Wednesday, December 10, 2014

Law and Jurisdiction clause in a Bill of lading – will exclude the jurisdiction of Permanent Lok Adalat constituted under Legal Services Authorities Act, 1987.

https://www.scribd.com/doc/249720002/maersk-adalat-order-op-239-pdf


The Permanent Lok Adalat at Ernakulam has in its Order dtd.25.11.2014 held that the Law and Jurisdiction clause in a bill of lading which confers jurisdiction on the English High Court of Justice in London will exclude the jurisdiction of the Permanent Lok Adalat to entertain the matter.

The Judgment of the Supreme Court of India in British India Steam Navigation V. Shanmughavilas Cashew Industries and others  reported in 1990 SCC (3) 481 was followed by the Permanent Lok Adalat in its Order.

The Order was passed dismissing a petition filed by the consignee claiming return of amounts collected by the carrier at the discharge port towards demurrages and detention charges. 

The Order is significant in view of the wide powers conferred on Permanent Lok Adalats to adjudicate disputes in case, parties are not able to arrive at a mediated settlement. The affirmation by the Supreme Court and various High Courts  of the said power of the Permanent Lok Adalats has lead to its frequent invocation against shipping lines. Contentions rasied by shipping lines that they are not a "public utility service" falling within Section 22A (b) (i) of the Legal Services Authorities Act, 1987 and that disputes arising out of contracts for Carriage of Goods by Sea do not fall within transport service for carriage of goods by water as defined in the above section of the Legal Services Authorities Act, have not met with success so far. The contention that the subject matter of the Complaint in a carriage of goods by sea dispute based on a bill of lading involves complex questions of Contract, which require elaborate evidence and hence is not fit for a summary trial and disposal in a Permanent Lok Adalat has also not met with approval. That the subject matter of the such Complaints involve complex questions of Contract, which require elaborate evidence and hence is not fit for a summary trial and disposal is a reason to exclude the jurisdiction of permanent lok adalats in such matters. That substantial court fee which would otherwise have been payable under the general civil law in a civil suit need not be paid while filing a complaint before the Adalat is an attraction to by pass civil courts.

It is in the above legal scenario that the Order dtd.25.11.2014 of the Permanent Lok Adalat, Ernakulam, dismissing the petition based on the 'Law and Jurisdiction' clause in the bill of lading, assumes relevance.

(The complete Order can be accessed from the link above.)



Tuesday, December 9, 2014

Marine Insurance- Indian Court holds China Pacific Property Insurance Co. Ltd. liable under the insurance policy.

http://ecourts.gov.in/services/cases/display_pdf.php?filename=/orders/204701002622009_2.pdf&caseno=OS/100262/2009
http://ecourts.gov.in/services/cases/display_pdf.php?filename=/orders/204701000542010_1.pdf&caseno=OS/100054/2010
http://ecourts.gov.in/services/cases/display_pdf.php?filename=/orders/204701000452010_1.pdf&caseno=OS/100045/2010

The Subordinate Judge’s Court in Cochin, Kerala State has vide judgment and decree dtd. 28.10.2014 held that the Chinese Insurance company, China Pacific Property Insurance Co. Ltd. is bound to honour the insurance policy issued by them with respect to a cargo transported from Qingdao Port in China to Cochin Port. The Court vide the said Judgment also directed the China Pacific Property Insurance Co. Ltd. to pay the amounts due with interest at the rate of 18% and also held that the consignee in Cochin is entitled to get the costs of the litigation from the China Pacific Property Insurance Co. Ltd.
The Court in its Judgment held that by virtue of the relevant clauses in the insurance policy which covers the transportation from warehouse to ware house, any damage caused to the cargo while transportation from the ware house of the seller in China to the buyer in India is liable to be compensated by China Pacific Property Insurance Co. Ltd.
Few cases had been filed in the Subordinate Judge’s Court, Cochin arising out of marine insurance policies issued by the China Pacific Property Insurance Co. Ltd. alleging failure to honour the policy. After a detailed trial and appreciation of evidence the Subordinate Judge’s Court have passed judgment and decrees against China Pacific Property Insurance Co. Ltd directing them to pay to the plaintiff, amounts due under the policy along with interest and cost of the litigation.
The plaintiff in the said cases had alleged that notwithstanding the existence of a valid claim under the policy, China Pacific Property Insurance Co. Ltd had chosen not to honour the same. Though the insurance policy issued by the China Pacific Property Insurance Co. Ltd mentioned the name of an agent to be contacted in India in case of any claim, the said company in India contended before the Court that the they were not the agents of the China Pacific Property Insurance Co. Ltd.

Notwithstanding repeated issuance of notice from the Court calling on them to appear and defend the plaint, the China Pacific Property Insurance Co. Ltd remained absent and was set ex parte.
The judgment assumes relevance in view of the reported increase in instances where valid claims made by Indian consignees importing goods from China covered by insurance policies are either wrongfully declined by Insurance Company themselves or are left at the mercy of agents in India. 
( Judgments  can be accessed from the links above)


Saturday, September 13, 2014

THE ADMIRALTY (JURISDICTION AND SETTLEMENT OF MARITIME CLAIMS) BILL, 2012 – A CRITIQUE.


THE ADMIRALTY (JURISDICTION AND SETTLEMENT OF MARITIME CLAIMS) BILL, 2012 – A CRITIQUE.

[By V.M.Syam Kumar LL.M.] 


The Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill, 2012 has been placed in public domain inviting comments from concerned stake holders. The Bill after passing through due legislative process could become the law applicable across India.  It is a much awaited statute having tremendous practical relevance to the maritime community and is hoped to stream line, confine and structure the Admiralty Jurisdiction at present haphazardly exercised by the various High Courts in Indian States. Let us examine it closely.


Comments on Chapter I of the Bill
Definition of Charge
Sec. 2 (1) (c) of the Bill defines ‘Charge’ as any due with reference to ‘port or pilotage’ but does not include any charge in respect to light dues, light houses, buoys or beacons. Thus Charge has been defined to take in port or pilotage dues alone. The term ‘Charge’ when used in relation to Admiralty jurisdiction and maritime claims is a term that has wider ramifications. The Bill admits the same in Sec. 5 (2) (c) wherein it is stated that any claim in respect of a registered mortgage or of ‘charge on a vessel’ (emphasis supplied) is a maritime claim. [See also Sec. 7 (1) (ii)]. In view of the same, the blanket definition of charge in Sec. 2 (1) (c) limiting it as port or pilotage dues could create confusion and issues of interpretation when a court proceeds to consider a ‘maritime claim’ arising from a ‘charge’ over a vessel. Definition of charge in Sec. 2 (1) (c) ought not whittle down the import of the term ‘charge’ used in Sec. 5 (2) (c). A clarification to this effect ought to be incorporated in the Bill. 
Definition of Goods
Sec. 2 (1) (e) of the Bill defines Goods in terms of property supplied by consignor (emphasis supplied). This definition could have an inter play with Sec. 5 (1) (h) which inter alia states that maritime claim includes any claim arising out of any agreement relating to the carriage of goods on board the vessel (emphasis supplied).  The agreement referred to therein could mean any form of contract of affreightment including Bills of lading or charter parties. The term supplied by consignor used in Sec. 2 (1) (e) of the Bill to qualify the term goods is unnecessary and capable of creating myriads of legal issues, especially if it is an action based on a bill of lading which is a document capable of passing title on to the holder. Hence it is prudent to leave the definition of goods simple by deleting the terms supplied by consignor.
Definition of High Court
Sec. 2 (1) (f) of the Bill defines High Court. Eight high courts from among the various High Courts in India have been chosen to be conferred with Admiralty Jurisdiction. Though very practical and purposive, the said selection contradicts the dictum laid by the Supreme Court of India in MV ELIZABETH that Admiralty Jurisdiction is a facet of the inherent jurisdiction that exists in all High Courts in India by virtue of their being high courts of record. The decision to overlook the dictum of the Hon’ble Supreme Court clothing all High Courts of India with admiralty Jurisdiction would require a better legal reasoning than the simple practical explanation that the eight chosen ones are the only littoral High Courts in India, thereby meaning that they are situated in states which have a coast line and sea ports. Admiralty jurisdiction should extend to all navigable waters and hence the question of confining it to states with coast line lacks reasonableness.  
Definition of Port
Sec. 2 (1) (c) of the Bill defines Port as having the meaning assigned to it in the Indian Port Act, 1908. It is not clear as why the more broader and apt definition of Port as defined in the Major Port Trusts Act, 1963 was not adopted. The definition of Port in Sec. 2 (q) of the Major Port Trusts Act, 1963 reads as follows:  "port" means any major port to which this Act applies within such limits as may, from time to time, be defined by the Central Government for the purposes of this Act by notification in the Official Gazette, and, until a notification is so issued, within such limits as may have been defined by the Central Government under the provisions of the Indian Ports Act” The said definition appears to be inclusive and apt as it speaks of the Indian Ports Act definition also. The definition of Port Approaches in the Major Port Trusts Act, 1963 ought to have engaged the attention of the drafters.
Definition of Vessel.
‘Vessel’ has been defined (in sec. 2 (1) (j) of the Bill) to include, ‘any ship, boat, sailing vessel or other description of vessel used in navigation’. This definition which has apparently been borrowed from elsewhere does not suit the contemporary realities in India.
It marks a departure from the Draft Admiralty Act, 1990 and the Admiralty Bill of 2005 by substituting the term ‘Vessel’, instead of ‘Ship’ which had been used therein.
Admiralty jurisdiction has always been concerned with sea going ships was never intended to be exercised or need be exercised in relation to a ‘boat’. Boat has been defined in various statutes which are mostly creations of State legislatures. Exercising Admiralty jurisdiction over boats would create myriads of problems both administrative and judicial as boats are covered by separate statutes in India. Further bringing in ‘sailing vessels’ as a subject matter over which admiralty jurisdiction will be exercised is also surprising. A ‘sailing vessel’ is a vessel which has a sail and thus uses wind as its means of propulsion. Such vessels have become redundant with the inception of vessels fitted with mechanical means of propulsion. The Merchant Shipping Act, 1958 in Sec. 3 (45) specifically exempts sailing vessels from the definition of ‘Ship’. Such exclusion existed in the Admiralty Bill of 2005. Hence the bringing in of ‘sailing vessel’ into the Admiralty realm is un-necessary. The definition, further proceeds to include ‘any vessel used in navigation’, within the description of the term ‘Vessel’ and this could take in a yacht, catamaran, dhow, country crafts and any other water craft used for navigation. The term ‘navigation’ has not been defined so there is nothing to suggest that it means navigation through the sea. This open ended definition of ‘Vessel’ could lead to situations where Admiralty Jurisdiction is invoked in areas where it was never intended to be invoked, like with respect to myriad of disputes involving boats and fishing vessels. It is desirable to define ‘Vessel’ with precision rather than nebulously. The definition of ‘vessel’ should be one limiting it to sea going ships fitted with mechanical means of propulsion.
It is ideal to use the term ‘Ship’ instead of ‘Vessel’ not only because its apt and proper but also since most of the shipping statutes like Merchant Shipping Act, 1958 uses the term ‘Ship’ and not ‘Vessel’.
Further, there exists a strong case for further confining admiralty jurisdiction on to one category of such sea going ships viz., to foreign flag ships alone and for exempting ships registered in India from such arrests. I propose to deal with this larger question while discussing Sec. 6 of the Bill which makes specific reference to the same.
Explanation to 2 (1) (j): Exemption of ‘Vessels’ brought in for breaking.
The Explanation appended to 2 (1) (j) regarding vessels that are brought in for breaking and demolition ceasing to be ‘vessels’ thus taking them out of purview of admiralty jurisdiction (except with respect to some specified claims), might bring solace to the ship breaking industry, at a time when Indian Supreme Court is clamping down on heavily on the highly polluting ship breaking processes and yards in India through decisions like the ones involving vessels Exxon Waldez, Clemenceau etc. But for a person who has a genuine maritime claim or maritime lien against a vessel which ought to be invoked before she is broken down, the criterion fixed in the Bill will be detrimental. Hence it is doubtful whether the provision strikes a fair balance, reasonably expected of a statute.
It has been found in practise that Vessels which are subject matter of dispute or over which maritime liens still attaches are brought to the ship breaking yards in India, without the knowledge of the claimant or one of the disputing parties. For instance a foreign flag vessel was berthed for breaking in the ship breaking yard situated along Kerala coast run by a Government of Kerala Undertaking (ship breaking operations of which has recently been clamped down as being highly polluting and illegally operated) even without the contesting owner of the vessel being aware of the same. By the time the contesting owner obtained an Arrest Order invoking Admiralty Jurisdiction of the Kerala High Court, steps towards breaking had already been initiated surreptitiously in connivance with the yard. Such instances and the privilege afforded by law to a ‘maritime lien’ require that the Explanation appended to the definition of Vessel to be closely scrutinised.
As per the Explanation, except for employment claims, the vessel will be devoid of its character as a ‘Vessel’, merely upon happening of three requirements/conditions enumerated viz., (1) permission for beaching for the purpose of demolition being obtained from the ‘relevant authority’, (2) upon bill of entry for home consumption for the purpose of breaking ‘been filed’ and (3) upon duty as assessed being paid to the Customs.
The above stated requirements/conditions as stated in the Bill lacks clarity and could be used by unscrupulous interests to bypass and deny genuine maritime liens and claims. Upon happening of any said requirements/conditions (which can very easily and unilaterally be complied with) the Admiralty Jurisdiction of the High Court over the Vessel is taken away.  This effectively prevents genuine claimants and persons who have maritime lien against the vessel from realising and enforcing their maritime claim/ maritime lien against a vessel before she is broken down as they have no control over the performance of the above three conditions.
Admiralty Jurisdiction, which the Supreme Court of India termed as an inherent original jurisdiction possessed only by higher courts of record ought not be easily declined or taken away by such an explanation especially when it comes to the enforcement of maritime liens.
Wreck and Admiralty jurisdiction
Bill does not define wreck though there is reference to it in Sec. 5 (2) (i). Wrecks abound along the Indian coast. Law relating to Wrecks in India is archaic and requires updating in lines with the Nairobi International Convention on the Removal of Wrecks, 2007. It is understood that step in the said direction are presently underway. There has to be clarity regarding the status of wreck and its subjection to the Admiralty Jurisdiction since maritime claims could abound in relation to wrecks. The Bill in its present form does not take care of this crucial aspect.
Comments on Chapter II of the Bill.
Sec.3 (1) of the Bill deals with the crucial aspect of jurisdiction of admiralty courts.
The relevant ingredients thereof are as follows:
 (1) Jurisdiction envisaged is only civil jurisdiction.
(2) Such jurisdiction is vested only on the High Courts.
(3) It is exercisable over the waters up to and including the territorial waters
(4) The High Court’s shall exercise it within their respective jurisdictional limits.
(5) It shall be exercised in accordance with the provisions of the Chapter II.
The area of operation stated therein viz., over the waters up to and including the territorial waters and the confining of the jurisdiction of each High Court to such areas falling within its on territorial limits assumes importance.
Inland waters which found mention in earlier drafts have been taken away. But the present definition since it extends up to the territorial waters, it could be said to include inland waters, internal waters and territorial sea up to12 nautical miles as defined in the Act of 1976 pertaining to Maritime Zones of India. However, what is the relevance of the words “over waters” used therein? Does it mean the jurisdiction is exercisable only over waters? What about a claim arising with respect to a vessel that has been dry docked for repairs? Does the deletion of the words “over waters” make any difference in effect of the provision? Apparently it does not.
Further is the aspect of limiting the jurisdiction of the High Courts to their respective jurisdictional limits. This is a direct concern for the chartered High Courts of Bombay, Calcutta and Madras which have been hitherto exercising a pan India admiralty jurisdictions as laid down in the Charter and the colonial courts of Admiralty Act, 1891. Even other High Courts like High Court of Kerala which started exercising admiralty jurisdiction subsequent to Elizabeth have been exercising a pan India admiralty jurisdiction. What effect would Sec. 2 (1) (f) and Sec. 3 (1) of the Bill have on the exercise of admiralty jurisdiction by the said courts? Have the drafters of the Bill taken note of the proceedings and report of the Standing Committee of the Parliament on Admiralty Bill 2005 which suggested a pan India jurisdiction for all admiralty courts? The said observations still hold good and there is strong legal reasoning for providing pan Indian jurisdiction for admiralty courts especially since admiralty jurisdiction is universal and is not concerned with the question of nexus between the cause of action and the forum. 
Deviations in Sec 5 from the 1981 UK Act.
Sec. 5 that deals with Admiralty jurisdiction is the most relevant provision in the Bill. Secs. 5 (1) & (2) thereof are by and large in line with the provisions contained in the erstwhile Supreme Court Act, 1981 of UK however, with some startling deviations.
Since the law has to suit the situations prevailing in India, and we need not by tied down by English statutes, changes if necessary in the said respect are to be welcomed. However, such changes should be brought in after considering their effect on other provisions in the bill and beyond. 
The deviations are apparently incorporated based on the suggestions made by the trade unions and other stake holders to the relevant provision of similar import contained in the Admiralty Bill, 2005. Though there is no need to retain the very same structure and provisions as exists in the 1981 UK Act, whenever deletions, additions, interpolations etc. are made, the same require some reasoning and justification. Some of the deviations appear to be unilateral and capable of great mischief, if permitted to remain in the Bill. It seen from the Proceedings and Report of the Standing Committee of the Parliament on the Admiralty Bill, 2005 that the suggestion of the Department of Shipping to verbatim follow the similar provisions of the UK Act was turned down as un- acceptable and directed re-consideration and revision. (see para 14.4.14 of the Proceedings and Report of the Standing Committee of the Parliament on the Admiralty Bill, 2005). However this is not a licence to pick and choose the changes to the provisions or mechanically carry out changes. To further complicate things, typos abound in this part of the Bill. In view of the above, there is a real need to read down Sec. 5 in its entirety.
Some deviations from the 1981 UK Act, which appear crucial, alone are examined here. 
Sec. 5 (1) (a) states that the court shall jurisdiction to hear any questions and claims “by or against vessel” mentioned in sub section (2). The highlighted words therein are of concern since they effectively limit the scope of admiralty jurisdiction exercised by the Court. Sec. 5 (1) (b) states that the court shall jurisdiction in relation to any of the proceedings mentioned in section 7. Other than these two, no other form of exercise of admiralty Jurisdiction is envisaged. This stifles the admiralty jurisdiction and limits its scope compared to what previously existed. Admiralty jurisdiction historically is a jurisdiction very wide in scope and much beyond the purview of the maritime claims as enumerated in the Bill. Hence at least to keep the wide sweep of Admiralty jurisdiction intact it is necessary to incorporate a clause to effect retention of Admiralty Jurisdiction hitherto vested in the High Court and any jurisdiction connected to ships which may in the future be assigned to the admiralty court. As regards the words by or against vessel” used in Sec. 5 (1) (a), the same is a surprising addition. Historically, an in rem action under Admiralty Jurisdiction is available not only by or against a vessel. It is available against both ship and cargo.  By virtue of that addition, the whole array of questions and claims borrowed from the Act of 1981 (UK) stands stifled and limited to “any questions and claims by or against vessel.”
Deviations generally are further noted in Sec. 5 (2) (b), (c), (e), (f), (f) (ii), (g), (h) (i), (j), (k), (l) (ii), (l) (iii), (m), (o) and (p).
Arrest of a ship would be an exceptional remedy and ought to be invoked sparingly and in extraordinary compelling circumstances. Otherwise freedom of navigation will be at peril. Looking at the deviations made, the bill appears to proceed on the opposite basis.
In Sec. 5 (2) (b) the word “operation” has been included. The term “employment” already present in the said provision makes inclusion of the word “Operation” unnecessary. Though some fine nuances and differences could be pointed out, the question is whether the additions of such word was in any manner necessary as regards the questions arising between co owners.
Sec. 5 (2) (c) of the Bill added the word “registered” before mortgage thus making it necessary that the jurisdiction under sec. 5 to hear any claim in respect of mortgage is qualified only to registered mortgages. Though under Merchant Shipping Act, 1958 speaks of registered mortgages, claims leading to an admiralty action could arise with respect to unregistered mortgages also. That unregistered mortgages could lead to uncertainty is not a reason sufficient to limit the scope of claim in respect of mortgage. Since admiralty jurisdiction envisages a detailed trial on such points, uncertainty, if any, will be duly clarified in the said process.
In Sec. 5 (2) (d) the words “during her stay or voyage” has been included to qualify any claim for damage caused to a vessel. The said words “during her stay or voyage” lacks clarity. Further the term “a vessel” means any vessel. So a claim against a vessel for the damage caused by her to another vessel falls within the ambit of this clause. To qualify it with the words “during her stay or voyage” only complicates the otherwise clear provision.
 In Sec. 5 (2) (e) the words “including civil liability for damage caused by pollution covered under the Merchant Shipping Act, 1958” has been included after the words “any claim for damage caused by a vessel”. This addition in the light of Part XB of the Merchant Shipping Act, 1958 which deals with Civil Liability for Pollution Damage will open up jurisdictional and other issues. For instance, Part XB envisages applicability extending up to Exclusive Economic Zone whereas the Bill envisages admiralty jurisdiction only up to and within Territorial waters.  

The change effected in 5 (2) (m) appears totally unnecessary in view of the specific provisions including Sec. 445 in the Merchant Shipping Act, 1958.  This has to be viewed in the light of the deletion of Sec. 20 (7) of the Act of 1981 (UK) and especially its proviso which was one of very wide import. The change brought in by the above deletions overturns the relevant proposition (proviso to Sec. 20 (7)), that too for no valid reason whatsoever.
In Sec. 5 (4) (c) the insistence of ‘registered’ mortgages is unnecessary for the reason explained herein above while discussing Sec. 5 (2).
Sec. 6 and Arrest of Indian Flag vessels
Sec. 6 of the Bill provides for some procedural formalities before an admiralty arrest can be made of a vessel registered in India by an in rem action. The said formalities are apparently incorporated to protect Indian flag vessels from being arrested in rem.
Two clear working days notice as stipulated therein is not by itself going to afford any substantial protection to the owner of the Indian flag vessel.  The reasoning for providing only two clear working days in the Bill for the six clear days as had been stated in Sec. 6 (1) of the Admiralty Bill, 2005 is difficult to appreciate.  
Though the definition of ‘inland waters’ is seen deleted as redundant, the term inland waters is seen stated in Sec. 6 (2) of the Bill. Here again the pan India jurisdiction hitherto exercised by the Admiralty courts are seen taken away.
It has been consistently held by the High Courts in various cases that arrest of an Indian flag vessel is never envisaged under Admiralty Jurisdiction. The judicial reasoning found in the said judgments is sound and legally well founded. Moreover, there exists no practical reason as to why an Indian flag vessel has to be arrested in rem exercising admiralty jurisdiction.
The purpose of an admiralty arrest also has to be borne in mind while making discussing this aspect. The principal objective of arresting a vessel in rem is to ensure that sufficient security is obtained from the owner of the vessel or person interested in the same so that the claimant, if successful in his claim, has a corpus to proceed against and realise the fruits of the decree. In the case of a foreign vessel, since the vessel could be the only property available in India to the foreign owner, before she sails out of Indian jurisdiction (probably to never return), sufficient security has to be obtained. Such a scenario of imminency and lack of assets in India to proceed against does not arise in the case of an Indian ship.
Indian flag vessel is a vessel registered in India as envisaged under the Merchant Shipping Act, 1958. The said Act specifically provides in Sec 21 the qualifications for being an ‘Indian Ship’. A bare perusal of the said provisions will reveal that stringent requirements intended to ensure that the genuine link (read financial link) governing the commercial functions of the ship remains in India. This along with other stringent provisions regarding Registration of ships differentiates India from a flag of convenience country. Hence every claimant who has a maritime claim against an Indian ship has enough avenues to secure his claim, thus making arrest of the vessel un-necessary.
Further the civil remedies of attachment before Judgment under the Code of Civil Procedure, 1908 is equally available against an Indian owner and his assets including the relevant ship or sister ships. Scope for arresting an Indian Vessel would only lead to misuse of the arrest in unscrupulous hands. Arrests of Indian flag vessels will serve no purpose other than to cajole and coerce Indian ship owners to settle the claim.  Hence arrest of an Indian ship is totally irrelevant and unnecessary as laid down by the High Court Judgments. (See judgments of Kerala High Court in GENERAL ENGINEERING v. MV ARABIAN SEA and Calcutta High Court in PORTO MAINA MARITIME V. OWNERS MV GATI MAJESTIC For a contra view please see Judgment of the Bombay High Court reported in CROWN MARITIME CO. (I) LTD. VS BARGE SALINA II AND ORS.)
Need for excluding Government ships
As it stands now the Bill does not contain a provision excluding action in rem against Government and vessels owned by the Government. Recently two vessels owned by the President of India and plying between Lakshadweep Islands and the mainland were attempted to be arrested by a local shipping yard for a paltry sum alleged to be outstanding from the Company Managing the operations of the said vessels. Plying of the said vessels which are the crucial link between the Islands and the mainland were attempted to be stalled. Arrest motion was declined by the High Court of Kerala inter alia holding that admiralty jurisdiction was not attracted with respect to vessel owned by the President and the plaint was directed to be returned to the parties to be produced before the appropriate civil court. (See judgments of Kerala High Court in GENERAL ENGINEERING v. MV ARABIAN SEA)
The Admiralty norms in England and other common law countries contain specific provisions excepting crown vessels and government vessels. Vessels owned by the Government are properties of high public importance. There exists no need to obtain security from the Government by arresting a vessel owned by the Government as there exist no risk of the Government running away from a decree. Though internationally, some there is a trend to differentiate and categorise separately Government ships used for commercial purposes and other Government ships, in Indian context there is no scope for even such differentiation. It is hence desirable to have a ‘Saving’ clause in following line:
Nothing in this Act shall authorise proceedings in rem in respect of any claim against the Government, or the arrest, detention or sale of —
(a) any ship of which, the ownership or beneficial interest is vested in the Government either Union or State; or
(b) any cargo or other property belonging to the Government.




Sec. 21 and Repealing of earlier statutes

Repealing earlier statues, mechanically without providing an effective, if not better alternative, could lead to serious legal lacunae. Though repealing redundant statues cannot be found fault with, statutes for which adequate substitutes have not been provided in the Bill ought not to be repealed. The Bill shows some instances of mechanical repealing. Among the statutes that the Bill seeks to repeal are included, the Admiralty Offences (Colonial) Act, 1849. The said statute dating to the British Raj, defines admiralty offences and provides for trial for admiralty offences in colonies. It inter alia speaks of piracy on the sea and is incidentally the only statute in India which speaks of Piracy. The handiness of the said statute was evident in the trial of pirates involved in ALONDRA RAINBOW. There is no provision in the Bill akin to the provisions in the said statute. However, the said statute finds mention in the list of those to be repealed by the Bill. 

It would be imprudent to repeal a statute like the Admiralty Offences (Colonial) Act, 1849 without providing the legal system with an equal or better substitute to the same. Though SUA, 2002 does exist, the same falls within a different realm.

Admiralty jurisdiction historically is a jurisdiction very wide in scope and much beyond the purview of the maritime claims as enumerated in the Bill. The present Bill is bound to have a stifling effect on the wide admiralty jurisdiction hitherto exercised by the Courts in India. Hence at least to keep the wide sweep of Admiralty jurisdiction intact it is necessary to incorporate a clause to effect retention of Admiralty Jurisdiction hitherto vested in the High Court which could be as follows: “any other Admiralty jurisdiction which had immediately before the commencement of the Bill (Act) by virtue of the Admiralty Court Act, 1840, Admiralty Court Act, 1861, or the Colonial Courts of Admiralty Act, 1890 or the Colonial Courts of Admiralty (India) Act, (XVI of 1891 or otherwise.”

Conclusion

The Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill, 2012 proposes to deal will all facets of admiralty jurisdiction as exercisable by the High Courts in India. However it speaks of only the jurisdiction over ships to deal with enumerated maritime claims and the procedure to adopted in the said respect. Though the Bill aspires to be a complete code regarding Admiralty Jurisdiction in India, it falls short of the said objective.

 The exact scope and ambit of admiralty jurisdiction including its contours and four corners have never been clearly demarcated even in England. Since the Bill attempts to lay down the admiralty jurisdiction in straight jacket and confine and structure the exercise of such jurisdiction, much more caution (even with regard to its title) ought to have been exhibited. The present structure of the Bill is thoroughly confusing, vague and cumbersome. Strangely, no cue appears to have been taken by the drafters from the earlier drafts on the same subject. The Law Commission of India had along with its Report annexed a draft Admiralty Act of 1990. Though it needs to be updated, the said draft was a good starting point for the Bill as the scheme of arrangement followed in the said draft appears to be more conducive and friendly than the scheme followed by the Bill of 2012. Even the simpler version followed by the Act of 1981 (UK) on the same subject is not seen taken note of.

The main drawn back of the Bill is that it haphazardly borrows from various similar statutes in other countries and puts them together without taking note of the felt necessities of the time and place where it is to operate. Secondly, it does not take note of the Judgments rendered on Admiralty Jurisdiction by the Hon’ble Supreme Court of India and various Indian High Courts subsequent to MV ELIZABETH case which clearly show the path that a statute ought to take and the concerns that it should address. Thirdly, it overlooks International Conventions and norms which have a direct bearing on the subject of Admiralty Jurisdiction and thus lacks an international overview, which a maritime statute of its nature cannot afford to ignore.

Admiralty is admitted to be an unfamiliar branch of jurisprudence even in England. The Indian Law commission has opined that the same is the situation in India. It is hence highly desirable that before throwing in concepts like in rem and in personam and maritime lien, general average, salvage, charter etc. into judicial arena and thus making parties and judges grapple with their true meaning, the statute should at least lay down the broad contours.

Among the many reasons stated (in the explanatory note appended to the Bill) for the creation of such an enactment is the observation of the Hon’ble Supreme Court of India in MV ELIZABETH v. Harwan Investments Pvt. Ltd. (AIR 1993 SC 1014) that the “unfortunate state of affairs” existing due to lack of legislative exercise in the arena of admiralty law shall be brought to an end at the earliest. If the Bill as it stands now proceeds to become a statute, the lamentation of the regarding the ‘unfortunate state of affairs’ would only get louder and desperate. 

The Bill as it stands now is a hotchpotch of provisions taken from various sources, which when put together innocently creates a cumulative confusion which will be further confounded when courts proceeds to apply it to specified factual situations. From the amount of typos, it appears that the Bill has been drafted in a very cursory manner. Editing has been slipshod, totally lacking the kind of earnestness which is to be employed and exhibited before thrusting the Bill into public domain seeking comments from stake holders.

Law is a purposive enterprise. We needn’t have an Admiralty Act just for the sake of having one. Guess we will be better off without an Act in the lines of the present Bill, which would only add on to our woes.  

However, there is a silver lining in the Bill that a lawyer will seldom miss to note.

Decades back, upon being shown the draft of the Indian Constitution, Judge Felix Frankfurter of the United States Supreme Court is said to have opined that lawyers in India are in for a heyday once it is put in place. The phenomenal possibilities of similar nature that the Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill, 2012 offers to maritime lawyers, if it becomes an Act, cannot be lost sight of ! 
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