1. PLAINTIFF, a Company incorporated under the laws of Marshal Islands and engaged in the business of shipping, has filed this suit as per the pleadings in paragraph 3 of the plaint for security pending ongoing London Arbitration which has commenced seeking repossession of M.V. STAR 7 [ex-M.V. Michail Arhangelos] [for short, defendant-vessel] and/or the balance of the amount claimed in the arbitration being the market value of the vessel. It is further pleaded that a fraud was played by defendant No.2 against the plaintiff and further fraud was played by defendant No.2 against defendant No.3 and, therefore, the plaintiff is also seeking arrest and sequestration of the vessel and for a direction that the possession of the arrested vessel be handed over to the plaintiff. It is pleaded that the defendant-vessel is lying at the Port of Alang and this Court has admiralty jurisdiction over the defendant-vessel. Defendant No.2 is a registered company trading in ship scraps situated at Hong Kong and defendant No.3 is also in the business of ship scraps.

2. THE plaintiff has produced true copies of registration certificates initially registered on 1st December 2005 at St. Kitts and Nevis International Ship Registry and the said registration was valid till 30th November 2009. Subsequently, from the record it appears that, the registration of the vessel at St. Kitts and Nevis International Ship Registry expired on 30th November 2009 and, from the letter dated 23rd December 2010 addressed by the plaintiff to Tanzania Zanzibar International Registry of Shipping, the vessel was registered provisionally at Panama Registry and the vessel M.V. Michail Arhangelos was registered at St. Kitts and Nevis International Ship Registry on purchase by defendant No.2, Star Matrix Limited. Arrangements were made to register the vessel at Tanzania Zanzibar International Registry of Shipping.

However, from the pleadings and submissions, it appears that on 2nd April 2010, a Memorandum of Agreement [MOA] was entered into between the plaintiff [seller] and defendant No.2, Star Matrix Limited, Hong Kong [buyer] for sale of the defendant-vessel and it was agreed that the sale consideration would be US $ 1.1 Million and as per the terms of the MOA, certain outstanding wages and charges were to be paid along with an understanding that after payment of certain wages and dues, the balance money was to be kept in a joint account between the seller and the buyer in Punjab National Bank, Hong Kong, in a separate account and this money was to be released to the seller upon the vessel being dismantled by 50% or maximum as per the days of beaching at the breakers yard. It also reserved the right of the seller to cancel the contract and the amount deposited as per clause 2 shall be forfeited to the seller and, in case of dispute arises in connection with any interpretation of any term of the contract, it was to be decided by the arbitration in the City of London, U.K. with English law to apply. The plaintiff also raised commercial invoice dated 8th April 2010 upon the plaintiff for the sum of sale consideration namely US $ 1.1 Million. In the meanwhile, according to the plaintiff, communication took place and, though full payment was not received from defendant No.2, a receipt for full payment for US $ 1.1 Million was issued by the plaintiff and possession of the defendant-vessel was handed over to defendant No.2 and, accordingly, addendum dated 5th May 2010 was executed and due to part payment and understanding and assurance by defendant No.2 to pay the balance amount, the bill of sale was drawn for the full amount. Since no response was received for payment of the balance due, notice of cancellation of the MOA and bill of sale was served upon defendant No.2 and an arbitrator was appointed and the MOA and bill of sale came to be cancelled and defendant No.2 was called upon to deliver the vessel as they had breached the terms of the MOA and the title and ownership