Arbitration And Admiralty: Perspectives From India And International Jurisdictions
India is known for its rich maritime geography, with its nine coastal states and union territories hosting numerous ports, each playing a significant role in the maritime economy. The terms Admiralty and Maritime are often used together, but originally, Admiralty refers to a specific court in England and the American colonies that handled legal disputes involving contracts or torts (civil wrongdoings) occurring on the high seas, beyond the jurisdiction of any nation's land borders.
Substantive maritime law developed through the expansion of Admiralty court jurisdiction, which came to encompass all activities related to the high seas and similar activities on navigable waters.
Maritime law refers to a body of law that deals with shipping and navigation, whereas Admiralty law is a branch of jurisprudence that regulates maritime matters of both civil and criminal nature, and it involves a court or tribunal administering maritime law through its own unique procedures.
With the advent of globalisation, the maritime industry has grown significantly
and has become a cornerstone of domestic and international trade and commerce.
As the ongoing rapid developments in the maritime industry has increased in huge
numbers, the disputes have also took a toll in between.
To address these maritime disputes, there have been taken many steps to avoid
traditional court litigation and put more emphasise on Alternative Dispute
Resolution (ADR) like Arbitration, Mediation and Conciliation. Maritime
Arbitration is one of the preferred method to resolve disputes and it has its
roots back in International commercial arbitration.
While both types of arbitration focuses on resolving disputes between parties
from different countries, maritime arbitration has a unique character due to its
specialised focus on shipping, trade and navigation. It is usually seen that
there is always an arbitration clause in Shipping contracts. So it makes it easy
to resolve disputes through arbitration rather than approaching the traditional
litigation.
Evolution Of Maritime Arbitration In India:
India was known for its import and export of various goods and a major business
hub during the British colonial era. All that used to happen at the ports of
Presidency states like Bombay, Madras, Calcutta and others which were governed
under the East India Company.
So precisely the admiralty statutes were made by the Britishers which granted
the Presidency High Courts in India to have the power to handle the disputes
regarding maritime cases like arrest of ships, detention, sale and other matters
connected therewith or incidental thereto. Even after India gained Independence,
these colonial admiralty statutes were still applicable and heavy judicial
interpretation was relied in maritime matters.
It was then in the case of M.V Elizabeth vs Harwan Investment and Technology Pvt
Ltd the Supreme Court for the very first time relied upon the Principles of
International Conventions of Maritime laws which were applicable vis-a-vis to
the Indian law as the Indian Admiralty laws very outdated. The Supreme Court
further issued directions for the prompt enactment to address the issue of these
outdated admiralty laws and thus the 151st Report on Admiralty Law was issued by
the Law Commission of India in 1994.
Then a bill pertaining to Admiralty law was proposed in the Lok Sabha in 2005
but it could not get materialise into law. Then finally The Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017 was enacted. The act
repealed the colonial law and added seven High courts situated in coastal Indian
States to have jurisdiction over admiralty matters.
The act addresses maritime disputes in two typical categories i.e. in Personam
and in rem. similar to the other forms of arbitration, maritime arbitration
typically arises from a contractual arbitration clause which is of utmost
importance. It includes all the details of the arbitration like seat of
arbitration, procedures to be followed etc. however the language of the
arbitration clauses should be clear and precise otherwise it can lead the courts
to interfere in middle just like it happened in the case of Harmony Innovation
Shipping Ltd. vs Gupta Coal India Ltd.
But then there is always a lacuna in the law. So the courts can create their own
procedural solutions and interpret in a way in which it protects the rights of
innocent claimants or defendants. Recently in the case of OSV Crest Mercury 1
(IMO 9724398) vs. Vision Projects Technologies Pvt. Ltd. , the Bombay High
Court addressed the relationship between arbitration proceedings and admiralty
suits.
The court ruled that an admiralty suit for an arrest of a ship may still be
maintained while arbitration is still ongoing. This ruling emphasises the idea
that parties may pursue admiralty remedies in addition to arbitration, enabling
the detention of a vessel during arbitration proceedings.
This ruling highlights that High Court's Admiralty jurisdiction over admiralty
cases and makes it clear that a party may pursue quick remedy through admiralty
measures, including the arrest of a ship, in order to establish their rights,
even in cases where there is an arbitration agreement. This decision also
quietly clarifies the procedural interactions between admiralty litigation and
arbitration, which is very crucial for maritime law.
International Point Of View:
So far, International maritime law has been way more progressive due the uniform
standards and consistent norms. Thats why Indian Maritime law is one of the most
neglected part of commercial law in India. All the shipping disputes are highly
relied and preferred on arbitration as a mean to resolute. Despite the
international processes for resolving maritime disputes are well-established and
well acknowledged, the Indian framework for resolving maritime disputes is still
in its early stages and faces obstacles with regard to international recognition
and efficiency.
While the other countries have their own Arbitration and Mediation centres for
solving marine and shipping disputes like London, Singapore, Hong Kong etc.,
India's first Arbitration centre dedicated to maritime disputes was launched as
Gujarat International Maritime Arbitration Centre (GIMAC) which is a small
significant step in country's maritime arbitration landscape.
Although it could be viewed as a "small baby-step" in the bigger picture of
international arbitration, this still represents an important step forward for
India's expanding marine sector and future forward thinking. The London Maritime
Arbitration Association continues to be a pioneer for solving shipping disputes
in London. It can be also viewed in Cargill International S.A v. Bangladesh
Sugar & Food Industries Corporation where the seat of Arbitration was decided as
London as a neutral venue.
Lately in the news, Shanghai has been decided to host a Landmark International
Maritime Arbitration case at North Bund where two companies mutually decided to
conduct arbitration proceedings in the city to resolve their disputes swiftly
which includes the appointment of an arbitrator by both parties to settle the
dispute swiftly and it thus marks the first Maritime interim Arbitration case in
China with a foreign component.
Conclusion And Way Ahead:
In conclusion it is clearly evident that Maritime industry continues to develop
and Maritime arbitration has also gained a lot of popularity both,
Internationally as well as in India. It has met with a lot of demands like
historical changes, Admiralty law frameworks, etc. It can be also seen that
Maritime arbitration is heavily impacted by its nature of dispute and it still
does lag behind from both global and Indian stage perspective.
The enactment of the Admiralty Act, 2017 and the launch of Gujarat International
Maritime Arbitration Centre (GIMAC) has marked a significant step forward plus
the Indian courts acting as neutral evaluators whenever the arbitration or any
maritime dispute comes into litigation. Though India still continues to develop
its maritime arbitration framework, it does have the potential to be a future
International Maritime Arbitration and Dispute resolution hub and thus enhancing
its role in global trade as well.
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