Saturday, December 1, 2007

ARREST OF SHIPS FOR ENFORCING MARITIME CLAIMS
V.M. Syam Kumar BAL, LL.M. (Maritime Law)
[Faculty Member for Maritime law, National University for Advanced Legal Studies, Cochin]

Arrest of merchant vessels calling at Cochin by the High Court of Kerala has increased in recent times. Though the same ought to be a matter of concern for the entire shipping community at Cochin, it has not received the attention it deserves.
The spurt in the number of arrests has revealed the vulnerability of the vessels calling at the Cochin port. At a time when the shipping prospects of Cochin are brightening and vessels including mother ships and large cruise liners are calling at Cochin almost on a daily basis, it is in the interest of the shipping community, especially the Liners and their agents acting from Cochin, that the law pertaining to the arrest of sea going vessels is stream lined and updated to meet the needs of the time.
Arrest and detention of a foreign vessel towards enforcing a maritime claim is a potent weapon in the hands of a person which ensures that his lawful claim is protected when the claim is ultimately decided in his favor by a Court of law. But in the hands unscrupulous persons the same can be used as a means to pressurize the vessel and its owners to heed to the illegal and unjustified demands raised by the claimant. The right of a person to seek arrest of a vessel has to be clearly circumscribed and demarcated so as to ensure that the said right is never misused. Unfortunately the law relating ship arrests as it now exists, is devoid of safe guards to prevent an unscrupulous or malicious arrest.
The lack of clarity in law regarding arrest has even lead to situations where the Court arrests vessels lying in Ports as far off as Mumbai in purported claims that have nothing to do with Cochin or Kerala and even where the concerned vessel has never even called at Cochin Port. Cochin has thus become a convenient forum for raising frivolous maritime claims seeking arrest of vessels and for compelling ship owners to satisfy the illegal demands which in the long run does not augur well for the shipping community here.
All this is because there exists no comprehensive code for shipping laws laying down the legal norms both substantive and procedural, governing different aspects of admiralty. The law that presently governs the power to arrest sea going vessels in India can be traced to the Colonial Courts of Admiralty Act, 1891 which conferred Admiralty Jurisdiction including the power to arrest and detain a vessel, on the Chartered High Courts of erstwhile British India. After independence like in many other walks of life admiralty law too failed to keep pace with the changing times. This legislative lacunae was sought to be plugged to a certain extent by Justice Kochu Thommen, Supreme Court of India in the celebrated decision of mv Elizabeth by holding inter alia that all High Courts in India being superior courts of record possess inherent admiralty jurisdiction. By virtue of the said decision, the High Court of Kerala too possess admiralty jurisdiction over vessels situated within its territorial limits. Thus any vessel within the territorial waters of Kerala and Lakshadweep falls within the admiralty jurisdiction of the High Court of Kerala and can be arrested or detained pursuant to a maritime claim.
The substantive law thus having been taken care of by the Supreme Court, now the procedural vacuum comes to the fore. Chartered High Courts like Mumbai, Calcutta and Chennai possess original civil jurisdiction and maritime claims along with petitions seeking arrest of the vessel are filed before the said High Courts as Civil Suits by remitting the mandatory court fee which would depend on the suit amount. The same acts as a check on frivolous litigations since by and large only genuine claimants would choose to deposit court fee and initiate a proceeding against a vessel and seek its arrest. Any frivolous arrest would be visited with exemplary damages. These High Courts have also evolved detailed Admiralty Rules to deal with the procedural aspects of cases involving vessels.
The situation as it exists in Kerala is different in so far as the High court of Kerala does not exercise original civil jurisdiction in admiralty matters. Though in the light of the decision in mv Elizabeth High Courts in certain other states similarly placed as the High Court of Kerala have got over the said hurdle by evolving Rules governing admiralty practice, no such rule has been evolved by the Kerala High Court. Hence an action seeking arrest of a vessel is filed before the High Court of Kerala as a Writ Petition under Article 226 of the Constitution seeking a direction to the Port authorities to detain the vessel relying on Sec. 443 of the Merchant Shipping Act, 1956. The inherent defect of the said exercise which relegates Cochin as a favorite destination through forum shopping is that an arrest motion can be filed here with out depositing a farthing inspite of the fact that the claim raised against the impugned vessel would run to any fanciful amount at times to crores of Rupees. As the Court is not equipped to delve into questions of fact while exercising its jurisdiction under Article 226, the complicated factual matters that are invariably involved in all maritime claims cannot be looked in to by the High Court. Thus all that the Court does is to issue an arrest mostly ex parte and direct that the vessel be detained unless the claim amount in full is not deposited or an equivalent bank guarantee is provided for the said amount. Apprehensive of disrupting schedules, the vessel chooses to provide the bank guarantee than risk a prolonged arrest and detention. Once the Bank Guarantee is furnished, the matter is relegated to the appropriate civil court where a long drawn civil battle awaits the vessel and its owners for the entire period of which the Bank guarantee has to be kept alive. Banks insist on heavy interest for keeping the bank guarantee live for inordinate long period and this acts as an economic duress on the vessel owner to settle the matter at the earliest at terms favourable to the claimant.
The civil law right to file a general caveat which is available to the ship owner to preempt the arrest motion and to be informed of the same before an actual arrest order is issued, which is available to him before the High Courts like Mumbai is not available to him in Cochin, based on the reasoning that no caveat would lie in a writ proceeding. Though the right to file a caveat as envisaged in the Civil Procedure Code does exist and can be availed, many a time, the vessel or its owners would not be in a position to know before hand the name, address and other details of the person or entity that might move for an arrest. It is to take care of such eventualities that in High Courts like Mumbai, filing of a general caveat is permitted which is filed by the vessel or its owners against the world at large and before any motion for arrest is issued, notice would be given to the vessel or to its representative. Thus surprise arrests which are a bane in Cochin and damaging to its interest could be avoided.
Early initiatives are to be taken by the shipping community of Cochin towards altering the above scenario and towards evolving legal norms that would plug the present loopholes of law. If the proposed development activities in the Cochin Port and the infrastructural additions in the anvil are to achieve its desired ends, appropriate changes have to be made to the legal norms governing admiralty matters too.Law may be only one among the many platforms from which the eternal battle for social and economic progress of the community has to be fought. But we ought not forget that it is too important a platform to be ignored in the developmental process.
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4 comments:

Hathi said...

The isn't a single ship arrest from Cochin High Court. Kindly update or do your homework before publishing any article, ships are restrained by way of writ petition and not under admiralty jurisdiction.
Advisable not to tom tom some non-sense

V.M.SYAM KUMAR said...

Critical views on matters posted in this blog are always welcome. But the same ought to be fair and constructive. The tenor and the language used by Mr. Hathi in his comment, reveals that the same is only intended to ridicule and derogate the author rather than to open up a platform for intellectual discussion. Notwithstanding the same, I thank Mr. Hathi for the time taken to read through my article and I refrain from lowering myself to his level by replying in a similar manner.

More importantly, as regards the question of arrest of vessels by the High Court of Kerala is concerned, the said Court has been repeatedly arresting vessels invoking its inherent admiralty jurisdiction and this has been going on at least for the last 12 years since I have been practicing Admiralty law before the said court. Arrests motions are moved not as Writ Petitions as erroneously stated by Mr. Hathi but as Special Jurisdiction Cases (Sp.J.C.).

Yam said...

Sir, what is the effect on the nationality of a ship if its stolen? Does it amount to a lapse of the genuine link?

Jeevan Neviah said...

Thank you for sharing the post. Maritime Lawyer