IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BIREN VAISHNAV, DEVAN M. DESAI, JJ.
Hind Offshore Private Limited and Another - Appellants
Versus
Praxis Energy Agents DMCC - Respondent
O.J. Appeal No. 5 of 2023, Admiralty Suit No. 26 of 2017
Decided On : 04-03-2025
(A) Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 - Section 9 - Ex-parte order of arrest - The appellant, owner of the defendant vessel, contended that the plaintiff had no maritime lien as the vessel was chartered to another party, thus not liable for bunker oil supplied - The learned Single Judge dismissed the application to vacate the arrest order, finding a prima facie case for the plaintiff. (Paras 4, 5, 8, 12)
(B) Maritime lien - The court reiterated that a maritime lien does not arise for bunker supplies unless there is a direct contractual relationship between the supplier and the vessel owner. (Paras 3.4, 5.1)
(C) Prima facie case - The court held that the plaintiff established a prima facie case for the arrest based on the contractual obligations outlined in the purchase order and invoices. (Paras 5, 8)
Facts of the case:
The appellant, a company, sought to vacate an ex-parte arrest order of its vessel, arguing that it had no liability for bunker oil supplied to the vessel as it was chartered to another company.
Findings of Court:
The learned Single Judge found that the plaintiff had a prima facie case and dismissed the application to vacate the arrest.
Issues: The main issues were whether the plaintiff had a maritime lien against the vessel and whether the appellant was liable for the bunker supply.
Ratio Decidendi: The court ruled that the existence of a maritime lien depends on the contractual relationship between the parties, and the plaintiff had established a prima facie case for the arrest of the vessel.
Result: Appeal dismissed.
ORDER :
(BIREN VAISHNAV, J.)
1. This OJ Appeal has been filed by the original defendant in Admiralty Suit No. 26 of 2017. The appellant had filed an application before the learned Single Judge to vacate and/or set aside the ex-parte order of arrest dated 07.10.2017 in the present suit. The learned Single Judge by an IA judgement dated 14.11.2022 dismissed the application.
2. Facts in a nutshell have been set out by the learned Single Judge which read as under:
“3. The facts in nutshell are that the applicant is the registered owner of the defendant-vessel which is an Indian Flagged Vessel. The applicant is a company incorporated under the laws of India and has entered appearance before this Court under protest for the limited purpose of vacating the order of arrest dated 07.10.2017 passed against the defendant-vessel.
4. It is the case of the applicant that the plaintiff has no maritime lien against the defendant-Vessel as per the provision of section 9 of the Admiralty (Jurisdiction And Settlement Of Maritime Claims) Act, 2017 [for short ‘the Admiralty Act’] as the applicant has already given the vessel on time charter basis to one Asiana Offshore PTE Limited on 01.02.2017, who, in turn, had further given the defendant-vessel on time charter basis on 02.02.2017 to M/s. Unison Engineering and Construction Pvt. Ltd. [‘Unison’ for short], therefore, the applicant-the owner of the defendant vessel cannot be said to be liable for payment of bunker oil supplied by the plaintiff to the vessel at the request of Unison.
5. It is also the case of the applicant that there is correspondence between the Unison and lawyer of the plaintiff to the effect that liability of the payment of bunker oil is that of Unison and not of the applicant or the defendant-vessel. It is further averred in the application that the plaintiff was aware that it has remedy against the Unison- Time charterer and not the applicant-Hind Offshore Pvt. Ltd. or the defendant-Vessel and therefore, the Admiralty Suit is required to be dismissed and the security amount put up by the applicant to get release of the vessel is required to be returned to the applicant.”
3. Mr. Amitava Majumdar, learned advocate assisted by Mr. Harsh Parekh, learned advocate for the appellant made the following submissions:
3.1 That the order of the learned Single Judge rejecting the application is without appreciating the fact that the respondent – original plaintiff had not made out a prima facie case for an exparte order of arrest of defendant no. 1 vessel. He would submit that the suit and the application for arrest was moved by the plaintiff by stating incorrect facts and/ or without disclosing material facts. He would submit that in fact, though it was the case of the plaintiff that the vessel was being beached at the Alang port and would then be broken, in fact the vessel was merely plying as a tug. Based on this misleading statement that the vessel was being beached for shipbreaking the plaintiff obtained the order of arrest.
3.2 That the learned Single Judge failed to appreciate that there was no maritime claim against the appellant. That apart from not having maritime claim, the plaintiff had no maritime lien against the defendant vessel. He would further submit that there is no privity of contract between the plaintiff and the appellant Hind Offshore Private Ltd. as the registered owner of the defendant no. 1 vessel or that the plaintiff is entitled to an order of arrest of the vessel for the supply of necessaries. The plaintiff failed to establish that there was personal liability on the part of the appellant as the owner of the vessel. Relying on the documents and correspondences annexed with the plaint, which Mr. Majumdar has referred to and relied upon, he would submit that the bunkers were not supplied at the instance of the appellant but at the instance of Unison/Time Charterer. For this, he would rely upon the invoices indicating that the vessel was chartered by the appellant to Asian
A maritime lien for bunker supplies requires a direct contractual relationship between the supplier and the vessel owner; the absence of such a relationship negates liability.
A maritime claim can be pursued in rem against a vessel owned by a time charterer, provided the owner is liable for the claim, regardless of applicable insolvency laws.
Maritime liens can attach to a ship despite ownership changes, but claimants must prove supply and contractual relationships clearly.
The supply of bunkers constitutes a maritime claim enforceable in rem under the Admiralty Act, justifying the arrest of the vessel for non-payment.
A breach of contract in maritime agreements may support claims for damages and penalties under the Admiralty Act 2017, classifying such disputes as maritime claims.
The court affirmed that a breach of contract under the Admiralty Act justifies a maritime claim, requiring the defendant to furnish security for damages due to failure in contractual obligations.
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