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2013 DIGILAW 1001 (BOM)

Sunil B. Naik v. Geowave Commander

2013-05-10

M.S.SANKLECHA, MOHIT S.SHAH

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Judgment :- M.S. Sanklecha, J. This appeal challenges the order of the learned Single Judge dated 17 April 2013 vacating the arrest of the vessel Geowave Commander (GC), by following his decision dated 17 April 2013 in the matter of Yusuf Abdul Gani v. Geowave Commander in Notice of Motion No.613 of 2013 in Admiralty Suit (L) No.319 of 2013. Being aggrieved by the Order dated 17 April 2013 in Admiralty Suit(L) No. 230 of 2013 Yusuf Abdul Gani (supra) has preferred an appeal to this Court being Appeal (L) No.208/2013. We have today by our order dismissed the appeal being Appeal No.208 of 2013 filed by Yusuf Abdul Gani. 2) However the grievance of the appellant is that facts of this case are materially different on two counts from the facts existing in the case of Yusuf Abdul Gani(supra) in Admiralty suit (L) No.230 of 2013 and therefore, the learned Single Judge ought to have independently dealt with the two issues which are as under: (a) The Appellant in this case has specifically stated that the vessel GC is owned by one M/s. Master and Commander AS Norway and has been taken on demise charter by one M/s. Reflect Geophysical Pte Ltd (M/s. Reflect) while in the case of Yusuf Abdul Gani (supra) it is stated that the vessel GC was owned by M/s. Reflect and at the hearing submitted that it is on bare boat charter from its owners to M/s. Reflect; and (b) The Appellant’s case for arrest of the respondent vessel GC is not only on the basis of maritime claim made under Article 1(1) (f) of the International Convention of Arrests of Ships, 1999 (Arrest Convention 1999) i.e. on the basis of use or hire of the ship but also under Article 1(1)( l) of the Arrest Convention 1999 as being goods supplied or services rendered i.e. necessaries to the vessel GC. While in the case of Yusuf Abdul Gani(supra) the basis of maritime claim as made in its plaint is only on the basis of use or hire of the ship and covered by Article 1(1) (f) of the Arrest Convention 1999 alone. While in the case of Yusuf Abdul Gani(supra) the basis of maritime claim as made in its plaint is only on the basis of use or hire of the ship and covered by Article 1(1) (f) of the Arrest Convention 1999 alone. 3) The brief facts necessary to deal with this appeal are as under: a) On 29 June 2012, M/s. Master and Commander AS Norway the owner of the respondent vessel GC chartered the vessel GC under a charter party to M/s. Reflect on a bare boat charter for three years at hire of US$ 14090 per day. In terms of the charter party M/s. Reflect would redeliver respondent vessel GC to the owner at the expiry of three years. b) On 30 October 2012, M/s. Reflect entered into an agreement with the appellant for supply of 16 fishing trawlers called chase boat on charter. c) On 26 November 2012 the appellant made available to M/s. Reflect 16 chase boats on charter. d) Between the period 29 October 2012 to 25 March 2013, the appellant raised various invoices on M/s. Reflect towards the rent/hire charges covering the period from 26 November 2012 to 22 March 2013. e) On 16 March 2013 the appellant gave notice of termination of the agreement for chase boat charter dated 30 October 2012. This termination was effective from 23 March 2013. However the chase boats were dehired with effect from 11 April 2013 leaving a total outstanding of Rs.2.11crores (after adjusting some payments made) payable by M/s. Reflect to the appellant. f) On 12 April 2013 the appellant applied to the Learned single Judge to have the vessel GC arrested for recovery of its maritime claim. The vessel GC was already arrested by the order dated 15 March 2013 of the leaned single Judge on the application of Yusuf Abdul Gani passed in Admiralty Suit (L) No.230 of 2013. This court passed another order arresting the respondent vessel GC on 12 April 2013 and ordered her arrest till 17 April 2013 when the matter was placed for further hearing at 3.00 P.M. on 17 April 2013. This court passed another order arresting the respondent vessel GC on 12 April 2013 and ordered her arrest till 17 April 2013 when the matter was placed for further hearing at 3.00 P.M. on 17 April 2013. g) In the mean time on 19 March 2013 the owners of the respondent-vessel GC i.e. M/s. Master and Commander AS Norway had filed a Notice of Motion Lodging No.617 of 2012 in Admiralty Suit (L) No.230 of 2013 initiated by Yusuf Abdul Gani and sought vacation of the exparte order dated 15 March 2013 of arrest of its vessel GC. h) At 11.00 am on 17 April 2013 the learned Single Judge vacated the ex parte order of arrest dated 15 March 2013 of the respondent vessel GC on the application of her owners M/s. Master and Commander AS Norway passed in Admiralty Suit Lodging No.230 of 2013 filed by Yusuf Abdul Gani. i) At 3.00 p.m. on 17 April 2013 when the appellants' matter was called out the learned Single Judge vacated the order of arrest dated 12 April 2013 passed in the appellant's Admiralty Suit Lodging No.319 of 2013 on the basis of his order in Admiralty Suit Lodging No.230 of 2013. j) Being aggrieved by the order dated 17 April 2013, the appellant is in appeal. 4) We heard this appeal as well as the appeal (L) No. 208 of 2013 filed by Yusuf Abdul Gani together and find that the submissions made by the parties are identical save and except the two distinctions being made in this case by Mr. A.M. Vernekar Counsel for the appellant. 5) We would examine the two distinguishing features sought to be made in the present case from the one existing in appeal bearing Appeal (L) No.208 of 2013 in the matter of Yusuf Abdul Gani (supra) and decide whether the same would lead to a different result from one arrived at by us in Appeal (L) No. 208 of 2013. 6) The first distinguishing feature as urged by Mr. Vernekar was that in the case of plaint filed by Yusuf Abdul Gani in Admiralty Suit Lodging No.230 of 2013 claim for arrest of the vessel GC was on the basis that respondent vessel GC was owned by M/s. Reflect and in this case the Appellants case is that the vessel GC was on a demise charter from its owners to Ms. Reflect. Reflect. In the Appeal (L) No. 208 of 2013 the appellant therein had urged before the Learned single judge and before us that the vessel GC was on a bare boat charter and the same is identical/equivalent to a demise charter. We have in our order passed today in Appeal (L) No. 208 of 2013 have accepted the submission that there is no difference between bare boat charter and demise charter as urged by the appellants therein in view of the Apex Court decision in the matter of Epoch Enterprises v. M.V. Won Fu reported in 2003 (1) SCC 305 . We further held that even if the respondent vessel GC was on demise charter to M/s. Reflect it would make no difference. We upheld the finding of the learned single judge on the issue and held bare boat charter (demise charter) would only lead to the charterer M/s. Reflect becoming a de facto owner of the vessel GC, yet the same would not convert the demise charterer into the de jure owner of the vessel GC. Further we have held that the maritime claim is with regard to a claim arising on account of hire or use of a ship other then the respondent vessel GC and therefore Article 1(1)(f) of the Arrest Convention 1999 and consequently Article 3(1)(b) of the Arrest Convention 1999 would have no application. Therefore the vessel GC being on a demise charter to M/s. Reflect would make no difference to the extent the maritime claim of the appellant arises under Article 1(1) (f) of the Arrest Convention 1999 as the same is with regard to use or hire of the speed boats under charter agreement dated 30 October 2013. 7) We are separately considering the issue whether in case of maritime claim arising for supply of goods and services to the vessel on demise charter would entitle the supplier of goods and services making a maritime claim under Article 1(1)(l) of the Arrest Convention 1999 to arrest the vessel. We will consider this issue after considering the second distinction sought to be made by the appellant that their case for maritime claim was also based for supply of necessaries to the vessel GC based on Article 1(1)(l) of the Arrest Convention 1999. We will consider this issue after considering the second distinction sought to be made by the appellant that their case for maritime claim was also based for supply of necessaries to the vessel GC based on Article 1(1)(l) of the Arrest Convention 1999. 8) The second distinction which is being made by the appellant in this case from that in Appeal (L) No.208 of 2013 is that the maritime claim in this case is for supply of necessaries to the demised vessel GC and therefore their maritime claim arises under Article 1(1)(l) of the Arrest Convention,1999 and consequently the arrest of vessel GC under Article 3(1)(b) of the Arrest Convention 1999 is permissible. In support of his submission that the appellant had supplied necessaries to the vessel GC, Mr. Vernekar draws attention to Article 1(1)(l) of the Arrest Convention 1999 which provides for maritime claim arising out of goods, materials, provisions, bunkers, equipment (including containers) supplied or services rendered to the ship for its operation, management, preservation or maintenance. Therefore it is the appellant’s case that the giving of chase boats to M/s. Reflect on hire is supplying of goods to the vessel GC. In support he invites our attention to the agreement for charter of speed boats dated 30 October 2012 which is titled “Agreement for Chase Boat Charter between M/s. Reflect and the appellant for supply of fishing Trawlers.” Attention is invited to clauses 1 and 2 o the above agreement which reads as under: “1. This charter HIRE agreement is made between M/s. Reflect Geophysical Pte Ltd., 8 Temasek Boulevard 1701, Suntec Tower Three, Singapore038988 (hereinafter referred to as CHARTERER) and M/s. Sunil B Naik, Flat No. 7, Gr floor, Kalewar bldg., Babulnath Road, Mumbai 400007(hereinafter referred to as suppler) 2. Supplier hereby agrees to provide 24 fishing trawlers (hereby referred to as CHASE VESSEL/S) to CHARTERER to assist in survey operation to be conducted by CHARTERER'S seismic vessel M/v. Genowave Commander……”. Mr. Vernekar also invites attention to the certificates issued by M/s. Reflect and the invoices issued by the Appellant to effect that the speed boats are to be engaged to assist the Vessel GC. On the basis of the above, it is contended by Mr. Mr. Vernekar also invites attention to the certificates issued by M/s. Reflect and the invoices issued by the Appellant to effect that the speed boats are to be engaged to assist the Vessel GC. On the basis of the above, it is contended by Mr. Vernekar that their case is for supply of goods to the vessel GC and therefore their maritime claim also arises under Article1(1) (l) of the Arrest Convention 1999 and consequently the vessel GC which is on demise charter is liable to be arrested as the offending vessel under Article 3(1)(b) of the Arrest Convention,1999. 9) As against the above, Mr. Pratap Counsel for the Respondent Vessel GC submits that the agreement for charter dated 30 October 2013 is an agreement for hire of a speed boat. This is also supported by the fact that agreement provides that the hire is to be paid at a daily rate. Therefore the agreement is for hire of speed boats and covered by Article 1(1)(f) of the Arrest Convention, 1999. According to Mr. Pratap the manner of use of the vessel hired will not take it out of Article 1(1)(f) of the Arrest Convention, 1999 and for that purpose places reliance upon the decision of the English Court of Appeals in the matter of “The Eschersheim” reported in (1976) 1 Llyods Law Reports Page 81. So far as application of Article 1(1)(l) of the Arrest Convention, 1999 is concerned he states that no goods or materials were supplied to the vessel GC or services rendered to the vessel GC by the appellant. Therefore no occasion to apply Article 1(1)(l) of the Arrest Convention, 1999 can arise. Therefore he submits that the issues arising in this case and that in the Appeal (L) No. 208 of 2013 are identical. 10) We have considered the submissions. We find that the Charter agreement for the speed boats dated 30 October 2012 is for hire of the same. This is indicated in clause 1 of the Charter agreement as well on the basis of invoices issued by the appellant where charges are on the basis of per day. The fact that the user of the speed boats is indicated in the Charter agreement dated 30 October 2013 and in the invoices does not make it any the less the agreement for hire or use of the speed boats. The reliance placed by Mr. The fact that the user of the speed boats is indicated in the Charter agreement dated 30 October 2013 and in the invoices does not make it any the less the agreement for hire or use of the speed boats. The reliance placed by Mr. Pratap on the decision of the Court of appeal in the matter of “The Eschersheim” (supra) is appropriate. The Court of appeal observed as under: “In my opinion there is no good reason for excluding from the expression “an agreement for the use or hire of a ship” any agreement which an ordinary business man would regard as being within it. If which an ordinary business man would regard as being within it. If A and B make an agreement for A's ship to be used for carrying out any operation for B, I consider that the agreement is one for the use, if not for the hire of the ship. Thus an agreement for a ship to be employed for dredging, towing, cable laying and salvage would be an agreement for the use of the ship. But is an agreement for dredging or towage or cable laying or salvage an agreement for the use of a ship if there is no express reference in the agreement to any such use. If the operation can only be carried by means of a ship. I consider that the agreement must be one for the use or hire of a ship. A towage agreement would therefore always come within the words. Dredging or cable laying could conceivably be performed by other means but in the great majority of cases it would be so obvious that the use of a ship must be intended that this would be implied. …. Therefore the user of the vessel by the person who hires it is immaterial for the purposes of maritime claim and in case of an agreement for hire of a vessel the same would stand covered by Article 1(1) (f) of the Arrest Convention, 1999. 11) Independent of the above, Article 1(1)(l) of the Arrest Convention, 1999 would not apply in the present facts. Article 1(1)(l) of the Arrest Convention, 1999 reads as under: INTERNATIONAL CONVENTION ON ARREST OF SHIPS, 1999 Article1 Definitions For the purposes of this Convention; 1. “Maritime Claim” means a claim arising out of one or more of the following: (a)..... (b)..... Article 1(1)(l) of the Arrest Convention, 1999 reads as under: INTERNATIONAL CONVENTION ON ARREST OF SHIPS, 1999 Article1 Definitions For the purposes of this Convention; 1. “Maritime Claim” means a claim arising out of one or more of the following: (a)..... (b)..... (l) goods, materials, provisions, bunkers, equipment (including containers) supplied or services rendered to the ship for its operation, management, preservation or maintenance; The above provision would apply when goods have been supplied to the vessel. In this case no goods have been supplied to the vessel GC but goods viz. fishing trawlers have been given on hire to M/s. Reflect. Moreover, Article 1(1)(l) of the Arrest Convention, 1999 appropriately covers a situation where goods have been supplied and not to a case where goods have been given on hire or for use only. 12) In view of our above finding that the maritime claim of the appellant does not fall under Article 1(1)(l) of Arrest Convention 1999 no occasion to examine the applicability of Article 3(1) (b) of the Arrest Convention, 1999 can arise. This is so as no supplies of goods or services have been made to the Respondent vessel GC. 13) Therefore, the distinctions sought to be made by the appellant in this case from the facts arising in Appeal (L) No.208 of 2013 are not sustainable. The other contention raised by Mr. Vernekar, Counsel appearing for the Appellants and Mr. Pratap, Senior Counsel appearing for the Respondent-Vessel GC are identical to the issue raised before us in Appeal (L) No.208 of 2013 and the same has been disposed of by our order passed today. Consequently this appeal is also being dismissed for the reasons set out in our order passed today in Appeal No.208 of 2013. 14) In view of the above, we find no merit in the Appeal and uphold the order of the learned Single Judge. Thus the appeal is dismissed. 15) In view of the dismissal of the appeal, the Notice of Motion taken out by the Appellant does not survive and the same is disposed of.