Sunday, July 10, 2016

Some suggestions on the Inland Vessels (Prevention and Control of Pollution and protection of Inland Water) Rules, 2016

Efforts to evolve the Rules relating to Prevention and Control of Pollution and protection of Inland Water is a welcome step. 
Since the State of Kerala has a wide network of Inland waters the said Rules are of enormous relevance to the state.
The Kerala Backwaters are a network of interconnected canals, rivers, lakes and inlets, a labyrinthine system formed by more than 900 km of waterways, and sometimes compared to the American Bayou. In the midst of this landscape there are a number of towns and cities, which serve as the starting and end points of backwater cruises. National Waterway 3 from Kollam to Kottapuram, covers a distance of 205 km and runs almost parallel to the coast line of southern Kerala facilitating both cargo movement and backwater tourism. The important rivers from north to south are; Valapattanam river (110 km.), Chaliar (69 km.), Kadalundipuzha (130 km.), Bharathapuzha (209 km.), Chalakudy river (130 km.), Periyar (244 km), Pamba (176 km), Achancoil (128 km.) and Kalladayar (121 km.). Other than these, there are 35 more small rivers and rivulets flowing down from the Ghats. (as per info available on line)
Most of these rivers are navigable up to the midland region, in country crafts. These waters are ecologically fragile and hence the importance of the above Rules need not be overemphasized.
The Rules are enacted as empowered under the Inland Vessel Act, 1917. The Draft Rules envisages measures to prevent and control pollution and to protect inland water.  
On a study of the draft of the Inland Vessels (Prevention and Control of Pollution and protection of Inland Water) Rules, 2016 the following aspects require consideration:
1.   The draft Rules do not take note of the main vessel board pollution sources.
2.   The Rules do not mention the standards of safety to be maintained on board vessels.
3.   No provision is seen incorporated for Control of discharge of oil or oily mixtures from vessel’s machinery.
4.   Most pollution of the inland waters arise out of operational incidents which in turn arise out of failure to follow procedures.  
5.   There has to be a fixation of liability on the Vessel owners/ operators and heavy fines and/or imprisonment for those involved
6.   Mandatory insurance cover for pollution incidents should be considered.
7.   Significant costs should be levied on Vessel owners/ operators in case of pollution acts.
8.   Time bound survey of the vessels and their classification ought to be insisted on for the purpose of ensuring prevention of pollution.
9.   Standard discharge connection ought to be specified in order to enable pipes of reception facilities to be connected with the Vessel's discharge pipeline for residues from machinery bilges and from sludge tanks. Both lines shall be fitted with a standard discharge connection as stipulated.
10.                Rules are silent about Ballast water management.
11.                No vessel shall be permitted to discharge into the inland waters ballast water without filtering the same.
12.                Ballast water which is not a clean ballast shall be discharged only in to reception facilities at Inland ports.
13.                Ballast water filtering equipment must be made available at the Inland port.  
14.                Kitchen and Human waste from the inland vessels should not be discharged directly into the inland waters.
15.                Every vessel above specified capacity shall carry on board a shipboard oil pollution emergency plan approved by the concerned authority.
16.                There ought to be a prohibition of carrying ballast water in any oil fuel tank.
17.                Protection against oil pollution in the event of collision or stranding of vessels ought to be provided.
18.                There has to be specific mention of the safety requirements for the cargo area of the vessel which carry hazardous chemicals and obnoxious substances.
19.                Construction of the said vessels which carry hazardous chemicals and obnoxious substances and the equipment’s require special mention.
20.                The capacity for the reception facilities at Inland Ports ought to be specified.
21.                Reception facilities within special areas like thickly populated areas would be specially mentioned and elaborated upon. 

Attention to the above aspects appears to be necessary to make the Rules complete and to equip it to meet its objective. 

Recent incident of leakage of Liquefied Ammonia Gas (LAG) from a barge transporting LAG to FACT at Champakkara requiring mass evacuation from the locality and sending panic across the city of Kochi has to be an eye opener. Insufficiency of legal norms ought not be a reason for repetition of such incidents. 

Sunday, April 26, 2015

My voyage with Indian Grace.

                      (V.M. Syam Kumar, Advocate, High Court of Kerala)
Every branch of law has its own share of land mark judgments. They are important mile stones in the evolution of law. Teachers teach them with emphasis and students study them earnestly. The study of law of tort is thus incomplete without reading Donogue V. Stevenson. Similarly, Constitutional law cannot be taught excluding Marbury v. Madison. Students of Contract law cannot ignore Carllil v. Carbolic Smoke Ball Co. and Company law demands deep acquaintance with Salomon v. A. Salomon & Co. They are cases which are to be chewed, eaten and digested at the law school. Maritime law too has its own fair share of land marks to offer. The House of Lords decision in MV Indian Grace is one among them.
Whatever cult status these legal land marks may have had at the law school, they are soon forgotten when we are out of the law school. The name of the case may still ring a bell, but the specifics may no longer be retained. Practice as a lawyer throws up other important legal norms of contemporary relevance to be remembered and the earlier land marks gradually fade from memory. They have only ‘academic relevance’ now. Further as most of these land marks are antiques from by gone times, they are seldom cited as authority of value since much water might have flown thereafter.  At the best, a passing reference may be made to them in a case of comparable facts or legal issues. That too only before a so called ‘academically inclined judge’, whose creed is fast vanishing.
Never in our wildest dreams do we expect to be part of the said land mark judgments or to get an opportunity to argue them out afresh. Who would expect to get to argue Donoghue V. Stevenson in the court room all over again as a lawyer for one of the parties to the dispute. We presume, and rightly so that the ginger beer consumed by Mrs. Donoghue would have long been digested with or without the snail and the smoke balls that Mrs Louisa Elizabeth Carlill had purchased to cure her aliment of flu would not survive beyond the date of the judgment in Carlill v. Carbolic Smoke Ball Co.
Similarly, while at law school I had like all my class mates expected that MV Indian Grace would have completed her voyage long back and all legal issues involving her cargo of shells and cartridges would have been laid to rest with the House of Lords decision. We presumed that the shells and cartridges carried on board MV Indian Grace for use in the Bofors howitzer guns acquired by Indian armed forces would all have been expended on our enemies at the borders.  Dr. A.M. Varkey our professor at Law school had made each of us read through the MV Indian Grace decision over and over again to impress upon the nuances of admiralty jurisdiction and the vexing issues concerning in rem and in personam actions involved therein. Like the rest, I expected MV Indian Grace to be relevant only for what is contained in the House of Lords decision. I was utterly wrong in presuming so.
By some strange twist of fate, after enrolling as a lawyer I had to be party to the  final legal voyage of MV Indian Grace and was called upon to defend her based on those very same issues and facts about her and her cargo which I had learned by heart at the law school.  
It all started one day with a dusty and shabby case bundle which I saw resting on my table upon my return from the court. I had just shifted my practice to Kochi and had joined the law firm Southern Law Chambers. I had had a prior stint as a junior to the legendary maritime lawyer S. Venkiteswaran in the Admiralty Court of Bombay. After my return I had just started attending the firm’s work and the bundle had been placed on my table at the instructions of the Senior Partner. It carried a note that I shall study the file and be prepared to argue the case as and when it comes up for hearing. It was clear that the green horn from Bombay with a Masters degree in Maritime law and bearing the tag of being the junior to the best maritime lawyer in India was being put to test. I carried the file home for study and slept over. Early morning next day, I proceeded to open it up and the contents revealed a suit filed by Government of India to recover some amounts from a company by the name M/s. India Steam Ship Company purportedly towards damages for the alleged short landing of some military equipment. The suit had been decreed and the defendant shipping company had come up in appeal before the High Court of Kerala challenging the judgment and decree of the Subordinate Judge, Cochin. The plaint disclosed the name of the vessel in which the cargo was carried and owned by the defendant M/s. India Steam Ship Company as MV Indian Grace.
The initial feeling that possessed me on reading the name MV Indian Grace was more that of a cheeky little surprise. What kind of coincidence could it be that there is another vessel bearing the same name as the legendary Indian Grace. I proceeded find out by reading through the dusty and worn out bunch of documents in the bundle. There was nothing in them connecting it to the House of Lords decision in the classic English case of MV Indian Grace. It spoke nothing about action in rem or action in personam and it related only to a simple suit for damages filed in the Subordinate judge’s court of Cochin.  So this could never possibly be the same ship MV Indian Grace about which every student of maritime law across the world is taught.
Later that day, I consulted my colleagues at the firm and asked them about the dirty bundle. All that they knew about it was that it is an old file that had been lying there since years and that the every time the matter came up for hearing, it was being adjourned by the Government Pleader. None of them knew about MV Indian Grace and the strange similarity that the subject vessel in the file bore to the land mark decision.  
As I had by then forgotten the specifics of the House of Lords judgment in MV Indian Grace, I decided to consult Christopher Hill the acclaimed author of “Maritime Law”. What I read left me startled. This is what he had to say on MV Indian Grace:
 “A case on the point is the Indian Grace (1998)1 Lloyd’s Rep. 1 HL. The plaintiff cargo owners brought proceedings against the owners in the Court of Cochin and then brought an action in rem in England. Subsequently judgment was delivered in Cochin. In due course owners submitted to the jurisdiction of the Admiralty Court. The plaintiffs threatened to arrest the vessel and security was provided. The issue was whether the England action in rem was ‘between the same parties or then privies’ within the meaning of sec. 34 as the action in which the plaintiffs obtained judgment in Cochin. When English action in rem was launched no judgment in personam in Cochin had yet been obtained; .....The English action was struck off. The case has been criticised by leading authors.” 
So the bundle in my hand was the appeal from the judgment of the Subordinate Judge’s court Cochin, which had been relied on by the House of Lords to strike off the English action. Issues in MV Indian Grace were thus still alive and kicking. The thrill that I experienced cannot be described in words. Here I had that once in a life time opportunity of pursuing further a case of classic genre. I set to task at once.
I rushed to the only place in the entire State which then had the Lloyd’s Law Reports, the most authoritative law reports on shipping cases from across the common law world, viz., the library of old High Court of Kerala at the Ram Mohan Palace. I knew from my daily visits, the exact place where the Lloyd’s Law Reports were stacked. No one came to that part of the library and the Lloyd’s Law Reports starting from 1918 to date remained neatly stacked in undisturbed slumber since ages. The book rack had by its side a window and one could stack books on its side, sit next to it and read. There was no electric fan over head but the gentle breeze that comes in once in a while through the window made reading there a pleasurable experience. For weeks, I spent all my afternoons perched on that window reading through the reports, ofcourse starting with the House Lords decision in Indian Grace.
The appeal to be argued before the High Court of Kerala though arising out of same facts was different from the legal issues considered by the House of Lords. Factual aspects as brought out during trial at Cochin assumed more relevance in the appeal. Comparing and confirming the factual observations in the judgment of the House Lords with the documents available in my bundle became by favourite enjoyment. The fire on board and the valiant efforts by the Master to put off the fire risking his life were all revealed from the documents. That the fire was not due to the actual fault or privity of the carrier and that the carrier was entitled to rely on the exception in the bill of lading was very evident.
The decision of the House Lords in MV Indian Grace had deeply affected the features of the in rem action till then exercised by English Courts. It was so important a land mark that, authors identified the different phases of legal growth by terming them as period before MV Indian Grace and after MV Indian Grace. Higher courts across the Common law world took note and relied on the decision in MV Indian Grace. Acknowledged experts on Maritime Law like A.M. Sheppard opined in their treatises that the decision was capable of drastically affecting some features of the action in rem followed in England till then. Since the House of Lords had relied on the Judgment of the Subordinate Judges Court Cochin in striking off the English action, the correctness of the said Judgment of the Sub court to be considered by the Kerala High Court in the appeal assumed relevance.
To my excitement the appeal was finally posted for consideration before a division Bench of the High Court of Kerala. After a fair share of adjournments from the part of the Government, the matter was taken up for final hearing and disposal. The senior presiding Judge being a former Civil Lawyer of standing and repute picked up the relevant facts deftly. The appeal was heard for days together. After noons were specifically set apart for exclusive hearing of the appeal. Carriers liability and intricacies of the term “actual fault and privity of the carrier” were considered by the Judges in detail. Scores of reports on the point from Lloyds Law Reports were placed before the bench by both sides. The response from the Bench was encouraging. It appeared that the Bench was convinced about the protections that the carrier and the vessel are entitled to under law. An important Judgment as a sequel to that of the House of Lords was in the immediate offing.
But before the Judgment could be rendered, to my dismay, the appeal was transferred to another Division Bench. We were back to square one. The presiding Judge here was a seasoned lawyer well aware of commercial legal practise. The Bench echoed the views of the earlier bench. Hearing went on for days. It would start off with a quip by the Judge, “Lets sail with Indian Grace.” Both sides argued in detail. Senior lawyer in the rank of Assistant Solicitor General of India appeared and argued for the Government. The Judge gave a peek of his mind by opining that the precedents and facts called for interference with the judgment of the sub-court. After days of lengthy hearing the new Division Bench proceeded to reserve the matter of dictation. We eagerly awaited a judgment capable of reporting across the maritime world from Kerala High Court, one that would be taken note of by English Lawyers and maritime experts. 
But MV Indian Grace was not destined to have a smooth legal journey. Before the date on which the judgment was to be delivered, the case was posted before the Bench by a process called ‘to be spoken to’. It was submitted on behalf of the Government of India that an amendment is proposed to be moved to hike the claim amount which at present was only for the short landed cargo. The Attorney General of India had in view of the failure of the English action, apparently suggested claiming a constructive total loss of the entire cargo and thus to enhance the claim amount from few lakhs to crores of Rupees. The rendering of judgment was thus sought to be adjourned to facilitate the filing of the amendment petition and the same was allowed. I had no reason to feel alarmed as the earlier two division Benches had been convinced of the case and was eager to render a detailed judgment touching upon all aspects of the case.
Within a week the appeal came up before another division bench.  The suggested amendment had not yet been carried and instead of seeking time for pursuing the same, the Government pressed for urgent hearing before the new bench. The hearing of MV Indian Grace thus commenced before the third division bench. Suffice to say that the Bench wound up the hearing within twenty five minutes and proceeded to deliver judgment dismissing the appeal.
Winning the appeal though was a prime objective was not the sole objective.  All through the hearing the single minded and earnest desire was that the judgment from the High Court of Kerala based on the detailed arguments placed by both sides touching on importance question of maritime law and carriage of goods by sea would lead to a judgment that will be a befitting sequel to the decision of the House of Lords in MV Indian Grace. The judgment that was finally rendered ran to less than four pages and carried a sentence to the effect that though numerous foreign decisions were placed before the Bench the same are not felt relevant to be discussed. Thus ended the long journey of MV Indian Grace.
I returned to office carrying the bundle which had now become huge with numerous copies of decisions from Lloyds reports.  I was visited by my senior partner with a comforting smile. He shared with me the wisest advice which I treasure all through the rest of my career. First one was “Never identify personally with the subject matter of your case however interesting it may be.” This was followed by a very practical advise which went like this. “When a case that had been heard at length by a Bench and is expected to be decided in your favour is sought to be adjourned by the opposite side, pray to the court that the same may be noted on file as PART HEARD.” This would have ensured that the matter would again come up only before the same Bench!
I realised that my theoretical knowledge of maritime law and my rummaging through volumes of Lloyds Law reports are no substitute to practical lawyering skills which can be acquired only through years of patient dedicated practise.
 Let me leave you with a sequel to this story. Around ten years after the above experience, at a private function I ran into the same Judge who had heard the MV Indian Grace appeal on its second round. He had since retired and to my surprise very well remembered the quip of sailing with Indian Grace. He told me that he had already dictated a detailed Judgment allowing the appeal filed by MV Indian Grace and same was not typed out and issued since the matter got adjourned.

Wednesday, February 18, 2015

Carriage by sea without any proof of contract of carriage? – Court dismisses the Carrier’s suit for freight charges.

(V.M. Syam Kumar, Advocate, Kochi)
What is the evidence required for proving contract of carriage by sea? Can a carrier prefer a claim for freight without producing any document to prove the contract of carriage by sea?
The issue was considered by the Subordinate Judge’s Court Kochi in a suit filed by the carrier. The matter pertained to transportation of goods comprising of ceramic tiles from Kandla to Kochi. Carrier alleged that the freight remained unpaid and amounts were further due towards demurrages and detention charges in Kochi port. Carrier filed the suit arraying the Shipper, the consignee and the seller of the cargo as defendants. Amounts were claimed from them jointly and severally.

During the trial, the carrier could not produce any documents evidencing the contract of carriage leading the learned Judge to conclude that The plaintiff who claims that goods were transported as per the instruction of the defendants, has not produced any evidence to prove the entrustment of the goods.”
The Indian statute on carriage of goods by sea Carriage of Goods by Sea Act, 1925 envisages the said Act shall have effect in relation to and in connection with the carriage of goods by sea in ships carrying goods from any port in India to any other port whether in or outside India. Schedule to the said Act lays down the rules relating to bills of lading. No such bill of lading was produced before the Court.
The Judgment was delivered by Judge Mr. P.K. Mohandas and the conclusion arrived at by the learned judge reads as follows:
 “There is no evidence to show that it was the defendants who entrusted the goods with the plaintiff and there was contract between the plaintiff and the defendants. There is no materials to prove the claim of the plaintiff that he has paid the amount to the port operator and the plaintiff is liable to pay the amounts to the Container Corporation of India. A careful reading of the materials on record shows that there is no reliable evidence to show that the defendants are liable to pay the amount claimed in the suit to the plaintiff. The plaintiff has not succeeded in proving their claim and the suit is only to be dismissed.”
Coastal shipping along Indian coast is riddled with mysterious practices. Many a times, cargo is carried without any tangible contractual documents. The above judgment is a strong deprecation of such practice.

Tuesday, February 17, 2015

How to prove ocean transit delay ? Recent Judgment on the liability of the carrier for ocean transit delay rendered by the Subordinate Judge’s Court, Kochi.

(V.M. Syam Kumar, Advocate, Kochi)
When can a shipment be termed as ‘time bound delivery shipment’? If no specific time period has been stipulated in the Bill of lading for delivery, is the carrier bound to deliver within a ‘reasonable’ time period? What would qualify as a reasonable time period and what should be the nature of the evidence to be tendered to substantiate the time period suggested as a “reasonable” one? Are the customary practises in the Liner trade relevant? Will the exemption clause in the bill of lading protect a carrier from the duty of delivering within the reasonable time period? When can such an exemption clause be invoked? In FCL/FCL cargo covered by a bill of lading with no delivery time requirement, can the carrier rely on the FCL clause to contend that the nature of the cargo being unknown to them, the time period and delay if any cannot be carriers concern?
Some of these questions came up for consideration before the Learned Subordinate Judge’s Court Kochi.  The judgment rendered thus assumes relevance.
The issue concerned a contract for supply of 100 metric tons CDJKL raw cashew crop from Mombasa to Kochi. Plaintiff alleged that the 1st defendant supplier with whom the contract was entered into had supplied inferior goods than what was contracted for and hence they are liable to the plaintiff in damages. The 1st defendant supplier resisted the suit on the ground that damage if any had occurred due to ocean transit delay on the part of the 5th defendant carrier.
The Court inter alia considered the liability of the carrier for ocean transit delay and the proof required for fixing liability on a carrier for such delay if any.   
After a detailed narration of the facts borne out during trial, the Learned Judge answers the question regarding liability of the carrier as follows:
“The question now to be considered is the reason for the physical damage to the cargo and the person who is responsible to make good of the loss sustained to the plaintiff. The contention of the plaintiff is that the cargo was damaged due to moisture condensation and there was fungus germination and the nuts were sprouted. It is also stated by PW1 that bad odour was emanating from the cargo. The plaintiff has no case that water has entered into the container during transit. There is no allegation that the container was damaged during transit and the damage to the cargo was caused due to any such reason. In Ext.A16 it is stated by the 3rd defendant that the cargo was damaged due to excess moisture/condensation as a result of ocean transit delay of 42 days. It is come out in evidence that if the cashew nuts are properly dried there is no chance of any condensation due to moisture and thereby causing damage even if it is kept in the container for a period of hundred days. In this case it is admitted that the cargo was delivered within 40 days of shipment. Though it is stated that only 15-20 days will be taken for transportation of the containers from Mombasa port to Cochin port, it is admitted by the plaintiff's counsel that the transportation was not a time bound one. There is no evidence to show that the carrier had undertaken to deliver the goods within a particular period. Shipment was on FCL/FCL basis and hence the carrier may not be aware of the quality of the articles stowed in the container, apart from the declaration made by the shipper. If the cargo is properly dried and sufficient protection is taken to absorb excess moisture, there is no chance of any condensation. In this case it is stated that the first defendant had kept papers and moisture absorbing chemicals to avoid condensation. But the evidence on record shows that the cargo was damaged due to condensation. It is admitted that the damage was caused as the cargo was wet. Since none of the parties have got a contention that water entered into the container during transit, it can be seen that the damage was due to excess moisture. In Ext.A6 it is reported that the moisture content was 8%. There is no material to suggest the normal or permitted moisture content limit in dried cashew. Anyhow, it is the duty of the supplier to take all possible steps to supply cargo of the assured quality and quantity. As stated above, in Ext.A2 it is clearly stated that the buyer has the right to re-inspect the quality and weight of the cargo. So, the primary responsibility to supply the cargo of the desired quality is on the seller. As stated above, if the seller had taken sufficient precautions, there was no chance of any damage due to delay in transit. As the carrier was not aware of the quality of the cargo inside the container and there was no stipulation to deliver the cargo within a particular period, it is not possible to find that the 5th defendant is liable for the loss sustained to the plaintiff, even if it is found that there was some delay in delivering the cargo.”

The Judgement was delivered in favour of the plaintiff fixing liability on the seller. The Learned Judge dismissed the suit as against the carrier by holding as follows:
“During my discussion in the above paragraphs I have already found that the damage was caused due to excess moisture/condensation. It is the duty of the seller to supply good quality materials to the buyer. The buyer has got every right to get the goods of the assured quality and quantity. As perExt.A2 contract buyer can reinspected cargo and the same suggest that the buyer has the right to accept or reject the cargo. It is admitted that as per the terms of the contract the buyer has paid 5% of the value of the articles in advance and remaining 95% was paid on 1.3.2005, on arrival of the cargo at Cochin port. The first defendant is not disputing the payments made by the plaintiff. Once the goods is found to of inferior quality or defective, the seller is liable to make good of the loss sustained to the buyer. Though the first defendant has taken a contention that the 5th defendant is answerable to the plaint claim, in my discussion in the foregoing paragraphs I have already found that the 5th defendant is not liable to make good of the loss sustained to the plaintiff. The claim in the suit is not covered by the insurance policy also. So the first defendant is liable to make good of the loss sustained to the plaintiff.”
The judgment rendered by Judge P.K. Mohandas assumes relevance in so far as the nature of evidence required to fix liability on the ocean carrier for transit delay has been a grey area. The Judgement rendered in this case inter alia sheds much needed light on the legal requirements in the said respect.

(Judgment  can be accessed from the links above)