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September 05, 2014

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Can an Indian Admiralty Court Arrest an Indian Flagged Vessel A Tale of Two Courts


- Amitava Majumdar (RAJA), [ ]
- Aloy Das Mahapatra, [ ]

Amitava Majumdar & Aloy Das Mahapatra

The Calcutta High Court interprets the M.V. Elisabeth case of the Apex Court to conclude that it cannot exercise admiralty jurisdiction with respect to vessels flying the Indian flag.

We trace the arguments presented in Court as well as the Court's finding and see the impact that the decision will have on parties looking to arrest Indian flagged vessels.

By a judgement dated 24th September, 2013, the Calcutta High Court has curtailed its admiralty jurisdiction with respect to vessels flying the Indian flag i.e. registered in India. The Hon'ble Justice Biswanath Somadder has, in the matter of Porto Maina Maritime SA versus Owners & Parties interested in the vessel M.V. Gati Majestic, interpreted the decision of the Supreme Court in the case of M.V. Elisabeth and Others vs. Harwan Investment and Trading Co. - 1993 Supp (2) SCC 433("MV Elisabeth") to arrive at the conclusion that it could not exercise 'Admiralty Jurisdiction' with respect to the vessel M.V. Gati Majestic which was registered under the Indian flag.

Brief Facts:


The claim that arose in the instant case was for damages that resulted from a collision that took place between the vessel M.V. Gati Majestic and M.V. Porto Maina at Haldia Docks. The claim for damages that arose from this collision was for a sum of INR 36,66,000. The Calcutta High Court had to interpret the 'locus classicus' propositions of law laid down by the Apex Court in the case of M.V. Elisabeth to make a determination on whether an Indian flagged vessel can be arrested.

The counsel for the Plaintiff contended that the High Court of Calcutta can exercise Admiralty Jurisdiction over any vessel irrespective of her nationality in light of section 7 of the Admiralty Court Act, 1861 which permits the High Court of Admiralty to have jurisdiction over any claim for damages done by any ship, read along with clause 32 of the Letters Patent, 1865 which provides that the High Court shall have and exercise admiralty jurisdiction. He also relied on the case of M.V. Elisabeth to support his contention that the scope of admiralty jurisdiction contemplated under the 1952 Arrest Convention (International Convention Relating to the Arrest of Sea-Going Ships, Brussels 1952) read along with the Administration of Justice Act, 1956, in England, did not restrict or prohibit arrest of an Indian vessel by admiralty courts in India as these were the same authorities which were relied on by the Supreme Court of India in the case of M.V. Elisabeth.

The Counsel appearing for the Defendant Vessel put forth a divergent interpretation of the Apex Court judgement of M.V. Elisabeth to highlight the point that the admiralty jurisdiction was not available if at the time of institution of the proceedings, any owner or part owner of the ship was domiciled in England (to be read as India in the context of the present matter). Counsel for the Defendant contended that presently, an English Admiralty Court can arrest any ship irrespective of her nationality pursuant to section 1 (4) of the English Administration of Justice Act, 1956. The English Administration of Justice Act, 1956 would however not have the force of law in India as it is a legislation enacted after Indian independence and hence cannot be taken into account by the Indian Court by virtue of Articles 225 and 372 of the Constitution of India which allowed the legal developments that took place in England prior to 1947 to be applicable to India with equal force.

The counsel for the Defendant Vessel also submitted that the very purpose of an action in rem (making an inanimate object a Defendant in a suit) was to compel the owner of the Defendant Vessel to enter appearance before the Admiralty Court. In so far as a vessel owned by an Indian shipowner is concerned, the action in rem is of no consequence as the Indian Court has power to coerce the Indian ship owner to enter appearance in Court.

Thereafter, reliance was placed upon Rule 51 of the Admiralty Rules of the Calcutta High Court for the proposition that when there are no specific provisions under the Admiralty Rules of the Court, the proceedings in admiralty suits would have to be regulated by the rules and practice of the Courts in exercise of its ordinary original civil jurisdiction i.e. the provisions of the Code of Civil Procedure, 1908 would apply.

His argument was that, therefore, Order 38 Rule 5 of the Code would prevent the proceeding against the property of an Indian Defendant without first establishing a prima facie case in personam against the Indian Defendant.

The Calcutta High Court after considering the rival submissions of both parties and its interpretation of the M.V. Elisabeth case came to a finding that the admiralty jurisdiction of the High Court of Calcutta can be invoked only in the case of the presence of a "foreign ship" in Indian waters. The Calcutta High Court, therefore, held that it was not open to the Plaintiffs, in the present case, to invoke the Admiralty jurisdiction of the High Court of Calcutta in respect of an Indian flagged vessel registered under Indian laws.

The view of other courts:


With divergent views of various Indian courts on whether an Indian ship is amenable to an order of arrest by an Indian court in exercise of its admiralty jurisdiction, it would be interesting to see whether other High Courts are persuaded by one or the other judgement/view

The Bombay High Court in the case of Crown Maritime Co. (I) Ltd. vs. Barge Salina II 2008(1) Bom. CR 143 ("Barge Salina II") in its interpretation of M.V. Elizabeth came to a finding that High Courts in India would have unlimited jurisdiction, including the jurisdiction to determine their own powers. The Bombay High Court, in its interpretation of M.V. Elisabeth held that "all persons and things within the waters of a State shall fall within the Court's jurisdiction unless specifically curtailed or regulated by Rules or International law." And it was for this reason that it held that the Supreme Court's observations cannot be construed in such a manner so as to take away the jurisdiction of the Admiralty Court to proceed against an Indian flagged vessel.

The Gujarat High Court is yet to make definitive pronouncement on whether the court in exercise of its admiralty jurisdiction can arrest an Indian ship.

That said, the Gujarat High Court in the case of Sri Lanka Telecom Plc v M V ACX Hibiscus Admiralty Suit No. 6 of 2012 in its interpretation of the M.V. Elisabeth case came to a finding that a "plaintiff can invoke the Admiralty jurisdiction of the High Court only if (i) an action in rem is maintainable against a foreign defendant Vessel and (ii) the foreign defendant Vessel is in the territorial waters of India." In these circumstances, there are strong arguments in favour of the contention that the Gujarat High Court cannot exercise admiralty jurisdiction over an Indian flagged vessel.

The Kerala High Court is presently considering this issue and is about to pass a judgement on it.

Conclusion


There have been divergent views of various Indian Courts on whether an Indian ship is amenable to an order of arrest by an Indian Court in exercise of its admiralty jurisdiction. It would be very interesting to see whether the High Courts of Karnataka, Kerala, Madras, Hyderabad, Orissa are persuaded by the judgement of the Bombay High Court in Barge Salina II or the Calcutta High Court in M.V. Gati Majestic. It is matter of time before the Supreme Court of India makes a pronouncement on this issue.

 

Disclaimer - The views expressed in this article are the personal views of the authors and are purely informative in nature.

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