Monday, June 1, 2009

Syam’s Maritime Case Notes: High Court directs Port Trust to Refund Berthing Charges collected during vessel’s idling due to port crane malfunction.

(Note by Adv. V.M. Syam Kumar)
(Lecturer for Maritime Law, National University for Advanced Legal Studies, Kochi.)
The practice of collecting berthing charges by the port even while the vessel remains idle due to fault of the port’s loading and unloading equipment, received a severe jolt recently when the Hon’ble High Court of Kerala declared such acts as illegal and directed the Port Trust to refund the berthing charges collected by them from the vessel’s agent.
In its judgment dtd.8.4.2009 the Hon’ble Court of Kerala speaking through His Lordship Mr. Justice S. Sirijagan took note of the following aspects: The vessel MV X-Press Jaya had to idle at the Q 9 berth of the Cochin Port Trust during July 2000 since the gantry crane of the port trust got damaged while unloading operation was in progress. As a result of the time taken for repairing the crane, the vessel had to remain berthed for a total of 17 shifts. Port Trust deducted Rs.1,24,091.52 from the agents of the vessel towards berthing charges for the whole 12 shifts including 8 shifts when the vessel remained idle at berth due to no fault of its. The said action of the port trust when challenged before the Hon’ble High Court of Kerala, the port trust contended that berthing charges are statutory and that the same have to be paid to the statutory authority who has statutorily fixed berthing charges and the Cochin Port Trust is a collecting agent. It was also contended by the port that berthing charges cannot be mixed with crane charges and that berthing charges are payable as long as the ship uses the berth and crane charges are payable for the period during which the crane is used by the ship. Port trust further contended that for the period during which the ship was berthed in the port, berthing charges are statutorily payable regardless of whether the continued berthing was on account of reasons not attributable to them.
Taking note of the statements in the counter affidavit filed by the Port as well as the law on the point, the Hon’ble Court held that “ …delay of 8 shifts in the matter of unloading containers from the petitioner’s ship was wholly on account of damage to the crane. In such circumstances, I am unable to countenance the contentions of these respondents that since the berthing and crane charges are separate, simply because the crane was non-functional berthing charges cannot be reduced. It is the duty of the Cochin Port Trust to keep the cranes in a good working condition. When the additional shifts necessary for unloading was solely on account of damage to the crane, naturally the continued berthing should also be attributed to the breakdown of the crane. When the breakdown of the crane is clearly admitted as also additional shifts used up for completing the unloading, I do not think that the respondents can escape form the liability to give proportionate reduction of berthing charges. Therefore, I am satisfied that the petitioners are entitled to refund of the berthing charges collected from them for the additional eight shifts as admitted in the counter affidavit.”
The Hon’ble Court thus allowed the writ petition filed on behalf of the vessel and its owners directing the Port to refund the additional berthing charges at the rates applicable in July, 2000 for additional eight shifts used by the vessel for unloading the cargo.
This decision which is in line with English Cases sets a very good precedent for the vessel owners and their agents across the whole of India as it would help them to recover similar illegal deductions made from their accounts by the port. Sea Consortium Pvt. Ltd. Singapore and their agents Forbes Gokak Ltd., Patvolk Division needs to be commented for initiating the same.