Shipping Containers - CFS functioning on leased land- Owner of the land cannot detain third party containers for amounts due from the lesse. Hold High Court of Kerala

CFS functioning on Leased land - Owner of the land cannot detain third party shipping containers for amounts due from the Lessee - High Court of Kerala.

Section 148 of the Indian Contract Act, 1872 cannot be invoked against third party containers by the land owner towards realizing his lease rent charges from his lessee held the High Court of Kerala in a recent judgment.

The Hon’ble Mr. Justice Raja Vijayaraghavan based on the facts of the case held as follows: “The explanation to Section 148 would apply only in cases wherein, a person who is already in possession of the goods of others, contracts to hold them as a bailee. In the instant case, such a circumstance has not arisen. At this juncture, it would be profitable to bear in mind that the contention of the 4th respondent in the counter affidavit filed initially was that the petitioners had trespassed into the CFS facility and that they had illegally stored the containers there. The said contention was found to be without merit by this Court in view of the stand taken in the previous proceedings by the 4th respondent. Instead of warning the agencies who had parked their Containers in the CFS facility on the strength of the contract entered into with the 5th respondent about the termination of the relationship between the respondents 4 and 5 and giving a breathing time to remove the containers from the facility, the 4th respondent proceeded to file an application under Section 9 of the Act and obtained an interdictory order. The said application has hence been withdrawn as well. In view of the above, I am not in a position to accept the contention of the 4th respondent that they are in a position to retain such goods until they receive due remuneration from the petitioners herein for the alleged act of trespassing into the CFS facility and for parking their containers there.”

The Hon'ble Court directed that the owner/agent of the container is entitiled to be provided with police protection to remove the relevant shipping containers lying in the CFS. 

The complete judgment can be accessed at the link below

https://www.scribd.com/document/507228606/Maersk-Opal-Judgment-34460?secret_password=Ajbw0AwuQDoarPXLNgMZ 

Deciphering the Award of Permanent Court of Arbitration in The Italian Republic V. The Republic of India (Enrica Lexie Incident)

(V.M.Syam Kumar, Advocate, High Court of Kerala)

Let us weigh in the gains and losses for India, as best as they can be discerned from the ‘Extracts for Advance Publication’ which has been released today (02/07/2020). Perhaps that will enable us to decide whether we should celebrate the Award or whether we should seriously ponder over the legal course of action to be taken, so as to secure our fishing folk from similar ignominies in the future.

Let’s begin with the gains.

India’s gains (that matter!):

 1.PCA Award finds that by interfering with the navigation of the “St. Antony” Italy has acted in breach of Article 87, paragraph 1, subparagraph (a), and Article 90 of the Convention.

(Art. 87 concerns Freedom of the high seas and Para 1 (a) and Art. 90 provides that every State, whether coastal or land-locked, has the right to sail ships flying its flag on the high seas. Thus the award holds that Italy had interfered with the said right of the Indian registered marine boat “St. Antony”).

      2.The Award then reaffirms that Italy has breached Article 87, paragraph 1, subparagraph (a), and Article 90 of the Convention but holds that the said finding in the Award constitutes adequate satisfaction for the injury to India’s non-material interest.

(For the material interest lost due to the said breach by Italy, the award later finds that compensation is payable.)

  3.The Awards holds that as a result of the breach by Italy of Article 87, paragraph 1, subparagraph (a), and Article 90 of the Convention, India is entitled to payment of compensation in connection with loss of life, physical harm, material damage to property (including to the “St. Antony”) and moral harm suffered by the captain and other crew members of the “St. Antony”.

(This will entitle India to claim on behalf of the victims compensation in addition to Rs.1 Crore that had already been paid to the heirs of each of the deceased fishermen, by the Republic of Italy.)

    4.Award finds that there is no need to address the question of the compatibility with UNCLOS of India’s 1976 Maritime Zone Act and its 1981 Notification.

(This finding saves the provisions of the India’s 1976 Maritime Zone Act, some of  which contradicts the stipulations of UNCLOS. For eg. Sec. 5  of the Indian Act envisages for India within its contiguous zone 'security' interests.  This runs contrary to Art.33 of the UNCLOS which does not stipulate 'security' as an interest which a coastal state can exercise within its Contiguous zone. India has by its notification extended its Penal laws including I.P.C. and Cr. P.C. over its EEZ which again is ultra vires the powers of under UNCLOS. Italy had alleged that India’s 1976 Maritime Zone Act and its 1981 Notification violates Articles 33(1), 56(1), 56(2), 58(2), 87(1)(a) and/or 89 of UNCLOS. PCA by deciding not to address the question of the compatibility with UNCLOS of India’s 1976 Maritime Zone Act and its 1981 Notification, saves the said Indian legal norms from scrutiny at the touch stone of UNCLOS)

India’s gains (of lesser consequence):

  

  1.PCA finds that India has not acted in breach of Article 87, paragraph 1, subparagraph (a), and Article 92 of the Convention.

(Italy had, based on the action taken by Indian law enforcement agencies vis a vis ENRICA LEXIE after the incident, alleged that India had violated Italy’s freedom of navigation and thus was in breach of UNCLOS Article 87(1)(a). Further, it was also alleged that Italy’s exclusive jurisdiction over the ENRICA LEXIE secured by Article 92 of UNCLOS, stood breached. This and similar contentions based on actions taken by Indian agencies, have been found to be not violative of Art. 87 (1)(a) and 92.

        2.PCA finds that Article 97, paragraphs 1 and 3, of the Convention are not applicable in the present case.

(Art. 97 of UNCLOS concerns Penal jurisdiction in matters of collision or any other incident of navigation. This is a very crucial article which had altered the dictum in the celebrated S.S. LOTUS Case, which had been adverted to by Italy while the Supreme Court of India examined the legality of Indian action arising out of Enrica Lexie incident. PCA finding that Article 97, paragraphs 1 and 3, of the Convention are not applicable in the present case brings in solace for India as a strict reliance on the wordings of Art. 97 would not have afforded to India the concurrent jurisdiction that benefited Turkey in SS LOTUS Case. The reasoning for this bemusing finding, which may be elaborated in detail in the Award, is eagerly awaited.)  

     3.Finding that that India has not violated Article 100 of the Convention and that therefore Article 300 cannot be invoked in the present case.

(Article 100 of UNCLOS concerns with a state's duty to cooperate in the repression of piracy. Article 300 on the other hand pertains to 'Good faith and abuse of rights' and stipulates that State Parties shall fulfill in good faith the obligations assumed under UNCLOS and shall exercise the rights, jurisdiction and freedoms recognized in UNCLOS in a manner which would not constitute an abuse of right. Italy has alleged that the fishermen were shot and killed as they were mistaken for pirates and that ENRICA LEXIE after the shooting had duly relayed to shore a piratical incident. It is based on the said facts and its Indian response that Italy had pressed in Art. 100 and Art. 300. The said contentions , which by itself had flimsy standing, was correctly rejected by PCA to the relief of India.)    

   4.The PCA Arbitral Tribunal retains jurisdiction, should either Party or both Parties wish to apply for a ruling from the PCA in respect of the quantification of compensation due to India.

(This ensures that both sides can approach the PCA in case if they are not able to agree among themselves regarding the amount of compensation due to India.)  

India’s Losses:

    1.PCA found that India must take the necessary steps to cease to exercise its criminal jurisdiction over the Marines, and that no other remedies are required.

(This finding is a severe blow to India and to the Indian law enforcement agencies like the Coast guard and state marine police as under Indian law they have ample power to exercise criminal jurisdiction up till 200 nautical miles EEZ. In Republic of Italy v. Union of India (2013) 4 SCC 721., the Supreme Court of India had inter alia ruled that the incident took place within the Contiguous Zone of India over which, “under the provisions of the Maritime Zones Act, 1976, and UNCLOS 1982, India is entitled to exercise rights of sovereignty. Suffice to say that, the PCA award unsettles the said judgment of the highest court of the land.)

    2.PCA Award concludes that the Italian marines are entitled to immunity in relation to the acts that they committed during the incident of 15 February 2012, and that India is precluded from exercising its jurisdiction over the Marines.

(This finding in a single stroke, not only nullified all actions taken by the Indian law enforcement agencies vis a vis the accused and rendered them illegal and unsustainable. This is so notwithstanding the judgment of the Indian Supreme Court which upheld all such actions by central agencies (barring that of registering case by the police of the state of Kerala) as legal and valid. The singular effect of such a finding will be that, if a similar incident was to happen in the future upon Indian coastal waters, the law enforcement agencies will find it difficult nay impossible to effectively intervene to protect the interests of the country and its citizens who frequent the EEZ for their living. How this finding is reconciled with the earlier finding based on Article 87, paragraph 1, subparagraph (a), and Article 92 of the Convention is to be seen from the Award.)    

     3.The Award finds that Italy has not violated India’s sovereign rights under Article 56 of the Convention.

(This finding fails to recognize India’s sovereign rights within its EEZ and undermines the rights of Indian fisher folk to peacefully engage in fishing within their patrimonial sea. Article 56 of UNCLOS mentioned in the Award, stipulates the Rights, jurisdiction and duties of the coastal State in the exclusive economic zone. The incident involving Enrica Lexie happened admittedly within the EEZ of India. In view of Art. 56 India has the sovereign right to exploit the living resources within its EEZ. The fishermen on board fishing boat ‘St. Antony’ registered in the Indian State of Tamil Nadu, while being shot dead, were peaceably exercising their right to fish within the waters of India which had been reserved for them by their sovereign. This finding of PCA, in the facts of circumstances of the case whittles down the ambit of Art 56 and could have future repercussions for the fishing folk.)

    4.PCA finds that Italy has not violated Article 58, paragraph 3, of the Convention.

(This finding in the award of the PCA jeopardizes the secured rights of India within its EEZ vis a vis the foreign flag vessels and could limit the power of Indian law enforcement agencies to ensure foreign flag vessels plying through the Indian EEZ honour the mandates of Article 58 of UNCLOS. That article stipulates the Rights and duties of other States in the EEZ. Paragraph 3 of Art. 58 stipulate that in exercising their rights and performing their duties under UNCLOS in the EEZ, States shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State in accordance with the provisions of UNCLOS and other rules of international law in so far as they are not incompatible with Part V of UNCLOS. India ought to have argued that there exists a customary international practice of extending coastal penal jurisdiction up till EEZ and thus as stipulated in Paragraph 3 of Art. 58, compliance of its laws were mandatory. The finding now delivered by PCA restricting the scope of Art. 58, could prove onerous for India.

       5.PCA award concludes that Italy has not infringed on India’s rights under Article 88 of the Convention.

(This is yet another finding of the PCA in the award which when read in the context of the facts leading to the case, could prove costly for India in the future. The same could also undermine the efforts towards reserving high seas for peaceful purposes as enshrined in Art. 88 of UNCLOS. At a time when armed naval and private maritime security agencies are proliferating the merchant vessels plying through Indian EEZ, the above finding does not augur well for Indian fisher folk and also for the Indian law enforcement agencies who have the unenviable task of securing our vast coastal waters) 

India’s Gains and Losses  

Indian Media has started celebrating the Award as a stupendous success. The compensation part of the Award may be alluring to some. But what lies beneath can be overlooked only at the nation’s peril. To get a full picture of the reasons that lead the learned arbitrators to some of the interesting findings arrived, we may have wait till the Award is published. 

The ‘Extracts for Advance Publication’ published today reveal consistent dissent from Learned Arbitrator Robinson against the majority. Perhaps, the most pithy and valid reasons could be found in that dissent.

                                                      ***

MY VOYAGE WITH INDIAN GRACE

                      (V.M. Syam Kumar, Advocate, High Court of Kerala) 
                                    (For the NUALS students Magazine) 

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.

                                                           ***

Jurisdiction clause in the bill of lading has primacy: Court uphold Carriers preliminary defense.

(V.M. Syam Kumar LL.M., Advocate, Kochi)

The parties are bound by the terms of the bill of lading and also the forum which they have chosen for entertaining any case in connection with the dispute relating to the transaction between them. Holding thus the Subordinate Judge, Kochi has vide Order dtd. 24.01.2017 directed return of the plaint to the plaintiff for presentation before proper court having jurisdiction. The Learned Sub- Judge had been following the judgment of the Hon’ble Supreme Court of India reported in 1990 (3) SCC 481 and AIR 2003 SC 1177.

Plaint was filed before the Subordinate Judge, Kochi by a purported owner of the goods seeking recovery of certain amounts from the carrier for alleged breach of contract of carriage evidenced by a Bill of lading issued at Kochi. The port of loading was Kochi, India and the port of discharge was Valencia.

Since the defendant carrier in its written statement raised the preliminary objection of jurisdiction, the learned sub-judge proceeded to consider the said question at the threshold before proceeding to trial.

The relevant clause (Clause 26) in the Bill of lading pertaining to jurisdiction read as follows:

Whenever clause 6.2(d) and /or whenever USCOGSA applies whether by virtue of Carriage of Goods to and from the United States of America or otherwise, that stage of the Carriage is to be governed by United States law and the United States Federal Court of the Southern District of New York is to have the exclusive jurisdiction to hear all disputes in respect thereof. In all other cases, this bill of lading shall be governed by and construed in accordance with English law and all disputes arising hereunder shall be determined by the English High Court of Justice in London to the exclusion of the jurisdiction of the courts of another country.

The Hon’ble Supreme Court has unequivocally laid down the law with respect to the transfer of rights under a bill of lading by holding in British India Steam Navigation Co. Ltd. V. Shanmughavilas Cashew Industries (1990) 3 SCC 481 as follows: “A bill of lading is intended to provide for the rights and liabilities of the parties arising out of the contract of affreightment. If the consignee claims the goods under a bill of lading he is bound by its terms. The bill of lading is the symbol of goods and the right to possess those passes to the transferee of the bill of lading. In other words, its transfer is symbolic of the transfer of the goods themselves and until the goods have been delivered, the delivery of the duly endorsed bill of lading operates as between the transferor or transferee, and all who claim through them as a physical delivery of the goods would do. The bill of lading is a negotiable instrument in the sense of carrying with it the right to demand and have possession of the goods described in it. It also carries with it the rights and liabilities under the contract where the property in the goods is also transferred.”

The question of jurisdiction was squarely covered in favour of these defendants by the dictum laid down by the Hon’ble Supreme Court in British India Steam Navigation Co. Ltd. V. Shanmughavilas Cashew Industries (1990) 3 SCC 481. The said case also has a jurisdiction clause in a bill of lading which is similar to the case at hand. It is pertinent to point out that the said Supreme Court decision arose out of a suit for damages based on a bill of lading filed before the Hon’ble Subordinate Judge’s Court, Cochin.

The Hon’ble Supreme Court after detailed consideration of the matter has laid down the law regarding jurisdiction in a suit based on bill of lading as follows: “The jurisdiction of the Court in actions in personam may be decided upon by the parties themselves based on various connecting factors. The parties to a contract in international trade or commerce may agree in advance on the forum which is to have jurisdiction to determine disputes which may arise between them. The express choice of law made by the parties obviates the need for interpretation. The chosen court may be a court in the country of one or both the parties, or it may be a neutral forum. The jurisdiction clause may provide for a submission to the courts of a particular country, or to a court identified by a formula in a printed standard form such as a bill of lading referring disputes to the carrier’ principal place of business.”

The Hon’ble Supreme Court further held as follows: “Clause 3 of the Bill of lading also contains the selection of law made by the parties. The contract is governed by English law and disputes are to be determined according to English law. Is the selection of law binding? In Cheshire and North’s Private International Law (11 th Edition, page 495) while discussing about the interpretation of contracts the authors say: “When the stage has been reached where an obligation, formally and essentially valid and binding on the parties of full capacity, has been created, then in the further matters that may require the intervention of the court, there I, speaking generally, no reason in principle why the parties should not be free to select the governing law.” The express choice of law made by the parties obviates need for interpretation.

In the absence of express choice the question of the proper law of contract would arise. The parties to a contract should be bound by the jurisdiction clause to which they have agreed unless there is some strong reason to the contrary.

The Hon’ble Supreme Court in Modi Entertainment Network & Another V. WSG Criket Pvt. Ltd. AIR 2003 SC 1177 held that

“But then the jurisdiction clause indicates that the intention of the parties is to have the disputes resolved in accordance with the principles of English law by English Court. Unless good and sufficient reasons are shown by the appellants, the intention of the parties as evidenced by their contract must be given effect to.”

The recent Order rendered by the learned Subordinate Judge Smt. A.S. Mallika, thus abides by the well settled law as laid down by the Hon’ble Supreme Court in various decisions and is an important mile stone in the adjudication of carriage of goods by sea cases in Kochi. (Read the full text of the Order at https://www.scribd.com/document/344570693/Os-129-Kochi-Ia-Order-Maersk1)

                                                         ***

Maintainability of civil suit against Steamer Agent: Plaint returned for non-compliance of sec. 20 CPC.

(V.M. Syam Kumar, Advocate, High Court of Kerala)

Mere issuance of insurance policy at a particular place does not confer jurisdiction on the civil court at that place to entertain a suit against the steamer agent when neither the port of loading nor the port of discharge or the place of delivery are within the jurisdictional limits of the said court. The requirements under sec. 20 of the Code of Civil Procedure, 1908 have to be satisfied before such a suit can be entertained. 
A civil Suit filed against the steamer agent by the insurer & the shipper at the latter’s place of business was recently rejected by the Civil Court pointing out that noncompliance of sec. 20 CPC is fatal.

It was contended by the steamer agent that the Contract of affreightment as evidenced by the terms and conditions of the bills of lading was entered in to in Mtwara and the contract was to be completed in Tuticorin. The defendant had no office and does not function from within the jurisdictional limits of the Munsiff’s Court, Kollam. No part of the cause of action has arisen within the jurisdictional limits of the Munsiff’s Court, Kollam.. Thus neither the contract of affreightment was entered in to between the parties within the jurisdiction of the Munsiff’s Court, Kollam nor was any part of the contract performed or to be performed within the said jurisdiction. Hence only the Courts at Mtwara or Tuticorin have jurisdiction to entertain any action pertaining to the relevant the Contract of affreightment. In the circumstances the above suit was liable to be dismissed; or in the alternative the plaint is to be returned for filing before the appropriate forum. Further in view of the specific provision contained in the Contract of affreightment as evidenced by the terms and conditions of the bills of lading, issued by the Carrier, the Munsiff Court, Kollam has no jurisdiction to try the matter, that being a condition agreed upon between the parties to the contract of affreightment. All persons claiming under the respective parties to the contract of affreightment are bound by all the terms and conditions contained in the contract.

The learned Judge accepted the contentions put forth by the steamer agent and held as follows:

“Merely because the office of the plaintiff is situated within the jurisdictional limits of this court it cannot be contended that this court has jurisdiction to entertain the suit especially where the plaintiff has no case that any part of the transaction took place in the office of the plaintiffs. As pointed out by the learned counsel for the defendant, the plaintiff has no case that the contract was executed within the jurisdiction of this court or that the contract was for transit from or to a place within the jurisdiction of this court. On the other hand admittedly, the contract was for carriage of goods from Port Mtwara Tanzania to Tuticorin, Tamil Nadu and admittedly the office of the defendant is situated at Tuticorin, Tamil Nadu. Hence it is found that this court has no jurisdiction to entertain the suit.”

Many a time the carrier or their agent and the discharge port are compelled to defend suits initiated in places which have no relevance or collection with the contract of carriage. Such suits are filed on the pretext that the goods carried are covered by an insurance policy which had been issued at the particular place were the suit had been initiated. Notwithstanding the fact that neither the carrier nor the steamer agent are privy to such insurance policies, they are compelled to defend civil action at such places which are alien to them.

The judgment rendered by the presiding judge Smt. Prasanna Gopan reiterates the well settled law that mere issuance of an insurance policy does not confer jurisdiction upon the courts at the place of such issuance to entertain a damage claim against the carrier or its agent if the requirements under section 20 of the code of civil procedure are not satisfied.

The Judgment of the Hon’ble Court rendered by Smt. Prasanna Gopan can be accessed at: 
https://www.scribd.com/document/327754997/Os-544-Final-Order-Bsv-Kollam-Pandi
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