Angsley Investments Limited v. Jupiter Denizcilik Tasimacilik Mumessillik San. Ve Ticaret Limited Sirketi

By Anish Sinha

The Bombay High Court, in the case of Angsley Investments Limited v. Jupiter Denizcilik Tasimacilik Mumessillik San. Ve Ticaret Limited Sirketi, while dealing with the confinement of a vessel (assertedly a sister vessel of m.v LIMA 1 (DEF. 10)) discussed several questions of maritime law.

Facts

This case was appealed from a judgment of a Single Judge dated 8 November 2006 in favor of Jupiter Denizcilik Tasimacilik Mumessillik San Ve Ticaret Ltd Sirketi (Jupiter) for USD 100,798.

Jupiter was a Turkish bunker supplier to vessels. According to Jupiter, it had supplied bunkers to the MV Lima II on the basis of orders placed by its owners, Lima Denizcilik Ve Ticaret Ltd Sirketi (Lima), but its invoice was not fully paid and according to the company, an amount of US$100,798 was remaining to be paid. Jupiter resultantly filed Admiralty Suit No 15 of 2001 to arrest the MV Lima II when it was halted at the Port of Kandla. In response to the suit, the court released the order of arrest on 17 May 2001 and was duly served to the Port and Customs Authorities, but the order was not served to MV Lima II because before the warrant of arrest could be served, MV Lima II it was out to sail. So, the ship jumped the order of arrest and escaped from the Port of Kandla.

Subsequently, Jupiter got the information that the vessel m.v. LIMA-I which according to the plaintiff (Jupiter) was owned by defendant No. 2 was at Port Calcutta. Jupiter thereafter, moved an application to restrain MV Lima I (allegedly a sister vessel of MV Lima II) from leaving the Port of Calcutta. By an ad-interim order dated 14th August 2001 m.v. LIMA I was restrained from leaving the port of Calcutta. The notice of motion was finally disposed of by an order dated 31st October 2001 confirming the ad-interim order. The Court clarified that on furnishing of security to the satisfaction of the Prothonotary and Senior Master, the said interim order shall cease to operate.

The appellant mentioned the case that it was an interested party because it had purchased the vessel from Mercury Shipholding Inc. (Mercury) of London which had purchased the vessel from defendant no.2. It had thereafter, sold the vessel to one Jain Udyog for demolition and Jain Udyog had asked appellant to have the vessel m.v. LIMA I was released from various legal proceedings.

In accordance with the same, an ad-interim order of injunction was passed by the Bombay HC restraining MV Lima I from sailing out of the Port of Calcutta. This order was later confirmed by an order passed by the Bombay High Court. Subsequently, Angsley Investments Limited (“Angsley”) furnished security for the release of MV Lima I. Angsley was thereafter permitted to join as a party Defendant to the Suit. It claimed that it had purchased MV Lima I from Mercury and had in turn sold her to Jain Udyog. Angsley thus claimed that MV Lima I and MV Lima II were not sister vessels since the MV Lima I was not owned by Lima Denizcilik at the time when the Suit was filed and when the order of injunction was passed by the Bombay HC. However, the Ld. A single Judge of the Bombay HC decreed the Suit in favor of Jupiter.

Issues Before the Bombay High Court

In total, there were 14 issues before the bench of the Bombay high court but the main contention was

1. Whether Jupiter confirm the fact that the present suit is maintainable against Lima Denizcilik?
2. Whether the plaintiffs prove that m.v. LIMA I was the sister ship of the 1st Defendant vessel at the time of the grant of the arrest of LIMA I on 31st October 2001?
3. Whether the plaintiffs prove that they are entitled to arrest another vessel (Respondent Vessel -m.v. Yim Kim ex Lima-1) in lieu of the 1st Defendant vessel?

Contentions of the Parties

The plaintiff has claimed that the first defendant vessel was flying with the flag of Turkey and that it is owned by the second defendant. Further submitted that the first and the second defendant had not filed their written statement denying this claim. According to plaintiff MV Lima, I was restrained by an order of injunction, and no claim in rem was sought against the said vessel. Therefore, the Ld. A single Judge could not have exercised admiralty jurisdiction to entertain the suit.

Mr. kamat, amicus curiae, submitted that the suit against defendant no.2 was not maintainable because an action in personam against defendant no.2 (foreign defendant) was not within the jurisdiction of the Court. Respondent (original plaintiff) had sought to make a claim in personam against original defendant no.2, where original defendant no.2 is a foreign party who neither resides nor carries on business within the jurisdiction of this Court. He also cited the case World Tanker Carrier Corporation V/s. S.N.P. Shipping Services Pvt. Ltd, where the court held that no action in personam can be maintained against a party which was not within the jurisdiction of the Court and which has not submitted itself to the jurisdiction of the Court.

Further contention was made that m.v. LIMA I was not made a party to the suit and the settled position in law is that a party cannot be added to the interim application without being a party to the suit and on this ground also, the appeal deserves to be allowed Movin F. D’Souza V/s. Vivian’s daughter of Wilfred Foncesca and wife of Ravi Shetty and Ors.

It was also noted that as per Section 5 of the Admiralty Act 2017, to proceed against a sister ship, such ship should be made a party to the Suit. As per Section 5(1) (to which Section 5(2) is subject), the vessel to be arrested must be subject to an admiralty proceeding. However, Lima I was not made a party to the Suit.

Decision & Findings

The Bombay high court observed that Lima, however, is a foreign party who neither resides nor carries on business within the jurisdiction of this Court, and as there is no record of Lima having voluntarily submitted to the jurisdiction of this Court and as Lima has chosen not to enter an appearance, the suit filed against Lima is not maintainable. A suit in personam qua a foreign defendant who is not within the jurisdiction of the Court and who has not voluntarily submitted itself to the jurisdiction is not maintainable.

Further on contention that the suit was filed as an action in rem against the MV Lima II, but as there is nothing on the record to show that when the suit was filed the vessel was within the admiralty jurisdiction of this Court. Finally concluded that there could be no action in rem in so far as the facts of the present case are concerned. At the highest, it would be an action in personam.

The court held as Lima has neither entered an appearance nor furnished security or submitted to the jurisdiction of this Court, the suit filed by Jupiter continues to be an action in rem against the MV Lima II and so on this ground, the suit is not maintainable against Lima.

Court also noted that it is trite law that an action in rem is converted into an action in personam if the owner of the vessel enters an appearance, furnishes security, and submits to the jurisdiction of this Court. Until then, the suit continues to be an action in rem against the vessel: see Siem Offshore Redri AS v Altus Uber and Owners and Parties Interested in the Vessel MV Polaris Galaxy v Banque Cantonale De Geneve.

Court further held that under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 (the Act) in order to proceed against a sister ship (assuming that the MV Lima I and the MV Lima II were sister ships at the time of arrest), the sister ship has to be made a party to the suit and has to be proceeded against in rem. This is evident from an analysis of section 5 of the Act. Though the Act only came into force on 1 April 2018, the purport of all these provisions was always followed (observed in Raj Shipping Agencies v Barge Madhwa). Section 5(1) of the Act contemplates that to order the arrest of a vessel for enforcement of a maritime claim, the vessel must be the subject of an admiralty proceeding. Therefore, to obtain the arrest of a sister ship, a plaintiff has to satisfy all the tests of s 5(1), which would include making the sister ship a party to the suit. As noted earlier, the MV Lima I was never made a party to the suit. An order of arrest was never made against that ship. The injunction cannot be equated to arrest.

Finally, Court concluded that whether or not MV Lima I and MV Lima II are sister’s vessels is of little or no relevance and allowed the appeal and directed that the security furnished by Angsley be returned.