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2022 DIGILAW 264 (GUJ)

Navigation Key INC v. M. V. Manticore

2022-02-11

BHARGAV D.KARIA

body2022
JUDGMENT : Bhargav D. Karia, J. Heard learned advocate Mr. Prathmesh N. Kamat with learned advocate Ms. Paurmai B. Sheth for the plaintiff, learned advocate Mr. S.P. Majmudar and learned advocate Mr. Zarir Bharucha for the defendant No. 1. 1. This matter was argued for sometime yesterday, however, learned advocate Mr. Majmudar submitted that the owners of the defendant vessel have filed Caveat in the Registry and therefore, the matter is kept today. 2. Today, learned advocate Mr. Zarir Bharucha appearing on behalf of learned advocate Mr. Majmudar submitted that the Caveator is not ready and willing to comply with Rules 29 and 32 of the Bombay High Court Original Side Rules and Forms which are applicable to the admiralty jurisdiction of this Court. In that view of the matter, the Caveator is not permitted to take part in this proceeding. 3. By this Suit, the plaintiff-Navigation Key Inc. In that view of the matter, the Caveator is not permitted to take part in this proceeding. 3. By this Suit, the plaintiff-Navigation Key Inc. has prayed as under: "a) That this Hon'ble Court be pleased to order and decree against the Defendant vessel to pay to the Plaintiff a principal sum of USD 342,000 towards losses suffered by the Plaintiff on account of breach of the Charterparty by Owners Agreement, together with interest being an amount of USD 674.63 from the date the amount became due till date, and legal costs being an amount of USD 20,000 with further interest at the rate of 18% p.a. on the sum of USD 342,000 from the date of filing of the suit till date of payment and/or realization as per Particulars of Claim; b) That the Defendant vessel along with her hull, engines, gears, tackle, machinery, articles, things, bunkers, apparel, plant other appurtenances at present lying at Deendayal Port, Gujarat within territorial waters of India, be arrested by a warrant of arrest of this Hon'ble Court and the same be condemned in respect of the claim herein be ordered to be sold along with her hull, engines, gears, tackle, machinery, articles, things, bunkers, apparel, plant, furniture and all other appurtenances and net sale proceeds be applied to the satisfaction of the Plaintiff's claim in the suit; c) That pending tho hearing and final disposal of the suit, the Defendant vessel along with her hull, engines, gear, tackle, machinery, articles, things, bunkers, apparel, plant, furniture and all other appurtenances at present lying at Deendayal Port, Gujarat within the territorial waters of India, or wherever she is within the territorial waters of India, be arrested by a warrant of arrest this Hon'ble Court; d) That pending the hearing and final disposal of the suit, the Defendant vessel along with her hull, engines, gear, tackle, machinery, articles, things, bunkers, apparel, plant, furniture and all other appurtenances at present lying at the port and harbor of Deendayal, Gujarat within the territorial waters of India, or wherever she is within the territorial waters of India be ordered to be appraised and sold and the net sale proceeds thereof be ordered to be deposited in this Hon'ble Court to the credit of the Plaintiff's claim; e) For ad interim reliefs in terms of prayer clause 'c' and 'd'; f) For costs of the suit; g) For such other and further reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case." 4. The brief facts of the case are as under: 4.1. The Plaintiff approached the Owners for hire of the Defendant vessel for a time period of 3 months, extendable by a further period of 3 months. Pursuant to negotiations between parties on 17th January 2022, the Broker-M/s. Arrk Shipping sent an Email to the Plaintiff sharing the 'clean recap' of the main agreed terms with the plaintiff (hereinafter referred to as the "Charterparty"). The Charterparty stated that all subjects have been lifted. Therefore, the Owners had agreed to let the Defendant vessel on hire as per the agreed terms, i.e. for a time charter of 3 month, extendable by 3 months, +/-20 days at the Plaintiff's option as the Charterer. The Charterparty, inter alia, contemplated that (i) the Defendant vessel will be delivered at one Safe Port at Salalah, Oman in the period between 28th January 2022 and 5th February 2022 and (ii) hire at the rate of USD 24,000 daily, including overtime (DIOT) was payable for the charter period; 4.2. It is the case of the plaintiff that on 19th January 2022, the Broker-M/s. Arrk Shipping sent another Email to the Plaintiff sharing the agreement, shared earlier on 17th January 2022. By the said Email, the broker affirmed the understanding between the parties that the Defendant vessel will be let on hire to the Plaintiff and delivered at Salalah, Oman, as per the agreed terms. 4.3. On 19th January 2022, pursuant to the above Email, the Plaintiff addressed an Email to the Master of the Defendant vessel, inter alia, informing him of the agreement to be entered into between the parties and requesting him for the route and distance between Salalah and Zanzibar. 4.4. On 19th January 2022, the Master of the Defendant vessel addressed an Email to the Plaintiff providing the Passage Plan for the Defendant vessel and sought comments for the Plaintiff on the same. 4.5. On 19th January 2022, the Broker-M/s. Arrk Shipping requested for KYC documents from the Plaintiff, including financial background, company registration certificate, shareholder and managing director passport copies, etc. as requested by its lawyer. The said requirements were clearly a part of the Owners' due diligence process and not requirements under the Charterparty, as such they did not impact the already clean fixed Charterparty. 4.6. as requested by its lawyer. The said requirements were clearly a part of the Owners' due diligence process and not requirements under the Charterparty, as such they did not impact the already clean fixed Charterparty. 4.6. On 19th January 2022, once again the broker addressed an Email to the Plaintiff, stating that they would wait for maximum one hour for the requested documents. The Plaintiff addressed an Email to the broker Arrk Shipping inter alia, stating that since the Charterparty has already been fully fixed, trading the Defendant vessel by putting her on hire to other parties would be in clear breach of the Charterparty. By the said Email, the Plaintiff also sent its certificate of incorporation to the Broker, as requested. 4.7. On 20th January 2022, the Plaintiff addressed an Email to the Broker-M/s. Arrk Shipping, inter alia, stating that Owners' attempt to cancel the Charterparty is ex-facie wrongful, since no such right has been provided in the same. The Plaintiff further notified that it is in breach of the Charterparty by not allowing the Plaintiff to trade the Defendant vessel for the agreed charter period. 4.8. On 21st January 2022, considering that the Charterparty was in place and without affirming the Owners' breach, the Plaintiff inquired with the Master of the Defendant vessel for the expected time of arrival of the Defendant vessel at Salalah, Oman along with her berthing and discharging prospect. In response, by an Email of even date, the Master of the Defendant vessel confirmed that the vessel was expected to arrive at the delivery place, i.e. Salalah, Oman on 23rd January, 2022 (at 1600 hours local time) and advised that the Defendant vessel would berth on 24th January 2022. 4.9. It is the case of the plaintiff that on the basis of the Charterparty fixed with the Owners and on the Master's representation, on 21st January 2022, the Plaintiff negotiated to sub-charter the Defendant vessel to one Karaba Shipping for a period of period of 3 months, extendable by 3 months. On 21st January 2022, the Plaintiff itself quoted a sum of USD 25,900 as the charter hire. Till 26th January 2022, the Plaintiff was in negotiations with Karaba Shipping. 4.10. On 21st January 2022, the Plaintiff itself quoted a sum of USD 25,900 as the charter hire. Till 26th January 2022, the Plaintiff was in negotiations with Karaba Shipping. 4.10. It is the case of the plaintiff that in the period between 23rd January 2022 and 27th January 2022, despite the expected time of arrival on 23rd January 2022, the Plaintiff did not receive any update or the whereabouts of the Defendant vessel. 4.11. On 27th January 2022, the Plaintiff addressed an Email to the broker and to the owners, inter alia, holding them liable for breach of the Charterparty by failing to inform the Plaintiff of the whereabouts of the Defendant vessel. 4.12. In the meantime, around 30th January 2022, the Plaintiff through the Broker-M/s. Arrk Shipping became aware that the Defendant vessel has sailed out from Salalah, Oman, indicating that the vessel has now been fixed on a different charter. Accordingly, the Plaintiff could not let the Defendant vessel on hire to Karaba Shipping. 4.13. It is the case of the plaintiff that on 3rd February, 2022, the Plaintiff (through its Advocates) issued a demand notice to the Owners, inter alia stating that (i) in breach of the terms of the Charterparty, the Owners have failed to deliver the Defendant vessel to the Plaintiff, (ii) on account of the aforesaid failure, the Plaintiff was unable to sub-charter the Defendant vessel and has thus suffered losses of USD 342,000, (iii) The Plaintiff called upon the Owners to pay USD 342,000 by close of business UAE, on 4th February 2022. 4.14. It is the case of the plaintiff that on 5th February 2022, the laycan, i.e., the time allowed for delivery of the Defendant vessel, as per the Charterparty expired, despite expiry of the allowed laycan, the Owners failed to deliver the Defendant vessel to the Plaintiff. 5.1. Learned advocate Mr. Prathmesh Kamat for the plaintiff submitted that on 17th January, 2022, the Email received from the Broker-M/s. Arrk Shipping clearly points out a clean recap of the main agreed terms and therefore, there was a concluded agreement between the plaintiff and the owner of the defendant vessel through the broker. 5.2. 5.1. Learned advocate Mr. Prathmesh Kamat for the plaintiff submitted that on 17th January, 2022, the Email received from the Broker-M/s. Arrk Shipping clearly points out a clean recap of the main agreed terms and therefore, there was a concluded agreement between the plaintiff and the owner of the defendant vessel through the broker. 5.2. It was further submitted that the owner of the vessel through the Broker-M/s. Arrk Shipping, in order to get out from the agreement has raised issues with regard to submission of the KYC documents by the plaintiff and its Directors and thereafter, abandoned the agreement on the ground that negotiations are not completed. 5.3. It was therefore, submitted that neither the Broker nor the owner of the defendant-vessel has replied to the Emails sent by the plaintiff on 19th January, 2022 onwards. There is no response to the Email dated 3rd February, 2022 sent by the Lawyers of the plaintiff calling upon the owner as well as the Broker for performance of the contract and the claim of loss of 342,000 USD alleged to have been suffered by the plaintiff. 5.4. In support of these submissions, reliance is placed on the decisions rendered in case of Atlantic Great Lakes S.S. Corporation V/s. Steelment and Interocean Shipping Company V/s. National Shipping & Trading Corporation of United States Court of Appeals, Second Circuit dated 21st November, 1977 and DHL Project & Chartering Limited V/s. Gemini Ocean Shipping Company Limited rendered by the High Court of Justice Mr. Jacobs, Queen's Bench Division Commercial Court dated 31st January, 2022. 5.5. Relying upon the aforesaid decisions, it was submitted that as the plaintiff has lifted all the subjects with regard to the agreement which was being negotiated with the Broker-M/s. Arrk Shipping, there was an acceptance of the offer by the plaintiff and therefore, there was a concluded contract which the owner of the defendant vessel was bound to perform. It was submitted that admittedly, the defendant vessel was never put in possession of the plaintiff pursuant to the agreements which were agreed by the plaintiff on 17th January, 2022 and also on 19th January, 2022. The plaintiff has suffered loss to the tune of 342,000 USD as the plaintiff could not enter into further sub-charter agreement with M/s. Karaba Shipping. 5.6. The plaintiff has suffered loss to the tune of 342,000 USD as the plaintiff could not enter into further sub-charter agreement with M/s. Karaba Shipping. 5.6. It was pointed out that there was negotiation going on between the plaintiff and its sub-charterer and by Email dated 26th January, 2022 received from the Broker of Karaba Shipping, it was communicated to the plaintiff that if the vessel still there, they can leave the Subs, meaning thereby that the plaintiff could not enter into an agreement with the broker of Karaba Shipping for further sub-charter of the defendant vessel in view of the fact that the owner and the Broker of the defendant vessel have not responded to the concluded contract as per the say of the plaintiff. 6. I have considered the submissions made on behalf of the plaintiff and also perused the documents annexed with the plaint, more particularly, the Email dated 17th January, 2022 at 20.34 hrs. sent by the broker of the defendant vessel as well as the Email dated 17th January, 2022 at 15.12 hrs. preceded by Email dated 17th January, 2022 at 12.18 hrs. from the Broker of the defendant vessel and replies given by the plaintiff by the Email dated 17th January, 2022 at 20.11 hrs. 7. I have also considered the Emails sent by the Broker of the defendant vessel on 19th January, 2022 at 8.28 hrs wherein also it is stated that the they are pleased to draw a clean recap of main terms agreed followed by Email dated 19th January, 2022 at 11.24 hrs intimating that the plaintiff has fixed the vessel for 3+3 time charter and full fixture details shall be sent soon. This Email is followed by Email dated 19th January, 2022 at 19.03 hrs. from the Broker-M/s. Arrk Shipping intimating that the charterer's documents for KYC are awaited and thereafter, the negotiation would be cancelled and trade would be done for other business. 8. It appears that thereafter, there is no communication either from the broker or the owner of the defendant vessel with the plaintiff. 9. In such circumstances, the plaintiff has filed this Suit raising the alleged maritime claim on the ground that there is an agreement between the plaintiff and the owner of the defendant vessel which was never performed, resulting into a loss of 342,000 USD to the plaintiff. 10. 9. In such circumstances, the plaintiff has filed this Suit raising the alleged maritime claim on the ground that there is an agreement between the plaintiff and the owner of the defendant vessel which was never performed, resulting into a loss of 342,000 USD to the plaintiff. 10. It is also averred in the plaint that the plaintiff tried to negotiate the sub-charter agreement with Karaba Shipping resulting into a loss of profit of about 342,000 USD and therefore, the plaintiff has filed this Suit for recovery of 342,000 USD plus cost and interest so as to arrest the vessel as per Section 5 of the Admiralty Jurisdiction and Settlement of Maritime Claim Act, 2017 (Act, 2017). 11. On perusal of the documents produced on record as well as the averments made in the plaint, I am of the opinion that there is no concluded contract entered into by the plaintiff with the owner of the defendant vessel through broker and on perusal of the Emails, details of which are narrated herein above, it is apparent that the negotiations were going on which have never fructified in a concluded contract, which can result into a maritime claim as per provisions of Section 4(1)(g) or 4(1)(h) of the Act, 2017. In such circumstances, no order of arrest of the defendant vessel can be passed. 12. The matter is adjourned for further orders on 22nd February, 2022.