IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
V.M. Pancholi, J.
M.V. Cape Climber - Appellants
Vs.
Glory Wealth Shipping Pvt. Ltd. - Respondent
Civil Application (OJ) No. 96 of 2015 in Admirality Suit No. 30 of 2014
Decided On: 13.07.2015
Civil Procedure Code, 1908 Section 44A - Limitation Act, 1963 - Admiralty Jurisdiction - Enforcement of foreign decree - Rejection of the plaint - Plaintiff gave notice to ICI to make the outstanding payment - However, ICI did not make such payment to the plaintiff. The plaintiff, therefore, invoked the London arbitration clause of the charter party and referred all the disputes and differences arising out of the said charter party to arbitration in London and appointed arbitrator and thereby called upon ICI to appoint their arbitrator which they failed to appoint. The dispute referred to arbitration by the plaintiff - Plaintiff that ICI has not challenged the award before the High Court at London. As per the case of the plaintiff, ICI is liable under the judgment and decree of High Court of Justice, Queen's Bench Division, Commercial Court, London to pay an amount of USD 4,70,92,790.74 to the plaintiff along with GBP 4,750 towards the arbitrator's fees - Whether the claim of plaintiff is vexatious or frivolous - Plaintiff is having reasonable arguable case in law - If the order of arrest is vacated without furnishing security by the defendant, whether the plaintiff would suffer irreparable loss or not - Held, all the three possibilities can arise in International Law and all remedies are open to the party. Law does not prohibit exercise of any option or to come for execution of decree. There is nothing in the provisions of the Arbitration Act and Code of Civil Procedure, 1908, which prohibits expressly or impliedly a party from pursuing either remedy and such prohibition cannot be read in absence of any specific bar - plaintiff is not vexatious or frivolous. The plaintiff is having reasonably arguable case on facts as well as on law and there is no reason to allow this application filed by the applicant. The plaintiff is having prima facie case as well as balance of convenience is also in favour of the plaintiff and therefore if the arrest order passed by this Court is vacated without issuing any directions to the applicant - original defendant to furnish adequate bail or security, the plaintiff would suffer irreparable loss. Moreover, if the order of arrest is vacated and ultimately the suit of the plaintiff even if decreed against the defendant, the same would be unenforceable in law because in the meantime the vessel would leave the Indian territorial waters - Application dismissed.
V.M. Pancholi, J.
1. Rule. Learned advocate Ms. Paurami B. Sheth waives service of notice of Rule for the respondent - original plaintiff.
2. The applicant - original defendant has filed this application for the following relief/s:
"A. That the ex parte order of arrest of the Defendant Vessel dated 29th December 2014 be vacated and/or set aside; and/or
B. Rejection of the plaint under Order 7, Rule 11(a) and/or (d); and/or
C. That pending the hearing and final disposal of the instant Original Jurisdiction Civil Application, this Hon'ble Court be pleased to pass the following orders at the ad interim stage itself:
I. Order directing the Plaintiff to pay port anchorage charges imposed by the Mundra port authorities in substitution of the Applicant and/or
II. Order allowing the Defendant Vessel to sail under arrest to the Kandla Port and/or
III. Order directing the Mundra Port authorities to levy reasonable port anchorage charges with respect to the Defendant Vessel.
D. Costs of this application be provided for; and/or"
3. This Court by an order dated 29.12.2014 in Admiralty Suit No. 30 of 2014 directed the Port Authority and the Customs Authorities at Mundra to arrest the defendant vessel lying at Port of Mundra within the territorial waters of India in pursuant to which the defendant vessel has been arrested. The applicant - original defendant has, therefore, filed this application for vacating the order of arrest.
4. The factual matrix of the case are that:
4.1. By a charter party on an amended NYPE 93 Form with additional clauses evidenced by a Fixture Recap dated 5th June 2008, the plaintiff chartered the vessel "Mineral Capeasis" to one Industrial Carriers Inc. (hereinafter referred to as 'ICI') for a period of 12 to 13 months. The said vessel was duly delivered into the service of ICI on 15.08.2008. In pursuant to Clause 11(a) hire of USD 183,000 per day was payable by ICI to the plaintiff every 15 days in advance. ICI paid three installments of hire but failed to pay 4th installment of hire which became due on 17th August 2008 amounting to USD 26,42,556.62. On 30th September 2008, the plaintiff gave notice to ICI to make the outstanding payment. However, ICI did not make such payment to the plaintiff. The plaintiff, therefore, invoked the London arbitration clause of the charter party on 7th October 2008 and referred all the disputes and differences arising out of the said charter party to arbitration in London and appointed arbitrator and thereby called upon ICI to appoint their arbitrator which they failed to appoint. The dispute referred to arbitration by the plaintiff was for the following claims:
"(a) for unpaid hire in the sum of USD 37,15,482.18 and
(b) for the damages in the sum of USD 3,78,59,502 together with interest and costs."
4.2. The arbitrator made and published the award on 29th October 2009 by which ICI was ordered to pay a sum of USD 3,85,28,759.18 to the plaintiff with interest and costs. It is the case of the plaintiff that ICI has not challenged the award before the High Court at London. As per the case of the plaintiff, ICI is liable under the judgment and decree of High Court of Justice, Queen's Bench Division, Commercial Court, London to pay an amount of USD 4,70,92,790.74 to the plaintiff along with GBP 4,750 towards the arbitrator's fees.
4.3. It is the case of the plaintiff that registered owner of the defendant vessel, Freight Bulk Pvt. Ltd., Singapore (hereinafter referred to as 'Freight Bulk') is incorporated under the laws of Singapore. The plaintiff has stated in detailed in para 12 to 25 in the plaint whereby the plaintiff claimed against Freight Bulk, Vista, Haichi and Viktor Baranskyi, which are alter egos/successors in interest and/or fraudulent transferees with respect to ICI.
4.4. On 22.11.2013, one Flame S.A. Moved the District Court for the Eastern District of Virginia, Norfolk Division, U.S.A., to obtain a writ of judicial attachment for the vessel "M.V. Cape Viewer", which was also owned
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