IMPORTANT POINT
The admiralty jurisdiction of the High Court can be exercised for arrest of a ship for any maritime claim defined under clause (1) of Article 1 of the International Convention of Arrest of Ships (Geneva) 1999 and the ship can be arrested for any maritime claim as defined under the said Convention and further that there is no restriction or limitation on application of the Convention that the same would be subject to and could be applied only for enforcement of a contract involving public law character.

Akil Abdul Hamid Kureshi, J.

1. This reference to the larger Bench arises out of an order dated 27.7.2016 passed by the Division Bench of this Court in OJ Appeal No. 52/2015 and connected proceedings.

2. Brief history to the reference is as follows. One Vital Ventures Ltd., the appellant herein, had filed Admiralty Suit before the High Court praying inter-alia for a direction to defendant No. 2 to pay to the plaintiff a sum of 33,09,000 USD with interest. The plaintiff had also prayed for arrest of the ship for satisfaction of the plaintiffs claim. The plaintiff is engaged in the business of shipping and also in purchasing ships for the purpose of recycling or breaking. Defendant No. 1 is a foreign seagoing vessel flying the flag of Liberia. Defendant No. 2 is a company incorporated under the laws of Turkey. According to the plaintiff, defendant No. 2 had purchased the vessel from the plaintiff for an agreed sum of 75,00,000 USD. The defendant No. 2 had paid only a part of such sale consideration. Under various agreements, the plaintiff handed over the possession of the ship to defendant No. 2 on a promise of deferred payment of the remaining amount.

3. In the said suit the defendants raised a preliminary objection that the dispute raised by the plaintiff is purely in connection with the commercial transaction for the sale of vessel. The contract does not involve any public law character and, therefore, the claim of the plaintiff cannot be termed as a maritime claim. The suit was therefore, not maintainable. In this context heavy reliance was placed on the decision of the Division Bench of this Court in case of Croft Sales and Distribution Ltd. v. M.V. Bansil reported in 2011 GLHEL_HC 224598. Learned Single Judge by his judgment dated 2.11.2015 held that the Admiralty Suit was not maintainable.

4. The said judgment of the learned Single Judge was challenged by the plaintiff before the Division Bench, where also the defendants relied heavily on the decision of Croft Sales (supra). The Court was however, not in agreement with the view taken in case of Croft Sales (supra) and, therefore, by the above-noted order dated 27.7.2016 referred the following two questions to the larger Bench:

"(i) Whether the ship can be arrested for any "Maritime Claim", as defined under Article 1(1)(v) of the International Convention of Arrest of Ships (Geneva) 1999?

(ii) Whether application of 1999 Convention would be subject to and it should be applied only for enforcement of a contract involving public law character?"

5. We have heard learned counsel for both the sides who have referred to large number of decisions to which reference would be made at appropriate stages.

6. Learned counsel Shri S.N. Soparkar for the appellant plaintiff principally contended that the decision of this Court in case of Croft Sales (supra) does not lay down the correct position in law. The reliance of the Division Bench on a stray reference in the decision of the Supreme Court in case of Liverpool & London S.P. & I. Association Ltd. v. M.V. Sea Success I and another reported in (2004) 9 SCC 512, is misplaced. Neither in law nor in facts, in case of Liverpool (supra), such restricted meaning of the maritime claim was advocated. The view adopted by the High Court in case of Croft Sales (supra), would virtually destroy the admiralty jurisdiction of the High Court. This was neither the meaning nor the intention of the Supreme Court in case of Liverpool (supra). In fact, by the said judgment, the Supreme Court desired to expand the admiralty jurisdiction and did not in any manner intend to restrict or withal down the scope laid down by the Supreme Court in case of M.V. Elisabeth and others v. Harwan Investment and Trading Pvt. Ltd. Hanoekar House Swatontapeth, Vasco-De-Gama, Goa reported in 1993 Supp (2) SCC 433. Counsel submitted that what is binding in a judgment is its ratio and no sentence, remark or discussion can be picked out of context and be seen as the ratio of th