M.V. Elisabeth v/s Harwan Investment and Trading: IRAC Analysis
Issue:
Whether, according to the relevant laws and legal principles, do Indian High Courts(in this case, specifically the Andhra Pradesh High Court) have admiralty jurisdiction against a foreign ship, owned by a foreign company and not having a place of residence or business in India, thereby giving them power to arrest them once they enter into Indian waters for the purposes of a legal proceeding?
M.V. Elisabeth v. Harwan Investment and Trading (P) Ltd., 1993 Supp (2) SCC 433
Rule
The High Court of Admiralty may exercise the competence granted to it by this Act through either in rem or in personam proceedings.
An action in personam is an ordinary action as in common law courts.
The nature of actions in rem and acts in personam are described as follows in Halsbury's Laws of England, paragraph 310:
"Nature of actions in rem and actions in personam." - An action in rem is a lawsuit brought against a ship directly, however it has recently been contested that the owners of the ship cannot be held personally liable if they do not present in court to defend their assets.
It has been stated that if the defendant enters an appearance, an action in rem transforms into, or continues as, an action in personam; however, the High Court's Admiralty jurisdiction may now be invoked by an action in personam in all circumstances, subject to some limitations in collision and similar cases, unless the defendant submits to or agrees to submit to the Court's jurisdiction.
The foundation of an action in rem is the lien resulting from the personal liability of the owner of the res. Therefore, it is not possible to bring an action in rem to collect damages for harm done to a ship by the defendant's ship's master's malicious act or for harm done when the ship was in the control of a third party due to a compelled requisition. On the other hand, it has been successful to take legal action against ships that were authorised by their owners to be in the custody and control of charterers in order to enforce liens that developed while the ships were under their control.
As in other proceedings in the High Court, the defendant in an Admiralty action in personam is responsible for the full amount of the plaintiff's proven claim. A defendant who shows up in an action in rem is also now accountable for the whole judgement, even if it exceeds the value of the res or the bail set. However, the defendant's claim to the benefit of statutory liability-limitation clauses may have an impact on the right to collect damages.
An action in rem is one that is taken against a thing, a good, or specific property (such as a ship or cargo) as opposed to an individual. The res may be seized by the court and sold to pay for a judgement in rem against it. By suing against a res, a plaintiff receives security for his claim. As long as the property being sued over (the res) is within the jurisdiction, an action may be brought in rem.
Section 35 of the Admiralty Courts Act, 1861, 24 Vict. c.10 reads:
"The jurisdiction conferred by this Act on the High Court of Admiralty may be exercised either by proceedings in rem or by proceedings in personam." [Jurisdiction of the Court]'
India did not sign and consequently did not ratify or promulgate either the International Convention Relating to the Arrest of Seagoing Ships, signed at Brussels on 10 May 1952 and at Geneva on 12 March 1999 but the principles were adopted by Supreme Court of India judgements in M.V. Elisabeth And Ors vs Harwan Investment And Trading ... on 26 February, 1992 and in Liverpool & London S.P. & I Asson. ... vs M.V. Sea Success1 I & Anr on 20 November, 2003 matters as part of the common law of India and applicable for the enforcement of maritime claims against foreign ships.
International Convention Relating To The Arrest Of Sea-Going Ships:
Article 1
In this Convention the following words shall have the meanings hereby assigned to them:
215. High Courts to be courts of record Every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself.
Article 225 in The Constitution Of India 1949
225. Jurisdiction of existing High Courts Subject to the provisions of this Constitution and to the provisions of any law of the appropriate Legislature made by virtue of powers conferred on that Legislature by this Constitution, the jurisdiction of, and the law administered in, any existing High Court, and the respective powers of the Judges thereof in relation to the administration of justice in the Court, including any power to make rules of Court and to regulate the sittings of the Court and of members thereof sitting alone or in Division Courts, shall be the same as immediately before the commencement of this Constitution:
Provided that any restriction to which the exercise of original jurisdiction by any of the High Courts with respect to any matter concerning the revenue or concerning any act ordered or done in the collection thereof was subject immediately before the commencement of this Constitution shall no longer apply to the exercise of such jurisdiction.
Article 226 in The Constitution Of India 1949
226. Power of High Courts to issue certain writs
Article 372 in The Constitution Of India 1949
372. Continuance in force of existing laws and their adaptation
35. The jurisdiction conferred by this Act on the High Court of Admiralty may be exercised either by proceedings in rem or by proceedings in personam."
The Law relating to Admiralty jurisdiction is relevant even today under Article 372 of the Constitution of India.
Subject to the provisions of sections 4 and 5, the jurisdiction in respect of all maritime claims under this Act shall vest in the respective High Courts and be exercisable over the waters up to and including the territorial waters of their respective jurisdictions in accordance with the provisions contained in this Act:
Provided that the Central Government may, by notification, extend the jurisdiction of the High Court up to the limit as defined in section 2 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976).
Section 5. Arrest of vessel in rem:
(15) "High Court", in relation to a vessel, means the High Court within the limits of whose appellate jurisdiction:
Section 443 in The Merchant Shipping Act, 1958
443. Power to detain foreign ship that has occasioned damage:
444. Power to enforce detention of ship:
Analysis
Before we proceed with the analysis, let's see the facts of the case:
The appellant vessel, which was lying in the port of Marmagao, left the port without issuing bills of lading or other documents required by the Respondent company for the goods shipped by it. On reaching the port of destination, despite the direction of the respondent company not to deliver the goods by reason of the buyer's failure to pay the agreed price, the appellants handed over the goods to the consignee.
Since the appellants acted in breach of duty thereby committing conversion of the goods entrusted to them, the respondent instituted a suit against the appellants invoking the admiralty jurisdiction of the Andhra Pradesh High Court by means of an action in rem. The vessel was arrested when it entered the port of Vishakapatnam, and later released on the owner's furnishing security by way of Bank guarantee.
In the proceedings before the High Court, the appellant raised a preliminary objection as to jurisdiction stating that the suit against a foreign ship owned by a foreign company not having a place of residence or business in India, could not proceed on the admiralty side of the High Court by an action in rem in respect of a cause of action by reason of a tort or a breach of obligation arising from the carriage of goods from an Indian port to a foreign port.
This objection was overruled by a Single Judge of the High court and later confirmed by a Division Bench, against which the present appeal has been preferred. Finally the suit was decreed by a Single Judge and the appeal therefrom is the subject matter of the other matter before this Court, viz., the Transfer Petition.
On behalf of the appellants it was contended that the power of the High Court on the admiralty side was confined to the provisions of the Admiralty Court Act, 1861 made applicable to India by the Colonial Courts of Admiralty Act, 1890 read with the Colonial Courts of Admiralty (India) Act, 1891 declaring certain Courts of unlimited civil jurisdiction as Colonial Courts of Admiralty, but it remained frozen as on the date of Admiralty Court Act, 1861.
That the wide powers assumed by the British Courts under the subsequent statutes of that country did not enlarge the admiralty jurisdiction of the High Court in India; that section 6 of the Admiralty Court Act, 1861, the only provision relating to cargo, confined itself to inward cargo only, and therefore the case did not fall under the ambit of section 6 of the Act; and that the arrest of the vessel in purported exercise of admiralty jurisdiction in rem concerning a claim relating to outward cargo, was null and void.
We Shall Now Look At The Relevant And Crucial Legal Precedents Related To The Case At Hand:
In the case of Naresh 2 Shridhar Mirajkar v. State of Maharashtra [(1966) 3 SCR 744 : AIR 1967 SC 1, the following was held:
The High Courts in India are superior courts of record. They have original and appellate jurisdiction. They have inherent and plenary powers. Unless expressly or impliedly barred, and subject to the appellate or discretionary jurisdiction of this Court, the High Courts have unlimited jurisdiction, including the jurisdiction to determine their own powers.
In Schwarz & Co. (Grain) Ltd. v. St. Elefterio Ex Arion (Owners) [1957 Probate Division 179] , Willmer, J. considering the scope of prima facie case held at p. 185 that:
It has not been suggested that the proceedings are frivolous or vexatious, so as to call for the exercise of the court's inherent jurisdiction to halt such proceedings in limine.
The defendants' argument is founded on the proposition that Section 3(4) of the Act of 1956 introduced a new restriction on the right to proceed in rem and that a plaintiff cannot arrest a ship under that sub-section unless he can prove - and prove at the outset - that he has a cause of action sustainable in law. In my judgment that proposition rests upon a misconception of the purpose and meaning of Section 3(4).
It was held that the scope of the Act was to enlarge the jurisdiction of the admiralty court but not to restrict its jurisdiction. At p. 187 it was held that
"it is possible (these things have been known to happen) that a higher court might take a different view; but in the meantime the ship, which is a foreign ship, has been freed from arrest, has gone, and may never return to this country. It might be that in those circumstances the plaintiffs would have lost their right forever to entertain proceedings in rem in this country. The remedy for the defendants to release their ship is to be put in appeal. The action will then be tried at the appropriate time. When all the facts have been ascertained due consideration will be given to the arguments at law which the defendants desire to advance."
Accordingly the motion for release of the ship was dismissed.
In Epoch 3 Enterrepots v. M.V. Won Fu, (2003) 1 SCC 305 : 2002 SCC OnLine SC 1021 at page 310
8. Without however going to the issue of privity of contract which has been one of the basic reasons for the learned Single Judge to come to the conclusion, be it noted that the suit has been framed for the arrest of the vessel M.V. Won Fu in the admiralty jurisdiction of the High Court at Madras. At this juncture however a brief historical perspective of the admiralty jurisdiction in the country may be adverted to.
The three erstwhile Presidency High Courts (in common and popular parlance Chartered High Courts), namely, Calcutta, Bombay and Madras were having the Letters Patent for the conferment of the ordinary original civil jurisdiction and by reason of the provisions contained therein read with the Admiralty Courts Act, 1861 and subsequent enactment of the Colonial Courts of Admiralty Act, 1890 and the Colonial Courts of Admiralty (India) Act.
9. The High Courts of these three Presidency Towns were conferred with the same jurisdiction as was vested in the High Court of England and the High Courts were declared to be otherwise competent to regulate their procedure and practice as would be deemed necessary corresponding to the Indian perspective in exercise of the admiralty jurisdiction by way of rules framed in that regard.
There is no manner of doubt that there existed or is existing any fetter in regard to the exercise of admiralty jurisdiction insofar as the three High Courts at Calcutta, Bombay and Madras are concerned.
In M.V. Al Quamar4 v. Tsavliris Salvage (International) Ltd., (2000) 8 SCC 278 : 2000 SCC OnLine SC 1189 at page 289, the following was held:
10. By and under the provisions of Colonial Courts of Admiralty Act, 1890 the High Courts of these three presidency towns were conferred with the same jurisdiction as was vested in the High Court of England and the High Courts were declared to be otherwise competent to regulate their procedure and practice as would be deemed necessary corresponding to the Indian perspective in exercise of the admiralty jurisdiction by way of Rules framed in that regard.
There is thus no manner of doubt that there existed or is existing any fetter in regard to the exercise of admiralty jurisdiction insofar as the three High Courts at Calcutta, Bombay and Madras are concerned.
11. The other introductory aspect pertains to the conferment of admiralty jurisdiction onto the Andhra Pradesh High Court. In terms of provisions of the Andhra State Act of 1953 (Act 30 of 1953) certain territories from erstwhile State of Madras were included in the State of Andhra Pradesh and the Court at Andhra Pradesh was redesignated as the High Court of Andhra Pradesh when the State was so named under the States Reorganisation Act, 1956.
The Andhra Pradesh High Court "being the successor" of the High Court of Madras (presently Tamil Nadu) has thus the similar jurisdiction as was so vested in the Madras High Court prior to the transfer. Needless to say that since Visakhapatnam is also included in the State of Andhra Pradesh, the port of Visakhapatnam falls within the admiralty jurisdiction of the High Court of Andhra Pradesh.
It is in this context observations of this Court in M.V. Elisabeth v. Harwan Investment and Trading (P) Ltd. [1993 Supp (2) SCC 433 : AIR 1993 SC 1014] seem to be of some assistance. This Court in para 26 of the Report observed: (SCC p. 452)
26. Assuming that the admiralty powers of the High Courts in India are limited to what had been derived from the Colonial Courts of Admiralty Act, 1890, that Act, having equated certain Indian High Courts to the High Court of England in regard to admiralty jurisdiction, must be considered to have conferred on the former all such powers which the latter enjoyed in 1890 and thereafter during the period preceding the Indian Independence Act, 1947.
What the Act of 1890 did was, as stated earlier, not to incorporate any English statute into Indian law, but to equate the admiralty jurisdiction of the Indian High Courts over places, persons, matters and things to that of the English High Court.
As the admiralty jurisdiction of the English High Courts expanded with the progress of legislation, and with the repeal of the earlier statutes, including in substance the Admiralty Court Acts of 1840 and 1861, it would have been reasonable and rational to attribute to the Indian High Courts a corresponding growth and expansion of admiralty jurisdiction during the pre-independence era. But a restrictive view was taken on the question in the decisions of the High Courts cited above.
12. There is thus no scope to conclude that the admiralty jurisdiction of the Andhra Pradesh High Court stands frozen or atrophied in any way whatsoever.
Now, let us analyse the case:
Therefore, taking into account all the precedents, facts, circumstances, and reasoning, we can easily say that yes, in accordance with the applicable laws and legal principles, Indian High Courts do have admiralty jurisdiction against a foreign ship, owned by a foreign company, and not having a place of residence or business in India, giving them the authority to detain them once they enter Indian waters for the purpose of a legal proceeding.
This is because it is evident from the aforementioned precedents that the provisions of the Colonial Courts of Admiralty Act, 1890 gave the High Courts of the three presidency towns the same jurisdiction as the High Court of England and declared the High Courts to have additional authority to regulate their procedure and practise as would be deemed necessary in light of the Indian perspective in the exercise of the admiralty jurisdiction by way of rules framing. Therefore, there is no question that any restrictions on the exercise of admiralty jurisdiction in relation to the three High Courts at Calcutta, Bombay, and Madras existed or still exist.
In accordance with the terms of the Andhra State Act of 1953 (Act 30 of 1953), certain areas from the former State of Madras were also incorporated into the State of Andhra Pradesh, and the court in Andhra Pradesh was renamed the High Court of Andhra Pradesh when the State was given that name under the States Reorganization Act of 1956. The Andhra Pradesh High Court has the same power that the Madras High Court did when it was transferred as "the successor" of the High Court of Madras (now Tamil Nadu).
Because of this, the appellants' contention that the AP High Court's authority on the admiralty side was restricted to the provisions of the Admiralty Court Act, 1861, made applicable to India by the Colonial Courts of Admiralty Act, 1890, read in tandem with the Colonial Courts of Admiralty (India) Act, 1891.
Despite the fact that it was frozen as of the date of the Admiralty Court Act, 1861, that the broad powers assumed by the British courts under that country's subsequent statutes did not extend the Indian High Court's jurisdiction over the Admiralty; Given that it only applied to incoming cargo.
Section 6 of his Admiralty Court Act of 1861, which dealt with cargo, did not apply to this case. and that the detention of the vessel in the alleged exercise of in rem admiralty jurisdiction over a claim involving outward cargo was invalid and lacking in legal standing, failing to accomplish its intended goal.
Conclusion
In conclusion, I can say that taking into account all the precedents, facts, circumstances and rationale, I can easily say that yes, according to the relevant laws and legal principles, Indian High Courts do have admiralty jurisdiction against a foreign ship, owned by a foreign company and not having a place of residence or business in India, thereby giving them power to arrest them once they enter into Indian waters for the purposes of a legal proceeding.
Bibliography
Written By Mohammed Arafat Mujib Khan
Also Read:
Whether, according to the relevant laws and legal principles, do Indian High Courts(in this case, specifically the Andhra Pradesh High Court) have admiralty jurisdiction against a foreign ship, owned by a foreign company and not having a place of residence or business in India, thereby giving them power to arrest them once they enter into Indian waters for the purposes of a legal proceeding?
M.V. Elisabeth v. Harwan Investment and Trading (P) Ltd., 1993 Supp (2) SCC 433
Rule
Action In Rem:
An action in rem is one that is taken against a thing, a good, or specific property (such as a ship or cargo) as opposed to an individual. The res may be seized by the court and sold to pay for a judgement in rem against it. By suing against a res, a plaintiff receives security for his claim. As long as the property being sued over (the res) is within the jurisdiction, an action may be brought in rem.The High Court of Admiralty may exercise the competence granted to it by this Act through either in rem or in personam proceedings.
An action in personam is an ordinary action as in common law courts.
The nature of actions in rem and acts in personam are described as follows in Halsbury's Laws of England, paragraph 310:
"Nature of actions in rem and actions in personam." - An action in rem is a lawsuit brought against a ship directly, however it has recently been contested that the owners of the ship cannot be held personally liable if they do not present in court to defend their assets.
It has been stated that if the defendant enters an appearance, an action in rem transforms into, or continues as, an action in personam; however, the High Court's Admiralty jurisdiction may now be invoked by an action in personam in all circumstances, subject to some limitations in collision and similar cases, unless the defendant submits to or agrees to submit to the Court's jurisdiction.
The foundation of an action in rem is the lien resulting from the personal liability of the owner of the res. Therefore, it is not possible to bring an action in rem to collect damages for harm done to a ship by the defendant's ship's master's malicious act or for harm done when the ship was in the control of a third party due to a compelled requisition. On the other hand, it has been successful to take legal action against ships that were authorised by their owners to be in the custody and control of charterers in order to enforce liens that developed while the ships were under their control.
As in other proceedings in the High Court, the defendant in an Admiralty action in personam is responsible for the full amount of the plaintiff's proven claim. A defendant who shows up in an action in rem is also now accountable for the whole judgement, even if it exceeds the value of the res or the bail set. However, the defendant's claim to the benefit of statutory liability-limitation clauses may have an impact on the right to collect damages.
An action in rem is one that is taken against a thing, a good, or specific property (such as a ship or cargo) as opposed to an individual. The res may be seized by the court and sold to pay for a judgement in rem against it. By suing against a res, a plaintiff receives security for his claim. As long as the property being sued over (the res) is within the jurisdiction, an action may be brought in rem.
Section 35 of the Admiralty Courts Act, 1861, 24 Vict. c.10 reads:
"The jurisdiction conferred by this Act on the High Court of Admiralty may be exercised either by proceedings in rem or by proceedings in personam." [Jurisdiction of the Court]'
India did not sign and consequently did not ratify or promulgate either the International Convention Relating to the Arrest of Seagoing Ships, signed at Brussels on 10 May 1952 and at Geneva on 12 March 1999 but the principles were adopted by Supreme Court of India judgements in M.V. Elisabeth And Ors vs Harwan Investment And Trading ... on 26 February, 1992 and in Liverpool & London S.P. & I Asson. ... vs M.V. Sea Success1 I & Anr on 20 November, 2003 matters as part of the common law of India and applicable for the enforcement of maritime claims against foreign ships.
International Convention Relating To The Arrest Of Sea-Going Ships:
Article 1
In this Convention the following words shall have the meanings hereby assigned to them:
- Maritime Claim means a claim arising out of one or more of the
following:
- Agreement relating to the use or hire of any ship whether by charterparty or otherwise
- Agreement relating to the carriage of goods in any ship whether by charterparty or otherwise;
Article 2
"A ship flying the flag of one of the Contracting States may be arrested in the jurisdiction of any of the Contracting States in respect of any maritime claim, but in respect of no other claim; but nothing in this Convention shall be deemed to extend or restrict any right or powers vested in any governments or their departments, public authorities, or dock or habour authorities under their existing domestic laws or regulations to arrest, detain or otherwise prevent the sailing of vessels within their jurisdiction".Article 4
A ship may only be arrested under the authority of a Court or of the appropriate judicial authority of the contracting State in which the arrest is made.Article 7
- The Courts of the country in which the arrest was made shall have
jurisdiction to determine the case upon its merits if the domestic law of
the country in which the arrest is made gives jurisdiction to such Courts,
or in any of the following cases namely:
- if the claimant has his habitual residence or principal place of business in the country in which the arrest was made;
- if the claim arose in the country in which the arrest was made;
- if the claim concerns the voyage of the ship during which the arrest was made;
- if the claim arose out of a collision or in circumstances covered by article 13 of the International Convention for the unification of certain rules of law with respect to collisions between vessels, signed at Brussels on 23rd September 1910;
- if the claim is for salvage;
- if the claim is upon a mortgage or hypothecation of the ship arrested.
- If the Court within whose jurisdiction the ship was arrested has not
jurisdiction to decide upon the merits, the bail or other security given in
accordance with article 5 to procure the release of the ship shall
specifically provide that it is given as security for the satisfaction of
any judgment which may eventually be pronounced by a Court having
jurisdiction so to decide; and the Court or other appropriate judicial
authority of the country in which the claimant shall bring an action before
a Court having such jurisdiction.
- If the parties have agreed to submit the dispute to the jurisdiction of
a particular Court other than that within whose jurisdiction the arrest was
made or to arbitration, the Court or other appropriate judicial authority
within whose jurisdiction the arrest was made may fix the time within which
the claimant shall bring proceedings.
- If, in any of the cases mentioned in the two preceding paragraphs, the
action or proceeding is not brought within the time so fixed, the defendant
may apply for the release of the ship or of the bail or other security.
- This article shall not apply in cases covered by the provisions of the revised Rhine Navigation Convention of 17 October 1868.
Indian Constitution
Article 215 in The Constitution Of India 1949215. High Courts to be courts of record Every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself.
Article 225 in The Constitution Of India 1949
225. Jurisdiction of existing High Courts Subject to the provisions of this Constitution and to the provisions of any law of the appropriate Legislature made by virtue of powers conferred on that Legislature by this Constitution, the jurisdiction of, and the law administered in, any existing High Court, and the respective powers of the Judges thereof in relation to the administration of justice in the Court, including any power to make rules of Court and to regulate the sittings of the Court and of members thereof sitting alone or in Division Courts, shall be the same as immediately before the commencement of this Constitution:
Provided that any restriction to which the exercise of original jurisdiction by any of the High Courts with respect to any matter concerning the revenue or concerning any act ordered or done in the collection thereof was subject immediately before the commencement of this Constitution shall no longer apply to the exercise of such jurisdiction.
Article 226 in The Constitution Of India 1949
226. Power of High Courts to issue certain writs
- Notwithstanding anything in Article 32 every High Court shall have
powers, throughout the territories in relation to which it exercise
jurisdiction, to issue to any person or authority, including in appropriate
cases, any Government, within those territories directions, orders or writs,
including writs in the nature of habeas corpus, mandamus, prohibitions, quo warranto
and certiorari, or any of them, for the enforcement of any of the rights
conferred by Part III and for any other purpose.
- The power conferred by clause ( 1 ) to issue directions, orders or writs
to any Government, authority or person may also be exercised by any High
Court exercising jurisdiction in relation to the territories within which
the cause of action, wholly or in part, arises for the exercise of such
power, notwithstanding that the seat of such Government or authority or the
residence of such person is not within those territories.
- Where any party against whom an interim order, whether by way of
injunction or stay or in any other manner, is made on, or in any proceedings
relating to, a petition under clause (1), without.
- Furnishing to such party copies of such petition and all documents in
support of the plea for such interim order; and
- Giving such party an opportunity of being heard, makes an application to
the High Court for the vacation of such order and furnishes a copy of such
application to the party in whose favour such order has been made or the
counsel of such party, the High Court shall dispose of the application
within a period of two weeks from the date on which it is received or from
the date on which the copy of such application is so furnished, whichever is
later, or where the High Court is closed on the last day of that period,
before the expiry of the next day afterwards on which the High Court is
open; and if the application is not so disposed of, the interim order shall,
on the expiry of that period, or, as the case may be, the expiry of the aid
next day, stand vacated.
- Furnishing to such party copies of such petition and all documents in
support of the plea for such interim order; and
- The power conferred on a High Court by this article shall not be in derogation of the power conferred on the Supreme court by clause ( 2 ) of Article 32
Article 372 in The Constitution Of India 1949
372. Continuance in force of existing laws and their adaptation
- Notwithstanding the repeal by this Constitution of the enactments
referred to in Article 395 but subject to the other provisions of this
Constitution, all the laws in force in the territory of India immediately
before the commencement of this Constitution, all the laws in force in the
territory of India immediately before the commencement of this Constitution
shall continue in force therein until altered or repealed or amended by a
competent Legislature or other competent authority.
- For the purpose of bringing the provisions of any law in force in the
territory of India into accord with the provisions of this Constitution, the
President may by order make such adaptations and modifications of such law,
whether by way of repeal or amendment, as may be necessary or expedient, and
provide that the law shall, as from such date as may be specified in the
order, have effect subject to the adaptations and modifications so made, and
any such adaptation or modification shall not be questioned in any court of
law.
- Nothing in clause ( 2 ) shall be deemed:
- To empower the President to make any adaptation or modification of any law
after the expiration of three years from the commencement of this
Constitution; or
- To prevent any competent Legislature or other competent authority from
repealing or amending any law adapted or modified by the President under the
said clause:
Explanation I:
The expression law in force in this article shall include a law passed or made by a legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that it or parts of it may not be then in operation either at all or in particular areas
Explanation II:
Any law passed or made by a legislature or other competent authority in the territory of India which immediately before the commencement of this Constitution had extra territorial effect as well as effect in the territory of India shall, subject to any such adaptations and modifications as aforesaid, continue to have such extra territorial effect.
Explanation III:
Nothing in this article shall be construed as continuing any temporary law in force beyond the date fixed for its expiration or the date on which it would have expired if this Constitution had not come into force.
Explanation IV:
An Ordinance promulgated by the Governor of a Province under Section 88 of the Government of India Act, 1935 , and in force immediately before the commencement of this Constitution shall, unless withdrawn by the Governor of the corresponding State earlier, cease to operate at the expiration of six weeks from the first meeting after such commencement of the Legislative Assembly of that State functioning under clause ( 1 ) of Article 382, and nothing in this article shall be construed as continuing any such Ordinance in force beyond the said period.
- To empower the President to make any adaptation or modification of any law
after the expiration of three years from the commencement of this
Constitution; or
35. The jurisdiction conferred by this Act on the High Court of Admiralty may be exercised either by proceedings in rem or by proceedings in personam."
The Law relating to Admiralty jurisdiction is relevant even today under Article 372 of the Constitution of India.
The Admiralty (Jurisdiction And Settlement Of Maritime Claims) Act, 2017
Section 3. Admiralty jurisdiction.Subject to the provisions of sections 4 and 5, the jurisdiction in respect of all maritime claims under this Act shall vest in the respective High Courts and be exercisable over the waters up to and including the territorial waters of their respective jurisdictions in accordance with the provisions contained in this Act:
Provided that the Central Government may, by notification, extend the jurisdiction of the High Court up to the limit as defined in section 2 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976).
Section 5. Arrest of vessel in rem:
- The High Court may order arrest of any vessel which is within its
jurisdiction for the purpose of providing security against a maritime claim
which is the subject of an admiralty proceeding, where the court has reason
to believe that:
- The person who owned the vessel at the time when the maritime claim arose is liable for the claim and is the owner of the vessel when the arrest is effected; or
- The demise charterer of the vessel at the time when the maritime claim arose is liable for the claim and is the demise charterer or the owner of the vessel when the arrest is effected; or
- The claim is based on a mortgage or a charge of the similar nature on the vessel; or
- The claim relates to the ownership or possession of the vessel; or
- The claim is against the owner, demise charterer, manager or operator of
the vessel and is secured by a maritime lien as provided in section 9.
- The High Court may also order arrest of any other vessel for the purpose
of providing security against a maritime claim, in lieu of the vessel
against which a maritime claim has been made under this Act, subject to the
provisions of sub-section (1):
Provided that no vessel shall be arrested under this sub-section in respect of a maritime claim under clause (a) of sub-section (1) of section 4.
The Merchant Shipping Act, 1958
Section 3(15) in The Merchant Shipping Act, 1958(15) "High Court", in relation to a vessel, means the High Court within the limits of whose appellate jurisdiction:
- The port of registry of the vessel is situate; or
- The vessel is for the time being; or
- The cause of action wholly or in part arises;
Section 443 in The Merchant Shipping Act, 1958
443. Power to detain foreign ship that has occasioned damage:
- Whenever any damage has in any part of the world been caused to property
belonging to the Government or to any citizen of India or a company by a
ship other than an Indian ship and at any time thereafter that ship is found
within Indian jurisdiction, the High Court may, upon the application of any
person who alleges that the damage was caused by the misconduct or want of
skill of the master or any member of the crew of the ship, issue an order
directed to any proper officer or other officer named in the order requiring
him to detain the ship until such time as the owner, master or consignee
thereof has satisfied any claim in respect of the damage or has given
security to the satisfaction of the High Court to pay all costs and damages
that may be awarded in any legal proceedings that may be instituted in
respect of the damage, and any officer to whom the order is directed shall
detain the ship accordingly.
- Whenever it appears that before an application can be made under this
section, the ship in respect of which the application is to be made will
have departed from India or the territorial waters of India, any proper
officer may detain the ship for such time as to allow the application to be
made and the result thereof to be communicated to the officer detaining the
ship, and that officer shall not be liable for any costs or damages in
respect of the detention unless the same is proved to have been made without
reasonable grounds.
- In any legal proceedings in relation to any such damage aforesaid, the person giving security shall be made a defendant and shall for the purpose of such proceeding be deemed to be the owner of the ship that has occasioned the damage.
444. Power to enforce detention of ship:
- Where under this Act a ship is authorised or ordered to be detained, any commissioned officer of the Indian Navy or any port officer, pilot, harbour master. Conservator of Port or Customs Collector may detain the ship.
- If any ship after detention, or after service on the master of any notice of, or order for, such detention proceeds to sea before she is released by competent authority, the master of the ship shall be guilty of an offence under this sub-section.
- When a ship so proceeding to sea takes to sea, when on board thereof in the execution of his duty any person authorised under this Act to detain or survey the ship, the owner, master or agent of such ship shall each be liable to pay all expenses of, and incidental to, such person being so taken to sea and shall also be guilty of an offence under this sub-section.
- When any owner, or master or agent is convicted of an offence under sub-section (3), the convicting Magistrate may inquire into and determine the amount payable on account of expenses by such owner, master or agent under that sub-section and may direct that the same shall be recovered from him in the manner provided for the recovery of fines.
Analysis
Before we proceed with the analysis, let's see the facts of the case:
The appellant vessel, which was lying in the port of Marmagao, left the port without issuing bills of lading or other documents required by the Respondent company for the goods shipped by it. On reaching the port of destination, despite the direction of the respondent company not to deliver the goods by reason of the buyer's failure to pay the agreed price, the appellants handed over the goods to the consignee.
Since the appellants acted in breach of duty thereby committing conversion of the goods entrusted to them, the respondent instituted a suit against the appellants invoking the admiralty jurisdiction of the Andhra Pradesh High Court by means of an action in rem. The vessel was arrested when it entered the port of Vishakapatnam, and later released on the owner's furnishing security by way of Bank guarantee.
In the proceedings before the High Court, the appellant raised a preliminary objection as to jurisdiction stating that the suit against a foreign ship owned by a foreign company not having a place of residence or business in India, could not proceed on the admiralty side of the High Court by an action in rem in respect of a cause of action by reason of a tort or a breach of obligation arising from the carriage of goods from an Indian port to a foreign port.
This objection was overruled by a Single Judge of the High court and later confirmed by a Division Bench, against which the present appeal has been preferred. Finally the suit was decreed by a Single Judge and the appeal therefrom is the subject matter of the other matter before this Court, viz., the Transfer Petition.
On behalf of the appellants it was contended that the power of the High Court on the admiralty side was confined to the provisions of the Admiralty Court Act, 1861 made applicable to India by the Colonial Courts of Admiralty Act, 1890 read with the Colonial Courts of Admiralty (India) Act, 1891 declaring certain Courts of unlimited civil jurisdiction as Colonial Courts of Admiralty, but it remained frozen as on the date of Admiralty Court Act, 1861.
That the wide powers assumed by the British Courts under the subsequent statutes of that country did not enlarge the admiralty jurisdiction of the High Court in India; that section 6 of the Admiralty Court Act, 1861, the only provision relating to cargo, confined itself to inward cargo only, and therefore the case did not fall under the ambit of section 6 of the Act; and that the arrest of the vessel in purported exercise of admiralty jurisdiction in rem concerning a claim relating to outward cargo, was null and void.
We Shall Now Look At The Relevant And Crucial Legal Precedents Related To The Case At Hand:
In the case of Naresh 2 Shridhar Mirajkar v. State of Maharashtra [(1966) 3 SCR 744 : AIR 1967 SC 1, the following was held:
The High Courts in India are superior courts of record. They have original and appellate jurisdiction. They have inherent and plenary powers. Unless expressly or impliedly barred, and subject to the appellate or discretionary jurisdiction of this Court, the High Courts have unlimited jurisdiction, including the jurisdiction to determine their own powers.
In Schwarz & Co. (Grain) Ltd. v. St. Elefterio Ex Arion (Owners) [1957 Probate Division 179] , Willmer, J. considering the scope of prima facie case held at p. 185 that:
It has not been suggested that the proceedings are frivolous or vexatious, so as to call for the exercise of the court's inherent jurisdiction to halt such proceedings in limine.
The defendants' argument is founded on the proposition that Section 3(4) of the Act of 1956 introduced a new restriction on the right to proceed in rem and that a plaintiff cannot arrest a ship under that sub-section unless he can prove - and prove at the outset - that he has a cause of action sustainable in law. In my judgment that proposition rests upon a misconception of the purpose and meaning of Section 3(4).
It was held that the scope of the Act was to enlarge the jurisdiction of the admiralty court but not to restrict its jurisdiction. At p. 187 it was held that
"it is possible (these things have been known to happen) that a higher court might take a different view; but in the meantime the ship, which is a foreign ship, has been freed from arrest, has gone, and may never return to this country. It might be that in those circumstances the plaintiffs would have lost their right forever to entertain proceedings in rem in this country. The remedy for the defendants to release their ship is to be put in appeal. The action will then be tried at the appropriate time. When all the facts have been ascertained due consideration will be given to the arguments at law which the defendants desire to advance."
Accordingly the motion for release of the ship was dismissed.
In Epoch 3 Enterrepots v. M.V. Won Fu, (2003) 1 SCC 305 : 2002 SCC OnLine SC 1021 at page 310
8. Without however going to the issue of privity of contract which has been one of the basic reasons for the learned Single Judge to come to the conclusion, be it noted that the suit has been framed for the arrest of the vessel M.V. Won Fu in the admiralty jurisdiction of the High Court at Madras. At this juncture however a brief historical perspective of the admiralty jurisdiction in the country may be adverted to.
The three erstwhile Presidency High Courts (in common and popular parlance Chartered High Courts), namely, Calcutta, Bombay and Madras were having the Letters Patent for the conferment of the ordinary original civil jurisdiction and by reason of the provisions contained therein read with the Admiralty Courts Act, 1861 and subsequent enactment of the Colonial Courts of Admiralty Act, 1890 and the Colonial Courts of Admiralty (India) Act.
9. The High Courts of these three Presidency Towns were conferred with the same jurisdiction as was vested in the High Court of England and the High Courts were declared to be otherwise competent to regulate their procedure and practice as would be deemed necessary corresponding to the Indian perspective in exercise of the admiralty jurisdiction by way of rules framed in that regard.
There is no manner of doubt that there existed or is existing any fetter in regard to the exercise of admiralty jurisdiction insofar as the three High Courts at Calcutta, Bombay and Madras are concerned.
In M.V. Al Quamar4 v. Tsavliris Salvage (International) Ltd., (2000) 8 SCC 278 : 2000 SCC OnLine SC 1189 at page 289, the following was held:
10. By and under the provisions of Colonial Courts of Admiralty Act, 1890 the High Courts of these three presidency towns were conferred with the same jurisdiction as was vested in the High Court of England and the High Courts were declared to be otherwise competent to regulate their procedure and practice as would be deemed necessary corresponding to the Indian perspective in exercise of the admiralty jurisdiction by way of Rules framed in that regard.
There is thus no manner of doubt that there existed or is existing any fetter in regard to the exercise of admiralty jurisdiction insofar as the three High Courts at Calcutta, Bombay and Madras are concerned.
11. The other introductory aspect pertains to the conferment of admiralty jurisdiction onto the Andhra Pradesh High Court. In terms of provisions of the Andhra State Act of 1953 (Act 30 of 1953) certain territories from erstwhile State of Madras were included in the State of Andhra Pradesh and the Court at Andhra Pradesh was redesignated as the High Court of Andhra Pradesh when the State was so named under the States Reorganisation Act, 1956.
The Andhra Pradesh High Court "being the successor" of the High Court of Madras (presently Tamil Nadu) has thus the similar jurisdiction as was so vested in the Madras High Court prior to the transfer. Needless to say that since Visakhapatnam is also included in the State of Andhra Pradesh, the port of Visakhapatnam falls within the admiralty jurisdiction of the High Court of Andhra Pradesh.
It is in this context observations of this Court in M.V. Elisabeth v. Harwan Investment and Trading (P) Ltd. [1993 Supp (2) SCC 433 : AIR 1993 SC 1014] seem to be of some assistance. This Court in para 26 of the Report observed: (SCC p. 452)
26. Assuming that the admiralty powers of the High Courts in India are limited to what had been derived from the Colonial Courts of Admiralty Act, 1890, that Act, having equated certain Indian High Courts to the High Court of England in regard to admiralty jurisdiction, must be considered to have conferred on the former all such powers which the latter enjoyed in 1890 and thereafter during the period preceding the Indian Independence Act, 1947.
What the Act of 1890 did was, as stated earlier, not to incorporate any English statute into Indian law, but to equate the admiralty jurisdiction of the Indian High Courts over places, persons, matters and things to that of the English High Court.
As the admiralty jurisdiction of the English High Courts expanded with the progress of legislation, and with the repeal of the earlier statutes, including in substance the Admiralty Court Acts of 1840 and 1861, it would have been reasonable and rational to attribute to the Indian High Courts a corresponding growth and expansion of admiralty jurisdiction during the pre-independence era. But a restrictive view was taken on the question in the decisions of the High Courts cited above.
12. There is thus no scope to conclude that the admiralty jurisdiction of the Andhra Pradesh High Court stands frozen or atrophied in any way whatsoever.
Now, let us analyse the case:
Therefore, taking into account all the precedents, facts, circumstances, and reasoning, we can easily say that yes, in accordance with the applicable laws and legal principles, Indian High Courts do have admiralty jurisdiction against a foreign ship, owned by a foreign company, and not having a place of residence or business in India, giving them the authority to detain them once they enter Indian waters for the purpose of a legal proceeding.
This is because it is evident from the aforementioned precedents that the provisions of the Colonial Courts of Admiralty Act, 1890 gave the High Courts of the three presidency towns the same jurisdiction as the High Court of England and declared the High Courts to have additional authority to regulate their procedure and practise as would be deemed necessary in light of the Indian perspective in the exercise of the admiralty jurisdiction by way of rules framing. Therefore, there is no question that any restrictions on the exercise of admiralty jurisdiction in relation to the three High Courts at Calcutta, Bombay, and Madras existed or still exist.
In accordance with the terms of the Andhra State Act of 1953 (Act 30 of 1953), certain areas from the former State of Madras were also incorporated into the State of Andhra Pradesh, and the court in Andhra Pradesh was renamed the High Court of Andhra Pradesh when the State was given that name under the States Reorganization Act of 1956. The Andhra Pradesh High Court has the same power that the Madras High Court did when it was transferred as "the successor" of the High Court of Madras (now Tamil Nadu).
Because of this, the appellants' contention that the AP High Court's authority on the admiralty side was restricted to the provisions of the Admiralty Court Act, 1861, made applicable to India by the Colonial Courts of Admiralty Act, 1890, read in tandem with the Colonial Courts of Admiralty (India) Act, 1891.
Despite the fact that it was frozen as of the date of the Admiralty Court Act, 1861, that the broad powers assumed by the British courts under that country's subsequent statutes did not extend the Indian High Court's jurisdiction over the Admiralty; Given that it only applied to incoming cargo.
Section 6 of his Admiralty Court Act of 1861, which dealt with cargo, did not apply to this case. and that the detention of the vessel in the alleged exercise of in rem admiralty jurisdiction over a claim involving outward cargo was invalid and lacking in legal standing, failing to accomplish its intended goal.
Conclusion
In conclusion, I can say that taking into account all the precedents, facts, circumstances and rationale, I can easily say that yes, according to the relevant laws and legal principles, Indian High Courts do have admiralty jurisdiction against a foreign ship, owned by a foreign company and not having a place of residence or business in India, thereby giving them power to arrest them once they enter into Indian waters for the purposes of a legal proceeding.
Bibliography
- http://admiraltypractice.com/chapters/36.htm
- https://indiankanoon.org/doc/1643138/
- https://indiankanoon.org/doc/1911675/
- https://indiankanoon.org/doc/1762940/
Written By Mohammed Arafat Mujib Khan
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