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HIGH COURT OF CALCUTTA
I.P. MUKERJI, J.
LMJ International Ltd. - Appellants
Vs
Owners And Parties Interested In The Vessel M. V. Osm Arena - Respondents
G. A. No. 2705 of 2010 and A. S. No. 3 of 2010
Decided on: March 08, 2011
M.V. OSM ARENA - ADMIRALTY SUIT - INDIAN BILLS OF LADING ACT, 1856 - INTERNATIONAL CONVENTION ON ARREST OF SHIPS, 1999 - Held that the owner was liable for the transaction as the master as the employee of the owner issued or authorized issue of a bill of lading. The plaintiff had to show that they had sold the goods at the trial, but there was prima facie evidence that they had sold the goods, which were resold by the buyer, to Tangshan Ganglu.
Fact of the Case:
The owner of the vessel M.V. OSM Arena filed an application for dismissal of Admiralty Suit A.S. No.3 of 2010 and vacation of the order of arrest dated 23rd February, 2010 and the order dated 20th May, 2010 for appraisement of the vessel for the purpose of its sale. The plaintiff, a voyage charterer, had instituted a suit against the owner for failure to deliver the cargo to the rightful claimant at the proper port in China. The owner contended that there was no privity of contract between the vessel owner and the plaintiff and that the dispute was only between the time charterer and the voyage charterer.
Finding of the Court:
The Court held that the owner was liable for the transaction as the master as the employee of the owner issued or authorized issue of a bill of lading. The Court also held that the plaintiff had to show that they had sold the goods at the trial, but there was prima facie evidence that they had sold the goods, which were resold by the buyer, to Tangshan Ganglu.
Issues: 1. Whether the owner was liable for the transaction as the master as the employee of the owner issued or authorized issue of a bill of lading. 2. Whether the plaintiff had sold the goods at the time of filing the suit.
Ratio Decidendi: 1. The Court relied on the well-settled principle that where the master as the employee of the owner issues or authorises issue of a bill of lading, the owner is bound by the transaction. 2. The Court examined the evidence on record and found that there was prima facie evidence that the plaintiff had sold the goods to Tangshan Ganglu.
Final Decision: The Court partly allowed the application and directed the applicant to furnish security of Rs. 5 crores to the satisfaction of the Registrar O.S. within four weeks from the date of the order. The Court also directed the applicant to pay Rs. 5 lakhs to the Advocate-on Record for the Plaintiff as reimbursement of the remuneration paid by the plaintiff to the Receiver and the costs for valuing the vessel and inviting offers for sale etc., further to the order dated 20th May, 2010 within the same period. Upon the applicant fulfilling the above conditions, the order of arrest would stand vacated and the Receiver discharged.
1. THIS is an application by the owner of the vessel M.V. OSM Arena. They are an incorporated company in Seoul, Korea, by the name of Shinhan Capital Company Limited. They seek dismissal of Admiralty Suit A.S. No.3 of 2010 and vacation of the order of arrest dated 23rd February, 2010 and the order dated 20th May, 2010 for appraisement of the vessel for the purpose of its sale.
2. THIS application was filed on 29th July, 2010. The vessel was arrested by an order of this Court on 23rd February, 2010 in an application for arrest being G.A. No. 510 of 2010 taken out by the plaintiff for such purpose. That order was extended from time to time and confirmed on 22nd June, 2010 without any participation from the owners. Sunwoo Merchant Marine, an enterprise of Seoul, Korea is stated to be the financial lessee of the vessel.
3. ON 3rd August, 2009 it granted a time charter of the vessel in favour of another shipping company also of Seoul Korea, being Seoil Shipping. The duration of this charter was described as "from the time of delivery for one TCT via safe port(s), safe berths, safe anchorage(s)" and so on. Now, this time charterer Seoil granted a voyage charter of the vessel to the plaintiff for 28 days.
4. IT appears to me that the time charter and voyage charter were made after the contract of carriage was executed between the owner the time charterer and the plaintiff described as a fixture note dated 1st August, 2009. The fixture note said that a quantity of 43,000 metric tons of iron ore of which at least 22,000 metric tons were to be loaded at Haldia would be carried by the vessel from Haldia and Paradeep or Vizak or Gangavaram to a discharge port in China excluding the Yangtze river. 100% freight would have to be paid within three banking days of completion of loading. The master was to give an authority letter to the charterer's nominated agents to sign the bills of lading on behalf of the master. On and from the third week of August, 2009 the vessel started loading the said cargo.
5. A bill of lading was issued on 13th October, 2009 by one S.K. Ghosh, describing himself to be representing Bon Voyage Shipping and Logistics, an organisation said to be the agent of the master. The gross weight of the goods as mentioned in this document is was 43,990 wet. metric tons. The shipper was the plaintiff, the consignee was "to order" and the notified party was one Swiss Singapore Overseas Enterprises PTE Ltd. of Singapore. The port of discharge was mentioned as "any main port, China". "Freight prepaid" is stamped on this document. The goods were described as "clean on board". Sometime in October, 2009 or thereabouts the vessel left the shores of India.
6. IT appears that very soon there were disputes between the parties. The vessel, in or about December, 2009, had revisited India for the purpose of discharge of some cargo. Promptly a suit was instituted in this Court by the plaintiff being Suit No. 353 of 2009. On 11th December, 2009 an order was passed in an interlocutory application therein by Syamal Kanti Chakrabarti, J. restraining the owners to deal with the cargo contained in it. In January, 2010 another application was filed by the plaintiff being G.A. No. 174 of 2010, where, on 19th January, 2010 an order was passed restraining the vessel from leaving the port. That order restraining the vessel from leaving the Indian port is still operative. Many proceedings are pending between the parties. But I will not discuss all of them.
7. I will only discuss in brief some proceedings which are going on between the parties or their agent or buyer in China. A few documents from proceedings in the Tianjin Maritime Court in China have been brought on record by the applicant by way of a supplementary affidavit. They reveal, at the prima facie level that the plaintiff sold the entire shipment to one concern Express Well. Express Well in turn sold the consignment to another company Tangshan Ganglu Iron and Steel Company Limited (hereaf
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