SUNIL B. NAIK versus GEOWAVE COMMANDER

Citation: [2018] 5 S.C.R. 471 · Decided: 09-03-2018 · Supreme Court of India · Bench: JASTI CHELAMESWAR · Disposal: Dismissed

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Judgment (excerpt)

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SUNIL B. NAIK
v.
GEOWAVE COMMANDER
(Civil Appeal No. 2617 of 2018)
MARCH 09, 2018
[J. CHELAMESWAR AND SANJAY KISHAN KAUL, JJ.]
Admiralty laws/Maritime laws: Admiralty jurisdiction – Arrest
of vessel – Maritime claim against charterer of ship who is not dejure
owner of ship – Recovery of amount through a restraint order against
the ship owned by a third party – Maintainability of – On facts,
award of contract by ONGC to a foreign company for carrying
seismic survey operations off the coast of Gujarat – Foreign
company in turn entered into a Charter Party Agreement to charter
the vessel-respondent vessel – Charterer further entered into contract
with two appellants for assistance in survey operations to be
conducted by charterers seismic vessel – Invoices raised by
appellants on Charterers from time to time but payment not made –
Also non-payment of charter hire to owners of respondent vessel –
Admiralty suit by appellants wherein separate order of arrest of
vessel passed – Thereafter, on application by respondent, vacation
of ex parte stay by Single Judge of High Court – Upheld by the
Division Bench – On appeal, held: Maritime claim against the
charterer of a ship, who is not the de jure owner of the ship, cannot
be recovered through a restraint order against the ship owned by a
third party – Maritime claim is not maintainable for an action in
rem against the respondent vessel in respect of the dues of the
appellants when the charterer himself is in default of the payment
to the owner – Maritime claim is in respect of the vessels which are
owned by the appellants and the party liable in personam is charterer
– There could not be a detention of a ship as a security and
guarantee arising from its owner for a claim which is in respect of
a non-owner or a charterer of the ship – Amount deposited by the
owners of the respondent vessel, along with accrued interest thereon,
to be remitted back to the owner – International Convention on
Arrest of Ships, 1999.
[2018] 5 S.C.R. 471
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SUPREME COURT REPORTS
[2018] 5 S.C.R.
Dismissing the appeals, the Court
HELD: 1.1 The charter party is defined as a contract by
which an entire ship, or some principal part thereof, is let by the
owner to another person for a specified time or use. The Charter
can be of two kinds-(i) Charter of demise; and (ii) Contract of
affreightment. In the instant case, the concern is with the charter
of demise by which the whole vessel is let to the charterer with
the transfer to him of its entire command and possession and
consequent control over its navigation. Such a charter is called a
bareboat charter. A demised charterer, like RG, who is the owner
for services stipulated, assumes in large measures the customary
rights and liabilities of vessel owners in relation to third persons,
who have dealt with him or with the ship, illustratively, repairs
and supplies ordered for the vessel, wages of seamen, etc. [Para
14, 15] [484-H; 485-A-B; 486-G-H]
M.V. Elisabeth & Ors. v. Harwan Investment & Trading
Pvt. Ltd. [1992] 1 SCR 1003 : AIR 1993 SC 1014 –
referred to.
Commentary on “Bareboat Charters by Mark Davis 2nd
Edn – referred to.
1.2 The emphasis of the respondent is on the maritime claim
being maintained against the owner of the ship and detention of a
ship as a sequitur thereto as security for a decree liable to be
passed against the owners of the ship in personam. It was
submitted that since the claim is stated to be one against RG and
not against the owners, such a detention could not have been
made. RG in fact, has not even been made a party to the suit, the
entity, which would be liable in personam. [Para 22] [494-B-C]
Liverpool & London S.P. & I Association Limited v. M.V.
Sea Success I & Anr. [2003] 5 Suppl. SCR 851 : (2004)
9 SCC 512 – referred to.
1.3 In the interest of international comity, though India is
not a signatory to the Convention of 1999, the principles of the
same are utilized and applied to appropriate situations to
determine whether a ‘maritime claim’, as understood in the
international context has arisen and whether the same warrants
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the arrest of the vessel in question as per its provisions.
[Para 24] [495-B-C]
1.4 Article 1 of the Convention defines Maritime Claim.
Article 2 stipulates the powers of arrest and sub-clause (2)
clarifies that the ship may be arrested only respect a maritime
claim. Sub-clause (3) stipulates that

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