JUDGMENT 1. THIS is an application by the owner of the vessel M.V. OSM Arena. They are an incorporated company in Seoul, Korea, by the name of Shinhan Capital Company Limited. They seek dismissal of Admiralty Suit A.S. No.3 of 2010 and vacation of the order of arrest dated 23rd February, 2010 and the order dated 20th May, 2010 for appraisement of the vessel for the purpose of its sale. 2. THIS application was filed on 29th July, 2010. The vessel was arrested by an order of this Court on 23rd February, 2010 in an application for arrest being G.A. No. 510 of 2010 taken out by the plaintiff for such purpose. That order was extended from time to time and confirmed on 22nd June, 2010 without any participation from the owners. Sunwoo Merchant Marine, an enterprise of Seoul, Korea is stated to be the financial lessee of the vessel. 3. ON 3rd August, 2009 it granted a time charter of the vessel in favour of another shipping company also of Seoul Korea, being Seoil Shipping. The duration of this charter was described as "from the time of delivery for one TCT via safe port(s), safe berths, safe anchorage(s)" and so on. Now, this time charterer Seoil granted a voyage charter of the vessel to the plaintiff for 28 days. 4. IT appears to me that the time charter and voyage charter were made after the contract of carriage was executed between the owner the time charterer and the plaintiff described as a fixture note dated 1st August, 2009. The fixture note said that a quantity of 43,000 metric tons of iron ore of which at least 22,000 metric tons were to be loaded at Haldia would be carried by the vessel from Haldia and Paradeep or Vizak or Gangavaram to a discharge port in China excluding the Yangtze river. 100% freight would have to be paid within three banking days of completion of loading. The master was to give an authority letter to the charterer's nominated agents to sign the bills of lading on behalf of the master. On and from the third week of August, 2009 the vessel started loading the said cargo. 5. A bill of lading was issued on 13th October, 2009 by one S.K. Ghosh, describing himself to be representing Bon Voyage Shipping and Logistics, an organisation said to be the agent of the master. On and from the third week of August, 2009 the vessel started loading the said cargo. 5. A bill of lading was issued on 13th October, 2009 by one S.K. Ghosh, describing himself to be representing Bon Voyage Shipping and Logistics, an organisation said to be the agent of the master. The gross weight of the goods as mentioned in this document is was 43,990 wet. metric tons. The shipper was the plaintiff, the consignee was "to order" and the notified party was one Swiss Singapore Overseas Enterprises PTE Ltd. of Singapore. The port of discharge was mentioned as "any main port, China". "Freight prepaid" is stamped on this document. The goods were described as "clean on board". Sometime in October, 2009 or thereabouts the vessel left the shores of India. 6. IT appears that very soon there were disputes between the parties. The vessel, in or about December, 2009, had revisited India for the purpose of discharge of some cargo. Promptly a suit was instituted in this Court by the plaintiff being Suit No. 353 of 2009. On 11th December, 2009 an order was passed in an interlocutory application therein by Syamal Kanti Chakrabarti, J. restraining the owners to deal with the cargo contained in it. In January, 2010 another application was filed by the plaintiff being G.A. No. 174 of 2010, where, on 19th January, 2010 an order was passed restraining the vessel from leaving the port. That order restraining the vessel from leaving the Indian port is still operative. Many proceedings are pending between the parties. But I will not discuss all of them. 7. I will only discuss in brief some proceedings which are going on between the parties or their agent or buyer in China. A few documents from proceedings in the Tianjin Maritime Court in China have been brought on record by the applicant by way of a supplementary affidavit. They reveal, at the prima facie level that the plaintiff sold the entire shipment to one concern Express Well. Express Well in turn sold the consignment to another company Tangshan Ganglu Iron and Steel Company Limited (hereafter referred to as "Tangshan Ganglu"). This appears from an affidavit of 29th January, 2010 signed by one Saubhik Ray of the plaintiff and used before the said Court in China. 8. Express Well in turn sold the consignment to another company Tangshan Ganglu Iron and Steel Company Limited (hereafter referred to as "Tangshan Ganglu"). This appears from an affidavit of 29th January, 2010 signed by one Saubhik Ray of the plaintiff and used before the said Court in China. 8. FURTHERMORE, this buyer Tangshan Ganglu brought proceedings against the owner of the vessel and the time charterer in the said Court in China for compelling them to deliver the cargo to them. They were claiming the goods as a nominee of the plaintiff. Ultimately, the Chinese Court ordered release of the goods in favour of Tangshan Ganglu upon their furnishing security of 4.5 Million U.S. dollars. After institution of this suit, proceedings were taken out by the plaintiff for sale of the vessel, which is pending. A receiver was appointed by the Court to appraise the vessel and to invite offers for its sale. Some steps have been taken in this behalf by the receiver. 9. ON behalf of the applicant, Mr. Anindya Kumar Mitra, learned Sr. Advocate made submissions. The plaint and the application for arrest were placed in detail. The cause of action of the plaintiff was sought to be unfolded. It was said that the cause of action was founded on the alleged failure of the ship owner to deliver the cargo to the rightful claimant at the proper port i.e. Tianjin in China. The claim was for value of the cargo, damages, excess freight paid and so on. 10. THE first point of the applicant was that the financial lessee had granted a time charter of the vessel. THE time charterer had in turn granted a voyage charter to the plaintiff. THEre was no privity of contract between the vessel owner and the plaintiff. It was a private dispute between the time charterer and the voyage charterer. Hence the owner was not liable. In any case, there was no maritime claim that could attach to the vessel. Hence the vessel could not be arrested. In aid of this proposition the following cases were cited: Epoch Enterrepots v. M.V. Won Fu, reported in AIR 2003 SC 24 , and Sierra International Shipping Corpn. v. M.V. Umka and Others, reported in AIR 2003 Bombay 265. 11. SECONDLY, the Bill of Lading Act, 1856 was placed. Hence the vessel could not be arrested. In aid of this proposition the following cases were cited: Epoch Enterrepots v. M.V. Won Fu, reported in AIR 2003 SC 24 , and Sierra International Shipping Corpn. v. M.V. Umka and Others, reported in AIR 2003 Bombay 265. 11. SECONDLY, the Bill of Lading Act, 1856 was placed. The learned Senior Counsel said that all rights under it were transferred to its endorsee, upon its endorsement. He placed a supplementary affidavit filed by the owners to bring on record the proceedings before the Chinese Court. He showed from there that the Plaintiff had sold the goods to ExpressWell who in turn had resold them to Tangshan Ganglu. During such sale they had endorsed the bill of lading in favour of the ultimate purchaser. All this happened before filing of the suit. Therefore, any right in the Bill of Lading had been transferred to such buyer and that at the time of filing of the suit the Plaintiff had no right in the goods. Hence the Plaintiff had no cause of action. He cited Asiatic Steam Navigation Co. Ltd. v. Jethalal Dharamshi and Co. and Another, reported in AIR 1959 Cal 479 . 12. THIRDLY, he contended that the Plaintiff was guilty of suppression, for suppressing the above facts. Furthermore, they ran the case in the plaint that the goods were not delivered at the right port. He showed a series of correspondence between the parties by e-mail annexed to the affidavit-in-opposition of the plaintiff to show that the port of discharge depended on the party to whom the plaintiff was to sell the goods and remained uncertain. But the persons incharge of the ship as well as the Plaintiff knew well in advance of the expected date of arrival of the vessel in China and of the port nominated by the Plaintiff which was Tianjin and that the goods had been discharged at that port. 13. THE vessel was incurring heavy expenses by way of statutory charges at the anchorage, wages of the crew, maintenance charges and so on, which was very prejudicial to the owners and was causing great hardship to them. 14. THE learned Senior Counsel for the Plaintiff, Mr. S.N. Mookerjee said that the plaintiff was a voyage charterer. 13. THE vessel was incurring heavy expenses by way of statutory charges at the anchorage, wages of the crew, maintenance charges and so on, which was very prejudicial to the owners and was causing great hardship to them. 14. THE learned Senior Counsel for the Plaintiff, Mr. S.N. Mookerjee said that the plaintiff was a voyage charterer. He argued that in this kind of a voyage charter the vessel is manned by the crew of the owner and that the owner was always in control of the vessel. He took me through the contract of carriage including the Bill of Lading to demonstrate that only the master of the vessel had the authority to authorize issuance of a Bill of Lading. The Bill of Lading had been issued on that footing. 15. HE took me through the Bill of Lading to show that the notified party was unnamed. The plaintiff reserved the right to nominate a notified party. While notifying such notified party the Plaintiff had made it clear that such notified party would be the plaintiff's agent to take delivery of the goods. The Bill of Lading had been endorsed accordingly. Such endorsement did not take away the right of the Plaintiff. Upon endorsement the right to the goods no doubt passed to the endorsee but it was subject to any condition or qualification or reservation made by the holder of the bill of Lading. Therefore, the Plaintiff was not divested of its rights under the original Bill of Lading. HE cited Bengal Enamel Works Ltd. v. Apejay Private Ltd., reported in ILR 1970 (1) Cal 459. 16. HE further showed me the International Convention on Arrest of Ships, 1999 and argued that such Convention was incorporated into our laws by the decision of the Hon'ble Supreme Court in the case of M. V. Elizabeth and Ors. v. Harwan Investment and Trading Pvt. Ltd., Hanoekar House, Swatontapeth, Vasco-De-Gams, Goa, reported in AIR 1993 SC 1014 . HE said that failure to deliver cargo and rights arising out of it to the charterer was a maritime claim under the definition of maritime claim in Article 1(f) and (h) of the convention. He also said that the buyer of the Plaintiff or the buyer from such buyer was the agent of the plaintiff and the ship owner and the persons in control of the ship knew so. He also said that the buyer of the Plaintiff or the buyer from such buyer was the agent of the plaintiff and the ship owner and the persons in control of the ship knew so. With such knowledge the goods were not delivered to them causing great loss and damage. The agent of the plaintiff had to, in those circumstances, furnish security to the satisfaction of the Chinese Court and take delivery of the goods. For those reasons the buyer was not remitting the price to the Plaintiff. 17. IN any event the Court at this stage was to see whether a prima facie case had been made out by the plaintiff, which the plaintiff had made out, and continue the arrest of the vessel till determination of the trial. 18. THERE are three basic kinds of charter parties, which are known-time charter, voyage charter and demise charter (called bareboat charter in the USA). Shipping practice prevalent in the U K is adopted and applied in India and other countries. In voyage and time charters, the master and crew remain the employees of the owner and under their control. The charterer charters the vessel, usually, to ship cargo. By the contract of carriage, the bill of lading is executed and issued by the authority of the owner or the master, usually by an agent. (See: chapter 5 of Christopher Hill on. Maritime Law 5th Edition). The fixture note dated 1st August, 2009 recognises such authority of the master (see: clause 10). 19. ON examination of the contract of carriage being the fixture note and the bill of Lading, in this case, I find that there is no departure from this practice. The time charter was issued by Sunwoo Merchant Marine, the financial lessee of the vessel under an arrangement between them and the owner, of which we should not be concerned. This time charterer granted a voyage charter to the plaintiff, which, it appears, the time charterer was permitted to grant. The bill of lading was issued by Bon Voyage Shipping and Logistics, under the authority of the master. It is well settled that where the master as the employee of the owner issues or authorises issue of a bill of lading, the owner is bound by the transaction. The bill of lading was issued by Bon Voyage Shipping and Logistics, under the authority of the master. It is well settled that where the master as the employee of the owner issues or authorises issue of a bill of lading, the owner is bound by the transaction. Therefore, the submission of the learned Senior Counsel for the applicant that the owner was not a party to the transaction and hence was not liable thereunder or that the dispute was only between the voyage charterer and time charterer is completely unacceptable. 20. MOREOVER, following his contention, based on Section 1 of the Bill of Lading Act, 1856 each and every holder and endorsee of the bill to whom the property in the goods is to pass, has rights against the owner, for inter alia non-delivery or wrongful delivery. Such right includes the right to arrest the vessel under the International Convention on Arrest of Ships, 1999 [Article 1(f) and (h)] which is etched in our maritime common law by the recognition given to such conventions by the Hon'ble Supreme Court in M.V. Elizabeth (supra). In Paragraph 77 of that judgment, the Supreme Court has said: "77. It is true that Indian Statutes lag behind the development of international law in comparison to contemporaneous statutes in England and other maritime countries. Although the Hague Rules are embodied in the Carriage of Goods by Sea Act, 1925, India never became a party to the International Convention laying down those rules (International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, Brussels 1924). The Carriage of Goods of Sea Act, 1925 merely followed the United Kingdom) Carriage of Goods by Sea Act, 1924. The United Kingdom repealed the Carriage of Goods by Sea Act, 1924 with a view to incorporating the Visby Rules adopted by the Brussels Protocol of 1968. The Hague-Visby Rules were accordingly adopted by the Carriage of Goods by Sea Act, 1971 (United Kingdom). Indian legislation has not, however, progressed, notwithstanding the Brussels Protocol of 1968 and adopting the Visby Rules or the United Nations Convention on the Carriage of Goods by Sea, 1978 adopting the Hamburg Rules. The Hamburg Rules prescribe the minimum liabilities of the carrier far more justly and equitably than the Hague Rules so as to correct the tilt in the latter in favour of the carriers. The Hamburg Rules prescribe the minimum liabilities of the carrier far more justly and equitably than the Hague Rules so as to correct the tilt in the latter in favour of the carriers. The Hamburg Rules are acclaimed to be a great improvement on the Hague Rules and far more beneficial from the point of view of the cargo owners. India has also not adopted the International Convention relating to the Arrest of Sea-going Ships, Brussels, 1952. Nor has India adopted the Brussels Conventions of 1952 on civil and penal jurisdiction in matters of collision; nor the Brussels Conventions of 1926 and 1967 relating to maritime liens and mortgages. India seems to be lagging behind many other countries in ratifying and adopting the beneficial provisions of various conventions intended to facilitate international trade. Although these conventions have not been adopted by legislation, the principles incorporated in the conventions are themselves derived from the common law of nations as embodying the felt necessities of international trade and are as such part of the common law of India and applicable for the enforcement of maritime claims against foreign ships." 21. NOW, let me come to his next point. When admittedly the plaintiff had sold the goods by endorsing the bill of lading in favour of their buyer, prior to institution of the suit, did the plaintiff have any cause of action? In my opinion the plaintiff has to show that fully at the trial. But there is prima facie evidence that they had sold the goods, which were resold by the buyer, to Tangshan Ganglu. 22. IT appears that the bill of Lading was endorsed to Tangshan Ganglu. IT is said that such buyer was to be the agent of the plaintiff seller for the purpose of taking delivery of the goods. Therefore, the plaintiff retained rights under the Bill of Lading. The owner argues that the property in the goods had passed to the buyer and the endorsement in favour of the buyer was unconditional, as is an endorsement in favour of a buyer. In modern international practice, the bill of lading represents the goods. When a bill of lading is endorsed by a holder in favour of another person that endorsee assumes a right of possession of the goods as was available to the holder. In modern international practice, the bill of lading represents the goods. When a bill of lading is endorsed by a holder in favour of another person that endorsee assumes a right of possession of the goods as was available to the holder. For example, if the goods are already hypothecated, the endorsee of a bill of lading will only acquire rights over such hypothecated goods. Regarding the effect of endorsement of a bill of lading by the holder in favour of a third party, the following passage in Schmitthoff's Export Trade, Tenth Edition is important:- "First, the transfer of the bill of lading is merely deemed to operate as a symbolic transfer of possession of the goods, but not necessarily as a transfer of the property in them. The transfer of the bill passes such rights in the goods as the parties intend to pass. Where the consignee or endorsee of the bill is the agent of the shipper at the port of destination, it is evident that the parties, by transferring the bill of lading, intend only to pass the right to claim delivery of the goods from the carrier upon arrival of the goods, but not the property in them." 23. NOW, let me examine Section 1 of the Indian Bills of Lading Act, 1856. Section 1 is as follows:- "1. Rights under bills of lading to vest in consignee or endorsee-Every consignee of goods named in a bill of lading and every endorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself." 24. OUR Division Bench in Asiatic Steam Navigation Co. Ltd. v. Jethalal Dharamshi and Co. and Another, reported in AIR 1959 Cal 479 in Paragraph 47 recognized the bill of lading as a document of title. One phrase in the above section is very important in this case. It is "to whom the property in the goods therein mentioned shall pass". OUR Division Bench in Asiatic Steam Navigation Co. Ltd. v. Jethalal Dharamshi and Co. and Another, reported in AIR 1959 Cal 479 in Paragraph 47 recognized the bill of lading as a document of title. One phrase in the above section is very important in this case. It is "to whom the property in the goods therein mentioned shall pass". Therefore, only any consignee or endorsee of a bill of lading, entitled to the property represented by the bill assumes the rights of the holder and is also subjected to his liabilities. This section, in my opinion, refers to a particular class of bills of lading for goods of which there is unconditional transfer in favour of the endorsee. Therefore, not every endorsee assumes the rights of title of the original holder. Only the endorsee to whom the property is also to pass, assumes such right. A passage from the above text book on Export Trade written by Schmitthoff's, inter alia states that a bill of lading may be endorsed in favour of an agent (who is not the owner, but represents the owner) for the purpose of taking delivery. The circumstances surrounding the endorsement have to be examined to ascertain the title of the goods. 25. THIS principle was enunciated by P.B. Mukharji, J. in Bengal Enamel Works Ltd. v. Apejay Private Ltd., reported in ILR 1970 (1) Cal 459 in Paragraph 31 as follows:- "31. It was, therefore, held that in that case the endorsement of the bill of lading was only by way of a pledge for a loan and it did not pass the property in the goods to the indorsee. The principle enunciated by this authority and as found in the present law, is that the property does not pass by the mere fact of endorsement but the contract and the context in which the endorsement is made must always be taken into consideration to see for what purpose the endorsement was made. The principle enunciated by this authority and as found in the present law, is that the property does not pass by the mere fact of endorsement but the contract and the context in which the endorsement is made must always be taken into consideration to see for what purpose the endorsement was made. If the context of the contract shows that the endorsement was for the purpose, for instance, to pledge the goods with the bank by endorsement in the bill of lading, then the bank does not become the owner of the goods; or again, if the context of the contract shows that the bill of lading was indorsed to an agent to take delivery of the goods, then that endorsement does not create title to the goods in the agent. Here I am satisfied on the facts and on the context as well as on the terms of the contract that the endorsement was only for the purpose of taking delivery and distributing the goods and that was clearly and expressly provided in the handling agency contract stipulating for such endorsement." 26. IN the above circumstances, the question whether the plaintiff retained ownership control of the goods or divested themselves of their ownership has to be established by evidence at trial. It can only be established by evidence whether the buyer of the plaintiff was taking delivery of the goods as the plaintiff's agent or was taking delivery as buyer. The facts of Epoch Enterrepots v. M.V. Won Fu, reported in AIR 2003 SC 24 are completely different from the facts of this case. The Hon'ble Supreme Court has summarized the facts in Paragraph 35 as follows:- "35......The facts disclose that the disponent was an intending charterer of the vessel from the owner and it is on expectancy of such a contract, the fixture note was issued. There was as a matter of fact no charter party or agreement with the charterer and some eventuality in future is stated to be the basis of the cause of action. It is on this score we think it expedient to record that even upon assumption of the appellant's case at its highest, no credence can be attached thereto. The disponent owner was not a demise charterer but it is on the happening of such an event in future that such a fixture note has been issued. It is on this score we think it expedient to record that even upon assumption of the appellant's case at its highest, no credence can be attached thereto. The disponent owner was not a demise charterer but it is on the happening of such an event in future that such a fixture note has been issued. In our view there is no sufficient evidence available as regards the action in rem making the vessel liable in the contract said to have been entered into, as recorded in the fixture note. It is in the nature of a breach of contract and liability of the vessel would not arise, though however, we are not expressing any opinion as regards the maintainability of an action in personam or its eventual success." 27. THUS, there was no charter party. Only a fixture note was produced as evidence. The Court could not even come to any conclusion on the basis of such evidence whether a voyage charter or time charter or demise charter was entered into with the disponent owner. In these circumstances, it held that there was no maritime lien. 28. THE Bombay case Sierra International Shipping Corpn. v. M.V. Umka and Others, reported in AIR 2003 Bombay 265 is also different in facts. It was a suit by a charterer against the ship owner for breach of a charter party agreement by not making available the ship. In these circumstances, the Court held that there was no liability of the vessel. However, there is prima facie substance in the argument of the learned Senior Counsel for the applicant that the port at which the goods were to be discharged was Tianjin and that it was so discharged at that port. From my perusal of the documents placed by him I have formed an opinion that the discharge port was uncertain and was to be indicated by the Plaintiff, depending upon the buyer of the goods. The Plaintiff indicated Tianjin to be such port and the goods were ultimately discharged at that port, although at one point of time Caofedian port was contemplated by the plaintiff as the port of discharge, because of some delay in the voyage. 29. BUT, it appears that the dispute was regarding delivery of the goods. The Plaintiff indicated Tianjin to be such port and the goods were ultimately discharged at that port, although at one point of time Caofedian port was contemplated by the plaintiff as the port of discharge, because of some delay in the voyage. 29. BUT, it appears that the dispute was regarding delivery of the goods. Furthermore, it appears to me upon examination of the records of the Chinese proceedings and the submission of the parties that these proceedings were instituted by Tangshan Ganglu and that the goods have been delivered to them upon their furnishing a security of 4.5 million US dollars, being the rough value of the goods. Therefore, the goods have been delivered. 30. THE principal dispute between the plaintiff and the owner or time charterer is regarding their refusal to deliver the goods to the plaintiff's agent. Now, this agent as described by the plaintiff has received the goods. If Tangshan Ganglu can prove that they were the rightful claimant, they will get back the security. Suppose it is proved that the alleged rightful claimant is not the plaintiff's agent, then there is no question of getting back the security. Now, if the plaintiff or the buyer fails in China, then the cause of action in India for the goods will automatically get extinguished as it will be proved that they have no right to the goods. If they succeed the Court in India will have to hold that their claim or part of it has been satisfied. Public International Law discharges parallel adjudication in two Courts in two countries. Moreover once the goods have been delivered, it is a proceeding between charterer, buyer and ship owner which is pending in China. 31. THEREFORE as far as the claim for value of goods and ancillary claims, the plaintiff has till this point of time no prima-facie case. But the other claims regarding refund of freight, loss of profit and claim for costs will have to stand trial. 32. IN my opinion Rupees five crores will adequately secure such claim. My reasons are as follows: the goods are valued at about Rs. 17.5 crores on the date of filing of the plaint. The agent of the plaintiff has got delivery of the goods. 32. IN my opinion Rupees five crores will adequately secure such claim. My reasons are as follows: the goods are valued at about Rs. 17.5 crores on the date of filing of the plaint. The agent of the plaintiff has got delivery of the goods. The only question will be their diminution in value at the date of filing of the plaint from the value at the time of expected discharge, which in my estimation cannot be more than 10%, which the plaintiff may get as damages. As the goods have been delivered, prima facie, only a part of the freight, may, at the highest be refunded, which should not be more than 50% of the refund claimed. Some incidental claims may be added to this. 33. UPON the applicant or its agent furnishing such security, in cash or by bank guarantee of an Indian Nationalized Bank or immovable property, to the satisfaction of the Registrar O.S., within four weeks from date and payment of Rupees five lakhs to the Advocate-on Record for the Plaintiff as reimbursement of the remuneration paid by the plaintiff to the Receiver and the costs for valuing the vessel and inviting offers for sale etc., further to the order dated 20th May, 2010 within the same period, the order of arrest will stand vacated and Receiver discharged. This Court has to be satisfied that the above conditions have been fulfilled. Otherwise the said Order for arrest and Receiver will continue till disposal of the suit or until further orders of this Court whichever is earlier. 34. THIS application is partly allowed accordingly. No order for costs. Urgent certified photocopy of this judgment and order, if applied for, to be provided upon complying with all formalities. Later- Stay of operation of the judgment and order made today in the above application is prayed for on behalf of the petitioner. Considering the questions involved in this application, I grant stay of operation of this judgment and order for a period of 10 days from date. All parties concerned are to act on a signed photocopy of the operative part of this order upon the usual undertakings.