9911796707
TMI Blog1998 (4) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... s involved in a collision with a vessel m.v. YA Mawlaya international waters 200 nautical miles off the coast of Portugal. YA Mawlaya is a vessel registered in Cyprus. It is owned by M/S. Kara Mara Shipping Company Ltd. (hereinafter referred to as Kara Mara'), a company registered in Cyprus. The said company is referred to variously in these proceedings as disponent owner/charterer of ya Mawlaya to Vestman Shipping Company Ltd., a company registered in Cyprus. Kara Mara thereafter became bare boat charterers of Ya Mawlaya. Prior to the sale of the said vessel, kara mara had entered into a management agreement dated 11th of April , 1994 with SNP Shipping Services P. Ltd. (hereinafter referred to as 'SNP'), a company registered in India for the management of the vessel Ya Mawlaya. According to the appellant, on the sale of the said vessel, Kara Mara's agreement with SNP came to an end. On the other hand, it is claimed by SNP that under the said management agreement they were put in charge of recruiting crew and officers of the said vessel. SNP entered into a sub-contract with one Holbud Ship Management Company Ltd. for the commercial management of t he said vessel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sociation, (hereinafter referred to as 'New Castle'). Kara Mara thereafter filed an action for limitation of liability in the Supreme Court of Hong Kong against WTCC and all possible claimants. The court at Hong Kong has, however, stayed the writ in Hong Kong on the ground of Hong Kong being a forum non conveniens by an order dated 6th September, 1995. Kara Mara also made a conditional application for limitation of its liability before the District court at New Orleans. Kara Mara and all Ya Mawlaya interests have filed a common defence, inter alia, pleading that the court at new Orleans lacks ground of forum non conveniens. This issue is under examination there. During the pendency of all these proceedings, on 12th of May, 1995, SNP filed Admiralty Suit No. 26 of 1995 in the Bombay High Court. The suit which has been filed in the admiralty jurisdiction of the Bombay High Court is for limitation of SNP's liability in respect of the said collision. Prayers (a) to (e) in the Admiralty Suit No. 26 of 1995 pertain to setting up of a limitation fund and other connected reliefs. Prayer (f) is for an indemnity from Kara Mara, Vestman Shipping Company Ltd. and WTCC, in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rring to these proceedings in detail because of what has subsequently transpired on appeal before the Division Bench. On the question of the jurisdiction, the Single Judges held that the court has jurisdiction. From both these orders appeals were filed before a Division Bench of the Bombay High Court. The Division Bench, by its order dated 20/21st of August, 1997 in Appeal No. 556 of 1997, after considering the recalcitrant conduct of WTCC and the contempt committed by it, ultimately held that WTCC car be given one more chance to appear and defend the proceedings on condition that in future in complies with all the orders of the court. On the question of jurisdiction, the Division Bench by a Separate order of 21.8.1997 held that the court had jurisdiction to entertain and try the suits. Civil Appeal No. 8534 of 1997 filed before us by WTCC is against the order of 21.8.1997 holding that the Bombay High Court has Jurisdiction to entertain and try the suit. Civil Appeal No. 8535 of 1997 is from the order dated 20/21./.1997 in contempt proceedings. Kara Mara and SNP also filed motions to compel WTCC to deposit in India US $ 15 million said to be received by WTCC from New Castle in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of certain Rules relating to the limitation of liability of owners of sea-going vessels. This is commonly referred to as the Brussels Convention of 1924. In 1957 a new convention on Limitation of Liability of Sea Going Vessels was drafted to replace the Brussels Convention of 1924. The new convention, of 1957 was signed by many leading maritime nations of the world. It is also signed by India. The convention fixes the limit of liability of an owner of a sea-going vessel on the basis of the tonnage of the vessel without regard to the vessel's value. It is to incorporate this Convention in our statute law that Part XA was inserted in the Merchant Shipping Act, 1958. The right of an owner to bring a limitation action is governed by Part XA of the Merchant Shipping Act, 1958. The whole purpose of limitation of liability is to protect an owner against large claims, far exceeding the value of the ship and cargo, which can be made against him all over the world in case his ship meets with an accident causing damage to cargo, to another vessel or loss of personal life or personal injury. A limitation action, though it is normally filed in the admiralty jurisdiction of a court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate shall have the right to exclude, wholl, or partially from the benefits of this, convention any non-Contracting State, or any person who, at the time when he seeks to limit his liability or to secure the release of a ship or other property arrested or the bail or other security in accordance with the provisions of Article 5 hereof, is not ordinarily resident in a Contracting State, or does not have his principal palace of business in a contracting State or any ship in respect of which limitation of liability or release is sought which does not at the time specified above fix the flag of a contracting State. (underlining ours) Under principles of private International law, a court cannot entertain an action against a foreigner resident outside country or a foreigner not carrying on business within the Country, unless he submits to the jurisdiction of the court here. This principle applies to actions in personam. Regarding actions in rem, Cheshire and North in Private International Law, Twelfth Edition, explain the position with reference to admiralty actions. It is stated (p. 213): ... the only action in rem known to English law is that which lines in an Admiralty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n owners or their agents in a foreign country, are not deprived of rights by Court statutory enactment expressed in general terms unless it provides that a foreign ship entering an Indian port or territorial waters and thus coming within the territorial jurisdiction is to be covered ............. without anything more Indian statutes are ineffective against foreign property and foreigners outside the jurisdiction. It is this principle which is reflected in Section 2(2) of the Merchant Shipping Act, 1958. Section 2 of the Merchant shipping Act, 1958 deals with the application of the Act. It states that the provisions of the Merchant Shipping Act which apply to a vessel, will apply to those vessels which are specified in the section. Section 2 is as follows:- Section 2 : (1) Unless otherwise expressly provided, the provisions of this Act which apply to . (a) any vessel which is registered in India: or (b) any vessel which is required by this Act to be so registered; or (c) any other vessel which is owned wholly by persons to each of whom any of t he descriptions specified in clause (a) or in clause (b) or in Clause (c) as the case may be , of section 21 applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been reduced to a statutory from in part XA of the Merchant Shipping Act, 1958. Part XA was introduced in the Merchant Shipping Act, 1958 by Amending Act 25 of 1970, in order to give effect to the Brussels International Convention of 1957 relating to the limitation of liability of the owners of sea-going ships, to which India is a signatory. Part XA consists of Section 352, 352A to 352F. Under Section 352A the owner of a sea-going vessel may limit his liability in respect of any occurrence to his vessel resulting in loss of life of personal injury or loss of property or damage to cargo either in respect of persons or property carried on his vessel or on another vessel as also any liability in respect of damage to a vessel. The owner is entitled to limit his liability in respect of all such claims arising from one occurrence, in the manner provided in Section 352B provided that the occurrence giving rise to the claims did not result from the actual fault or privity of the owner. The burden of proving that the occurrence which has given rise to a claim against the owner of a vessel did not result from his actual fault or privity, shall be on the owner. Thus Section 352A(1) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall constitute a limitation Fund for the purposes of the claims referred to in sub-section (1) and shall be utilised only for the payment of such claims. (3) After the Fund has been constituted, no person entitle to claim against it shall be entitled to exercise any right against any other assets of the owner in respect of his claim against the Fund, if that Fund is actually available for benefit of the claimant. ....................... .................... Under Section 352F, for the purposes of Par XA, the provisions relating to limitation of liability of an owner of a vessel shall apply also to a charterer, manager and operator of the vessel and to the master, members of the crew and other servants of the owner, charterer, manager or operator acting in the course of their employment. Section 352F (1) is as follows:- Section 352F: (1) Subject to the provisions of sub-section (2), the provisions of this part relating to limitation of liability of an owner of a vessel in respect of claims arising out of an occurrence shall apply to the charterer, manager and operator of the vessel and to the master, member of the crew and other servants of the owner, charterer, mana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for SNP drew our attention to Clause 12 of the Letters Patent, Section 20(2) of the Civil Procedure Code and Section 3(15) of the Merchant Shipping Act and submitted that the Court within whose jurisdiction a part of the cause of action arises is a court having jurisdiction in a limitation action. As earlier stated, Section 3(15) has no application to a limitation action. Clause 12 of the Letters Patent also has no application because a limitation action is governed by Clause 32 of the Letters Patent and into Clause 12. For the same reason, Section 20 of the Civil Procedure Code will not govern the admiralty jurisdiction of a chartered High Court regulated by its Letters patent. A limitation action in admiralty jurisdiction cannot be filed in a court where a part of the cause or action arises when all claimants who are defendants to the action are foreigners who reside outside India, who do not carry on business in India and who have not submitted to the jurisdiction of any court in India, and have not filed a liability action here and are not likely to do so. Admiralty Suit no. 26 of 1995 is filed by SNP, a company registered in India, claiming to be the managers of the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case the collision which gave rise to the owner's liability has occurred on the high-seas off the coast of Portugal. Neither of the vessel involved in the collision is an Indian vessel. The owners of both these vessels are also foreigners. The charterers and sub-managers are also foreign companies. Only one out of several managers/sub-managers of Ya Mawlaya in and Indian Company. And the only act of management in Bombay is said to be the recruitment of the crew. For reasons already stated, this factor alone will not confer jurisdiction. Moreover, when the right to set up a limitation fund is a right which is common to all persons coming within the category of owner under Section 352F and a common limitation fund has to be set up, an act of management only by one of the owners when all the other owners are outside the jurisdiction of the Bombay High Court and all their acts are outside the jurisdiction of the Bombay High Court, will not be sufficient to confer jurisdiction. It is difficult to consider the Bombay High Court as the domiciliary court of the owners of Ya Mawlaya when the persons/companies to whom the vessel belongs are domiciled outside Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vessel has created a likelihood of such action being taken there, or the court is a domiciliary court of the owner attracting such claims there. That is not the case here. In fact, at the time when Kara Mara filed the suit all claims were already filed against it in the foreign court at New Orleans, U.S.A. No doubt Kara Mara had challenged the jurisdiction of that court and had succeeded in the first round. but that was by no means a final adjudication. Nor can one legitimately conclude from this the likelihood of claims being filed in Bombay. In the present case, the Bombay High Court is not the domiciliary court of Kara Mara or its vessel. Nor it any claim for liability which can be limited filed against kara mara in the Bombay High Court. None of the defendants to the suit is within the jurisdiction of the Bombay High Court. The fortuitous presence of the whip in the Bombay harbour will not entitle the owner to file a limitation action in the Bombay High Court in the absence of any claims being made or apprehended against his or the vessel in that court. Therefore, bringing the ship and to the Bombay Port, in order to confer jurisdiction on the Bombay High Court, has the chara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of securing the compliance by the appellant of the orders of the high Court which may be made against the appellant. The Division Bench had a justified apprehension about the appellant not complying with the orders of the High Court in view of the past conduct of the appellant. The Division Bench, therefore, felt that the best way of securing compliance of its orders by the appellant in future would be to direct the appellant to bring into the court the money which it had received from new castle, the insurers of Kara Mara. As the question of the appellant's obeying any further orders of the court will not now arise. the order of 21-11-1997 also now becomes purposeless. We, therefore, allow Civil Appeal No.s 8535 of 1997 and 8536 of 1997 to the extent of setting aside the impugned order of 21.11.1997. The order dated 20/21-08-97 has now become infructuous and hence no further orders are necessary in that connection. We however, make it clear that it the respondents or any of theme have any right to proceed against New Castle or the appellant in respect of the said sum of US $ 15 millions paid by New Castle to the appellant and held in escrow as stated earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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