Back
Bombay High Court
S.J. KATHAWALLA, J.
Bulk Ship Management S.E.A. & Anr.
Vs.
The Bunkers onboard the Ship M.V. African Eagle & Ors.
Decided on : 4/2/2013
The Court held that the arrest of bunkers and freight was not permissible, especially considering that the bunkers belonged to MUR Shipping BV. The Court also held that the Plaintiff could not arrest the bunkers thereby warranting the setting aside of the order of arrest dated 7th January 2013.
Fact of the Case:
The Plaintiff Rushab Ship International LLC seeks arrest, sequestration, condemnation and sale of the bunkers on board Defendant No.2 M. V. African Eagle and arrest and deposit of freight due for transportation of cargo laden on Defendant No. 2 at the port of Mumbai, for securing the Plaintiff's claim in arbitration proceedings for a sum of US $ 816,531.22 and accrued interest of US $ 9684.96 and cost in the sum of US $ 826,216.18 for the present proceedings. The Plaintiff has undertaken to invoke arbitration under the Charterparty Agreement dated 16th March 2012. In the meanwhile, as the Defendant No.2 vessel has entered the Mumbai Port, the Plaintiff has filed the present action seeking security for the arbitration.
Finding of the Court:
The Court found that the Plaintiff had not made out a prima facie case against Defendant No.3 for recovery of any dues as alleged but except for a small portion, the bunkers do not belong to Defendant No.3 and without prejudice to their contention that the bunkers on board Defendant No.2 vessel cannot be arrested and/or proceeded against in Admiralty, for the purpose of the present application, whilst proceeding on the facts of the case, the Defendant No. 3 asserted that the Plaintiff is not entitled to arrest any part of the bunkers, and submitted that if at all the same are to be arrested, the said arrest cannot exceed the bunkers worth US $ 34,692.80 i.e. 61.40 mt of HO and 10.39 mt of DO.
Issues: 1. Whether the bunkers can be arrested and/or proceeded against in Admiralty, and whether the bunkers on Board Defendant No.2 are owned by Defendant No.3? 2. Whether the arrest of freight is permissible under Admiralty jurisdiction?
Ratio Decidendi: 1. The Court held that the Plaintiff had not made out a prima facie case against Defendant No.3 for recovery of any dues as alleged but except for a small portion, the bunkers do not belong to Defendant No.3 and without prejudice to their contention that the bunkers on board Defendant No.2 vessel cannot be arrested and/or proceeded against in Admiralty, for the purpose of the present application, whilst proceeding on the facts of the case, the Defendant No. 3 asserted that the Plaintiff is not entitled to arrest any part of the bunkers, and submitted that if at all the same are to be arrested, the said arrest cannot exceed the bunkers worth US $ 34,692.80 i.e. 61.40 mt of HO and 10.39 mt of DO. 2. The Court held that an order arresting freight qua the cargo on board Defendant No.2 cannot be passed by this Court.
Final Decision: The Court held that the Defendant No. 3 shall give security only to the extent of US $ 34692.80 being the value of bunkers owned by them on the date of arrest i.e. 7th January 2013. The order dated 7th January 2013 directing arrest of freight is vacated. Upon the Defendant No. 3 furnishing security as set out in clause (i) above, the order of arrest dated 7th January 2013 shall stand vacated and the Defendant No. 1 vessel shall stand released and allowed to sail immediately.
1. By the above Suit, the Plaintiff Rushab Ship International LLC seeks arrest, sequestration, condemnation and sale of the bunkers on board Defendant No.2 M. V. African Eagle and arrest and deposit of freight due for transportation of cargo laden on Defendant No. 2 at the port of Mumbai, for securing the Plaintiff's claim in arbitration proceedings for a sum of US $ 816,531.22 and accrued interest of US $ 9684.96 and cost in the sum of US $ 826,216.18 for the present proceedings. The Plaintiff has undertaken to invoke arbitration under the Charterparty Agreement dated 16 th March 2012. In the meanwhile, as the Defendant No.2 vessel has entered the Mumbai Port, the Plaintiff has filed the present action seeking security for the arbitration.
2. A Judges Order being No. 07 of 2013 was moved before this Court on 7th January 2013, when this Court passed an order for arrest of Bunkers on board the Defendant No.2 vessel M.V. African Eagle along with freight due for transportation of cargo laden. The Defendant No.3 has now moved an application to vacate the said order of arrest of Bunkers on board the Defendant No.2 along with the freight due for transportation of cargo laden.
3. Briefly set out, the facts in the matter are as under:
4. According to the Plaintiff, by a Charterparty dated 16th March 2012, the Plaintiff chartered the vessel M.V. Don Raul to Defendant No. 3 i.e. Bulk Ship Management S.E.A., a Company incorporated under the laws of the Republic of Malaysia. Under clause 5 of the said Charterparty, hire charges were payable 15 days in advance. Furthermore, under clause 43, Defendant No. 3 was not entitled to withhold any disputed amounts of hire under any circumstance.
5. According to the Plaintiff, in keeping with the terms of the Charterparty, the Plaintiff regularly raised invoices upon Defendant No.3 and forwarded the same to them. According to the Plaintiff, Defendant No. 3 only paid the first two hire payments in full and thereafter on one pretext or the other failed to pay part or any of the hire charges. Defendant No.3, inter alia, told the Plaintiff that since no payments were forthcoming from the sub-charterers, Defendant No.3 could not pay hire charges until such payments were received by it. According to the Plaintiff, on 30th October 2012, Defendant No. 3, whilst purporting to terminate the Charterparty, sought to settle the matter by offering a paltry sum which was rejected by the Plaintiff on 7th November 2012. Thereafter Defendant No. 3 by their email dated 9th November 2012 claimed that US$ 99,600.93 were due from the Plaintiff to Defendant No.3.
6. The Plaintiff being aggrieved by the failure of Defendant No. 3 to pay hire charges, sent a final notice dated 14 th November 2012 for its claim of US$ 877,199.47 (which was subsequently revised to US$ 816,531). According to the Plaintiff, their claim in the suit is genuine as admittedly the vessel M.V. Don Raul was on charter with the Defendant No. 3 till 17th November 2012.
7. The Plaintiff has undertaken to invoke arbitration under the Charterparty Agreement dated 16th March 2012 and has filed the present suit seeking security for their claim against Defendant No.3. Defendant No.1 in the suit are the Bunkers on board Defendant No.2 and the freight due for transportation of cargo laden on her at the Port of Mumbai. Defendant No. 2 M.V. African Eagle is a foreign sea going vessel flying the flag of the Bahamas. Defendant No.2 is currently within Indian territorial waters, lying at the Port and in the Harbour of Mumbai and therefore within the jurisdiction of this Court. Defendant No.3 Bulk Ship Management S.E.A is a Company incorporated under the laws of Malaysia and operates as a chartering company. Defendant No. 4 is the registered owner of Defendant No.2 vessel and Defendant No.5 is the holding Company of MUR Shipping BV, which is a time charterer of Defendant No. 2.
8. The Plaintiff has in the Plaint stated that the Plaintiff has reason to belie
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
