONS OF LAW

There are few courts which are empowered to exercise the admiralty jurisdiction. The three courts of Admiralty i.e. Bombay, Calcutta and Madras were having the specific jurisdiction. Such jurisdiction is concurrent and extends towards the territorial coast line of India. During the course of time, the high court of Calcutta, Bombay, madras, Gujarat, Andhra Pradesh and Orissa have the jurisdiction to entertain the admiralty matters.

Earlier, the Gujarat High Court did not have the power to exercise the Admiralty jurisdiction but with the passage of time  the cases for admiralty actions are filed before the court and for invoking the jurisdiction, not just vessel should be there but the cause of action (wholly or partly) should also take place in Gujarat. As decided in the case of Fuji Trading (Singapore) Pte Ltd and in Quantum Marineworks Singapore Pte Ltd.

An order of the arrest of a ship passed from High Court of Bombay can be executed in any Indian territorial water. In the appeal filed before the High Court of Bombay, Appeal No. 59 of 2000, the court held that the admiralty jurisdiction extends throughout the territorial water of India. However the appeal was filed before the Supreme Court of India regarding the jurisdiction but the Honorable Court held that such question of territorial jurisdiction did not require any consideration and was left open.

Whenever the question relating to the obtaining of order or arrest of ship comes, then the Bombay High Court is preferred because the order passed from the court shall be applicable to the Indian Territorial Water wherever the ship is found. Such pan India Admiralty Jurisdiction in relation to the arrest is vest with the Bombay High Court only but the other above mentioned High Court has the Admiralty Jurisdiction.

When time comes for decision as to which court of India one should approach for obtaining an order of arrest, Bombay High Court is preferred as order for arrest of a vessel obtained from the Bombay High Court can be executed anywhere in Indian territorial waters, wherever the vessel is found.

CLAIMS FOR WHICH THE ARREST IS PERMISSIBLE

The Indian courts having the Admiralty Jurisdiction also have the jurisdiction to over the claims and hear and determine with respect to the claims as mentioned under Article 1 of the International Convention for the Unification of Certain or under Article 1 of the International Convention on the Arrests of Ships, Geneva.

As per Brussels Arrest Convention and the Geneva Arrest Convention, the claims for arresting the ship are as follows:

  • Any damage caused by the ship in case of collision or by any other activity;
  • Loss to the life and any personal injury caused with the operation of any ship; 
  • Loss or damage caused to the goods which are carried by the ships; 
  • Salvage or its operation, bottomry, towage, pilotage; 
  • Construction, repair or equipment of any ship charges and their dues; 
  • Dispute in relation to the title or ownership of the ship;
  • Disputes regarding the ownership and possession of the ship;
  • Compensation with respect to the salvage operations or where the ship carrying the cargo is threatened to the environment;
  • Any threat of damage or other damage caused to the environment, coastline or the other related to the interest;
  • Loss incurred or likely to be incurred by the third party in relation to the damage or cost or any other loss; 
  • Any loss Goods or any other equipment or any other services provided to the ship for the operation, management or any other maintenance; 
  • Dues and charges occurred on the port, canal, dock , harbor or other waterways; 
  • Wages and the other amount and charges due to the master, officers and the other member in respect to the employment on the ship which includes the cost of other social insurances which is payable; 
  • Commissions or any other agency fees which are payable in respect of the ship or on the behalf of the owner or the demise charter;
  • Dispute arising out of the contract with respect to the sale of the ship.

PROCEDURAL REQUIREMENT FOR THE ARREST OF THE SHIP

  • A claimant executes the power of Attorney to the person who can act on behalf of the claimant. Such Power of Attorney should be properly executed, notarized and legalized which is required to be stamped under the laws of India and has to be shown before the court for the filing of the plaint.
  • Notice is required to be given to the Consul General as per the Rules of the High Court
  • Claimant shall file the plaint along with the undertaking, draft the warrant of the arrest and the affidavit before the court having the admiralty jurisdiction. All the other attachments and the documents shall be filed at the time making the application for the arrest.
  • Such application shall be moved before the Admiralty judge and the order is passed or he can dictate the separate order for the arrest of a vessel.

AFTER THE ARREST
Once the warrant of arrest is issued from the registry and the fee and the other expenses are deposited, the intimation shall be given to the Marshall or the authorized officer. The officer has the authority to arrange the substitute in place of the arrested ship and the plaintiff or his advocate shall provide a conveyance to the ship for the service.The Marshall and the other officers are required to have the undertaking from the plaintiff to make further deposits towards the expenses as incurred by him in connection with the custody of the ship under the arrest. They are required to intimate the custom and harbor authorities of the arrest.

In case the ship is released upon the security being furnished, unless compromised, the suit will proceed for the trial. There are certain cases, where the ship is not released because of the owner’s bankruptcy or the master or the crew may abandon the ship therefore the marshal or the authorized officers shall protect the ship and the equipments in accordance with the regulations.

CONCLUSION

The ship arrest is generally the quickest way of obtaining the security against the claims or for recovering the unpaid dues. Such matter is considered to be straightforward and can be arranged at a reasonable cost but in case of the wrongful arrest the plaintiff has to incur such cost. This is the most suitable remedy for creditors, like owners who need to repossess the vessel, the suppliers who have not been paid or the outstanding wages of the crew members. Therefore, such arrests are relatively inexpensive and easy solution for obtaining the relief globally.

 

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