Alliance Carrier Ship Management v. M. V. XIN Long Yun -58 (IMO No. 9896971)
2025-03-15
MAUNA M.BHATT
body2025
DigiLaw.ai
ORDER : MAUNA M. BHATT, J. 1. Learned Advocate Mr. Pankeet Aundhiya, mentioned this matter for urgent circulation today and considering the urgency involved , the present matter is taken up for hearing today. 2. Heard Learned Mr. Pankeet Aundhiya for the Plaintiff. 3. Learned Advocate for the Plaintiff has placed reliance on the averments made in the plaint and submitted that Plaintiff as the Charterer and Longi Shipping Ltd as the owner and/or ship manager of the Defendant Vessel entered into a Charter Party agreement dated 15 th August 2024 for a period of about 12 months. After the execution of the said charter party, the Plaintiff was delivered with the vessel in August 2024 in China and the Plaintiff initiated its voyage from UAE to India. In accordance with the agreed terms for hire payment, the Plaintiff consistently made timely hire payments upon receipt of the corresponding invoices of 1 st Hire to 6 th Hire from the Owners evidenced by the confirmation email received from the Owners acknowledging the receipt of payment. 4. Learned Advocate for the Plaintiff submitted that on 17 February 2025, the Owners of the vessel, through their broker, issued the invoice for the 7 th hire covering the period from 18 February 2025 to 20 March 2025. Upon receipt of the invoice, the Plaintiff immediately took the necessary steps to ensure the timely payment of the hire charges as per the agreed terms. On 24 February 2025, the Plaintiff made the full payment of USD 510,000 for the hire charges to the Owners of the vessel. The Plaintiff has also processed the payment of remaining USD2400 which were miscellaneous charges and not on the account of the Plaintiff on 27 February 2025. 5. Learned Advocate for the Plaintiff further submitted that on 25 February 2025, to the Plaintiff's surprise, the Plaintiff’s agent received an email from the Master of the vessel stating that the ship owner had instructed to stop the vessel due to non-receipt of the charter hire charges. In response, the Plaintiff promptly sent an email on the same day to the Master of the vessel, clarifying that the payment had already been processed along with SWIFT copy previously shared with owners. On the same day the Plaintiff received another email from the Master of the vessel, stating that the Ship Owner had refused to proceed to the loading port.
On the same day the Plaintiff received another email from the Master of the vessel, stating that the Ship Owner had refused to proceed to the loading port. The Plaintiff was taken aback by this development, as the payment had already been processed and remitted. Despite the remittance, the Ship Owner refused to allow the vessel to proceed. 6. Learned Advocate for the Plaintiff further submitted that vide an email of even date, that the funds had been deposited into the owner's USD account on 24 February 2025 and also shared a copy of tracer with the Master. The same is produced herewith. The Plaintiff was surprised by the Owners incorrect allegations stating non-receipt of hire payment, especially given the remittance had already been completed. To safeguard its position, the Plaintiff further notified the Master and the Ship Owner that any stoppage of the vessel, despite the hire payment being made, would result in all associated time and fuel/bunker costs being charged to the Owner's account and time. 7. Learned Advocate for the Plaintiff further submitted that on 25 February 2025, the Plaintiff received an email from the Owner's broker stating that the Owner had not received the 7th hire payment. As a result, and in accordance with Clause 7(c) of the charter party, the Owners suspended operations and withdrew the vessel from the Charterers due to failure to pay hire charges in full, constituting a breach of the charter party. The Plaintiff responded via email, stating that the Plaintiff has paid USD 510,000, which are hire charges in full on 24 February 2025, and thus there arises no question of non-payment of hire charges. 8. Learned Advocate for the Plaintiff further submitted that on 27 February 2025, the Owner, via email, incorrectly alleged that the Plaintiffs had failed to pay the 7th hire payment on 24 February 2025 and stated that the Owner’s suspension notice dated 25 February 2025 was entirely legitimate and effective. However, it is important to note that in a subsequent email dated 5 March 2025, the Owners confirmed the receipt of the hire payment and stated that it had been received on 25 February 2025. This sequence of events highlights the Owners' deliberate actions to harass the Plaintiff by suspending vessel operations, resulting in delays in cargo operations.
However, it is important to note that in a subsequent email dated 5 March 2025, the Owners confirmed the receipt of the hire payment and stated that it had been received on 25 February 2025. This sequence of events highlights the Owners' deliberate actions to harass the Plaintiff by suspending vessel operations, resulting in delays in cargo operations. Despite acknowledging the receipt of the hire payment, the Owners stated that the vessel continues to remain withdrawn from the Charterers' service in accordance with suspension notice and declared the reference charterparty terminated. Moreover, the Owners unlawfully retained the sum of the 7th hire payment as security, further compounding the Plaintiff's position, despite the vessel having been withdrawn. It is respectfully submitted that once the vessel has been withdrawn and the charterparty terminated, no contractual relationship remains between the parties. Therefore, the Owner is not entitled to retain the hire payment as security, as there is no valid basis for such retention under the circumstances. 9. Learned Advocate for the Plaintiff further submitted that the Plaintiff has incurred substantial monetary losses as a result of the untimely and unlawful termination of the Charterparty. The Plaintiff had consistently made timely payments in accordance with the hire payment invoices issued by the Owners, all of which have been duly acknowledged and confirmed by the Owners themselves. These payments were made in good faith and strict adherence to the terms of the charter party. It is submitted that at no point of time did the Plaintiff resist the payment being made; the Plaintiff has set out a Bonafide case which states that there was no intention of the Plaintiff to not make hire payments. 10.Learned Advocate for the Plaintiff further Owner’s actions in terminating the charter party were both illegal and unjustified. The Owner terminated the agreement without providing any prior notice to the Plaintiffs, as required under the terms of the contract. Furthermore, the reasons for this termination remain unexplained and unclear, particularly because the hire payment was made in full and duly acknowledged by the Owners. This sudden and unjustified termination has resulted in significant disruption to the Plaintiff’s operations, leading to severe financial losses. The Plaintiff had fulfilled its contractual obligations responsibly, yet the Owner’s failure to adhere to the agreed terms and their decision to terminate the charterparty without cause or proper notification has caused unnecessary harm to the Plaintiff.
This sudden and unjustified termination has resulted in significant disruption to the Plaintiff’s operations, leading to severe financial losses. The Plaintiff had fulfilled its contractual obligations responsibly, yet the Owner’s failure to adhere to the agreed terms and their decision to terminate the charterparty without cause or proper notification has caused unnecessary harm to the Plaintiff. 11.Learned Advocate for the Plaintiff further submitted that under the terms of the Charterparty, the Plaintiff was obligated to arrange for bunker fuel to ensure the vessel continued its operations. Accordingly, the Plaintiff approached one Integr8 Fuels for bunker delivery. Integr8 Fuels raised various invoices towards the same. Due to the sudden and premature termination of the charterparty before the expiration of the agreed-upon term, the bunker fuel, amounting to USD 121,860, was already on board the vessel at the time of termination. It is submitted that Owner is not liable to retain the said bunkers and thus they are liable to pay for the same. the Owner is liable for the payment of this sum to the Plaintiff, as the fuel was procured and onboarded in accordance with the Charterparty’s provisions. The Plaintiff should not bear the financial burden of this fuel, which was rendered unnecessary due to the unjustified termination of the agreement by the Owner. Therefore, the Owner is responsible for reimbursing the Plaintiff for the cost of the bunker fuel already on board the vessel. 12. Learned Advocate for the Plaintiff further submitted that once cargo is loaded on board the vessel, it is the Plaintiff’s duty and responsibility as the charterer of the vessel to ensure the cargo is unloaded at the discharge port and timely delivery of the cargo is handed over to Plaintiff’s consignee. However, in light of the charter contract being cancelled by the owners of the Defendant vessel, the Plaintiff is now liable for cargo claims and for damages suffered by its clients due to the delivery of their consignment. The Plaintiff estimates these claims and in light thereof it seeks security against such claims from the defendant vessel owner as after the charter party was terminated, the owner did not berth the vessel for unloading the cargo. Furthermore, the Plaintiff has suffered a significant financial loss due to the forfeiture of bookings for 788 TEU containers, which were scheduled to be loaded at the port.
Furthermore, the Plaintiff has suffered a significant financial loss due to the forfeiture of bookings for 788 TEU containers, which were scheduled to be loaded at the port. It is submitted that the Owner is liable for this loss, as the premature and unlawful termination of the charterparty directly resulted in the cancellation of these bookings. The Plaintiff submits that it is anticipated that they may incur claims for restow and storage costs for cargo. Additionally, the Plaintiff anticipates receiving claims from cargo owners relating to delayed cargo delivery or potential non-delivery as a direct consequence of the unlawful termination of the charter party and the disruption caused to the scheduled operations. These claims further exacerbate the Plaintiff's financial losses resulting from the Owner’s actions. Therefore the Plaintiff seeks security of USD 2,999,840 (United States Dollars Two million Nine Hundred Ninety Nine Thousand Eight Hundred Fourty) towards principal amount lost due to contract termination. 13. Learned Advocate for the Plaintiff submitted that the Plaintiff is, therefore, entitled to claim the loss caused to it by proceeding in rem against the Defendant Vessel. The Defendant Vessel is, therefore, liable to be proceeded against for the losses caused to the Plaintiff due to the termination of the charter party. Thus, the Defendant Vessel is liable to pay an amount of USD 2,999,840 (United States Dollars Two million Nine Hundred Ninety Nine Thousand Eight Hundred Fourty) towards principal amount lost due to contract termination plus USD 121,860 (United States Dollar One Hundred Twenty One Thousand Eight Hundred Sixty) towards bunkers currently lying on board the Defendant vessel purchased by Plaintiff for Defendant vessel’s use, plus USD 510000 (United States Dollar Five Hundred Ten Thousand) towards vessel hire charges paid by Plaintiff till 20.03.2025 to the Defendant vessel owner for charter hire and withheld by the owners after termination under pretext of security deposit plus USD 25,000 (United States Dollars Twenty Five Thousand) towards legal fees amounting to total of USD 3,656,700 (United States Dollar Three Million Six Hundred Fifty Six Thousand and Seven Hundred) along with 2% interest per month on the said total claim amount. 14.
14. Learned Advocate for the Plaintiff further submitted that Plaintiff’s claim is a recognized maritime claim within Section 4(1) (h) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 {Admiralty Act} for loss/damages suffered by the Plaintiff to as well as in connection with the illegal and untimely termination of charterparty despite timely payments of the hire charges by the Owners. 15. Heard Learned Advocate Mr. Pankeet Aundhiya for the Plaintiff and also considered the averments made in the plaint herein declared at Ahmedabad on 15.03.2025 filed by the advocate for the Plaintiff herein and the affidavit of Mr. Mukesh Chavda, the Authorized Representative of the Plaintiff above named affirmed on 15.03.2025 in support of the arrest. On a reading of the plaint and annexures thereto, prima facie it appears that the Plaintiff’s claim in the Plaint is in the nature of a maritime claim. 16. Upon hearing Learned Advocate Mr.
Mukesh Chavda, the Authorized Representative of the Plaintiff above named affirmed on 15.03.2025 in support of the arrest. On a reading of the plaint and annexures thereto, prima facie it appears that the Plaintiff’s claim in the Plaint is in the nature of a maritime claim. 16. Upon hearing Learned Advocate Mr. Pankeet Aundhiya and upon the Plaintiff giving an undertaking in writing to pay such sums by way of damages as this Court may award as compensation in the event of the Defendant Vessel sustaining any prejudice by this order, I do order that the Registrar of this Court do issue a warrant for the arrest of the Defendant vessel M.V. XIN LONG YUN-58 (IMO NO.: 9896971) together with her hull, engines, gears, tackles, bunkers machinery, apparel, plant, furniture, fixtures, appurtenances and paraphernalia, plant and machinery at present lying at Kandla Port, Gujarat or wherever she is within the territorial waters of India be Arrested by a Warrant of Arrest be executed at any time of the day or night or on Sundays or holidays and I do further order that the Port Officer and the Customs Authorities at Kandla Port do effect the arrest, seizure or detention of the Defendant Vessel at present lying at Kandla Port or wherever she is within the territorial waters of India or such other place wherever she may be within the territorial waters of India and I do further order that in the event of the Defendants and / or those interested in her depositing in this Court for securing and / or satisfying the Plaintiff’s claim of principal amount with costs US Dollars 3,656,700 and further interest at the rate of 2% per month on principal claim from suit date till payment and /or realisation, the said Warrant of Arrest would not be executed against the Defendant Vessel at present lying at Kandla Port, within the territorial waters of India. 17. The Port Officer and the Customs Authorities at Kandla Port are directed to arrest the Defendant Vessel i.e. M.V. XIN LONG YUN-58 (IMO NO.: 9896971) machinery at present lying at Kandla Port, Gujarat within the Indian territorial waters and to keep the Defendant Vessel under arrest until further orders of this Court.
17. The Port Officer and the Customs Authorities at Kandla Port are directed to arrest the Defendant Vessel i.e. M.V. XIN LONG YUN-58 (IMO NO.: 9896971) machinery at present lying at Kandla Port, Gujarat within the Indian territorial waters and to keep the Defendant Vessel under arrest until further orders of this Court. It is further ordered that the Port Officer and the Customs Officer at Kandla Port shall also intimate about this order to the Master / Chief Engineer of the Defendant Vessel and effect the warrant of arrest for the Defendant Vessel through email. 18.The Registry is directed to send this order to Port and Customs at Deendayal Port (Kandla) at following addresses:- dydirector@Kandlaport.gov.in , harbourmaster@Kandlaport.gov.in , dyconservator@Kandlaport.gov.in , srdydirector@Kandlaport.gov.in , dycvo@Kandlaport.gov.in , vo@Kandlaport.gov.in , kandlacustoms@gmail.com , hmofficekpt@gmail.com , trafficmanager@Kandlaport.gov.in , komal.patel@gov.in , signaldpt@Kandlaport.gov.in , commr-cusKandla@nic.in , cvo@Kandlaport.gov.in 19. It is further directed that Authorities at Kandla Port shall act on Email copy of the order and take the Defendant Vessel i.e. M.V. XIN LONG YUN-58 (IMO NO.: 9896971) under arrest immediately. 20. Notice to the Defendants returnable on 25.04.2025. The Plaintiff is permitted to serve to the Defendant Vessel through her Owner or interested person through email. 21. It is also open for the Plaintiff to communicate the above order by Email to the Port and Customs authorities at Kandla Port and the Authorities at Kandla Port are directed to act on Email message with an ordinary copy of this order. 22. It is made clear that it will be open for the Defendants to approach this Court even prior to the returnable date with adequate notice to the Plaintiff. 23. Direct Service TODAY is permitted.