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2026 Supreme(AP) 53

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
RAVI NATH TILHARI, MAHESWARA RAO KUNCHEAM, JJ.
 
Zion Shipping Ltd., Represented By Its Authorised Signatory Mr Madala Siinivas – Petitioner
Versus
Sarala Foods Pvt Ltd and Ors. – Respondents
I.C.O.M.A.A. No.2 of 2025
Decided On : 07-01-2026

Advocates Appeared:
For the Petitioner: Sai Sanjay Suraneni

An attachment before judgment requires a strong prima facie case and demonstration of urgency, which the appellant failed to establish.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 37 - Appeal against vacating interim relief in arbitration proceeding - Appellant sought interim measures to secure claim for demurrage; the court found no strong prima facie case or balance of convenience favoring appellant - Appellant's claim based on unliquidated damages; attachment prior to judgment not justifiable as no crystallized debt existed - Appellant's delay and failure to demonstrate urgency led to dismissal of appeal. (Paras 32, 44, 61)

(B) A party seeking attachment before judgment must demonstrate a prima facie case and a risk of asset dissipation; vague and unsupported allegations are insufficient. (Paras 28, 54)

Facts of the case:
Appellant sought ex parte attachment of cargo due to alleged default in demurrage payment under a maritime contract; respondents contended no title existed at the time of attachment. Appellant delayed action for three years, raising invoices without response. Respondents complied with initial court orders by depositing required security.

Findings of Court:
Court dismissed appeal based on absence of strong prima facie case and balance of convenience not favoring appellant. Court upheld lower court's conclusion on lack of urgency and necessity for attachment.

Issues: Does the appellant have a strong prima facie case? Is the balance of convenience in favor of granting the interim relief?

Ratio Decidendi: The appellant failed to prove a strong prima facie case and urgency justifying attachment; claims of demurrage and asset dissipation were unsubstantiated.

Result: Appeal dismissed.

Table of Content
1. jurisdiction under arbitration act (Para 1 , 2)
2. factual background of the case (Para 6 , 8 , 9 , 11)
3. respondents' claim of title (Para 12 , 14)
4. court's scrutiny of evidence and claims (Para 15 , 17 , 19 , 20)
5. legal arguments on claim validity (Para 21 , 22)
6. scope of appellate jurisdiction (Para 27 , 28 , 33)
7. principles for granting interim measures (Para 34 , 36 , 39)
8. assessment of prima facie case (Para 44 , 52 , 56)
9. ruling on discretionary orders (Para 58 , 61)
10. conclusion of the court (Para 62 , 63)

JUDGMENT :

Maheswara Rao Kuncheam, J.

The present appeal is filed under Section 37 of the Arbitration and Conciliation Act, 1996, by the appellant Zion Shipping Ltd., being aggrieved by the Order dated 13.10.2025 passed by the learned Single Judge of this Court in ICOMAOA No.5 of 2024.

2. The backdrop of the case is that initially, the appellant Company, by invoking Section 9 of the Arbitration & Conciliation Act (in short ‘Act’), filed ICOMAOA No.5 of 2024, before the learned Single Judge, seeking the following main relief:-

“…..pleased to a Ex parte order maintenance of the status quo attachment preservation interim custody or sale of 1600 MT of rice loaded/ being loaded on to the vessel MV BULK MANARA at the anchorage of 4th Respondents port pending the issuance of arbitration award b Ex parte direct Respondents to furnish security in favor of the Petitioner for the sum of USD 296,326.74 along with interest pending the issuance of arbitration awards and pass…..”

3. At the time of admission, the learned Single Judge on 23.04.2024 passed the ex parte conditional order of attachment of stock in trade of 1600 MTs of rice, subject to furnishing of security of USD 29,296,326.74 within 24 hours. The 1st respondent Company complied with the said conditional order dated 23.04.2024, by depositing the security amount on 24.04.2024 before the Registrar (Judicial) of this Court.

4. However, the 1st respondent Company filed ICOMAA No.3 of 2024 against the interim order dated 23.04.2024, passed in ICOMAOA No.5 of 2024 before the Division Bench of this Court. After hearing both sides, the Hon’ble Division Bench pleased to direct the 1st respondent to submit its objections /explanation before the learned Single Judge by stating their case. Further, it is observed that in such an event, the learned Single Judge shall pass appropriate orders, in accordance with law.

5. Consequently, the 1st respondent Company filed I.A.No.1 of 2025 under Order XXXIX Rule 4 C.P.C., to vacate the ex parte interim order dated 23.04.2024 of the learned Single Judge of this Court. The learned Single Judge, after hearing the arguments on both sides elaborately in ICOMAOA No.5 of 2024 pleased to pass the orders dated 13.10.2025, whereby and whereunder vacating the interim orders dated 23.04.2024 made in I.A.No.1 of 2024 and, as a result, dismissed the application filed by the appellant Company and also directed the Registry to return the security amount deposited by the 1st respondent. Assailing the said order dated 13.10.2025 made in ICOMAOA No.5 of 2024, the instant appeal emanated under Section 37 of the Act before us.

BRIEF CASE OF THE APPELLANT:

6. The appellant, Zion Shipping Ltd., is a company incorporated under the laws of Hong Kong, engaged in the commercial activity of owning and chartering ocean-going vessels for maritime transportation. Respondent Nos.1 to 3 are entities involved in the export of agricultural commodities, primarily rice, etc., and are stated to have availed the services forming the subject matter of the present dispute. Respondent No.4 is the operator of the Kakinada Port and has been impleaded only as a formal party, without any independent relief against it.

7. The appellant and respondent Nos. 1 to 3 entered into a fixture note/charterparty agreement dated 12.03.2021, under which the appellant, as owner of the vessel MV HAN THAR, chartered the said vessel to respondent Nos. 1 to 3 for the carriage of 9,00

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