This article is written by Karan Jayesh Shah, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from Lawsikho.com. Here he discusses “The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017”.
Table of Contents
Introduction
To reform the various archaic British laws governing maritime relations and claims in India was the need in the age of globalised trade and commerce and this led to the passing of the new law, i.e. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 is an Act of parliament of India which came into force on the 1st April, 2018.
Until the enactment of the new Act, the Admiralty Court Act, 1840, the Admiralty Court Act, 1861, read with the Colonial Courts of Admiralty Act, 1890, the Colonial Courts of Admiralty (India) Act, 1891 and the provisions of the Letters Patent, 1865, formed the corpus of admiralty law which are 126 to 177 years old laws. These have been repealed and replaced now by the Admiralty Act, 2017.
The Admiralty Act seeks to consolidate the existing laws relating to admiralty jurisdiction, admiralty proceedings on maritime claims, maritime lien, arrest, detention, sale of vessels and other connected matters.
Admiralty law is another name for domestic maritime law and it covers the maritime questions and offences and the Admiralty Act, 2017 contains 18 Sections and is divided into 04 Chapters.
Applicability
It applies to every vessel in Indian territorial waters irrespective of the place of residence or domicile of the owner of the vessel.
Inland vessels and vessels under construction that have not been launched are the exceptions to the applicability of the Act. Further, the Act doesn’t apply to foreign vessels with a non commercial purpose and to vessels owned or operated by the government. for any non commercial purpose.
Admiralty Jurisdiction
Until the enactment of the new Act, the admiralty jurisdiction vested by the various archaic British laws were on the High Courts of Bombay, Madras and Calcutta which now with the enactment of the new Act under Section 3 read with Section 2(1)(e) of the Admiralty Act 2017 also extends and vests admiralty jurisdiction to High Court of Hyderabad, Gujarat, Kerala, Orissa, and Karnataka and also, by notification in the official gazette, the Act allows the central government to extend the jurisdiction over any other High Court.
Even though each court has admiralty jurisdiction over the territorial waters of its state there is a lack of clarity as to limits of the territorial waters of a state. When the Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill, 2016 was in discussion in the Rajya Sabha, Shri D. Bandopadhyay, Member of Parliament said on the above matter that the jurisdiction of the territorial waters needs to be demarcated through the use of modern technologies such as satellite mapping, geo-special mapping, etc.
In the landmark case of M. V. Elizabeth & others v. Harwan Investment Trading Pvt. Ltd. (1992 SCR (1)1003), the Apex Court decided on jurisdictional uncertainty and ruled that for deciding matters within India, the High Courts of India hold a superior position than any other Courts or laws. The Court was also of the opinion that the High Courts of India have unlimited jurisdiction with inherent and plenary powers to decide upon their own jurisdiction.
In Kamalakar Mahbadev Bhagat v. Scindia Steamship Navigation Co. Ltd (AIR 1961 Bom 186, (1960) 62 BOMLR 995), It was held that a suit for damages by the ship owner against any vessel for collision on the high seas should be adjudicated by the High Court having Admiralty Jurisdiction on its Admiralty side, regardless of whether it’s an Indian vessel or a foreign flag vessel.
In Bai Kashibai & Ors v. Scindia Steamship Navigation Co. Ltd (AIR [1961] BOM 200, (1960) 62 BOMLR 1017), It was held that a suit for damages with respect to the loss of life as a result of a collision on the high seas, whether in rem or personam, falls within the exclusive jurisdiction of the High Court under its Admiralty jurisdiction.
Maritime Claims
Article 1 of the International Convention on the Arrest of Ships, 1999 set out a list of maritime claims similar to the Admiralty Act, 2017. The maritime Claims over which admiralty jurisdiction of the High Court would fall are given under section 4 of the Admiralty Act, 2017 and includes dispute regarding vessel ownership, possession, mortgage or any other security created on the vessel, construction, repair of the vessel, claims regarding the loss of life or personal injury, etc.
The High Court having Admiralty Jurisdiction can order the sale of the vessel and thereby settle any outstanding account of the parties to the proceedings. The vessel that would be brought by the purchaser would be free from all the encumbrances, liens, attachments, etc.
In the case of M.V. Nordlake v. Union of India (2012 (3) Bom CR 510), the Bombay High Court held that the ship owner is liable to furnish security up to the value of the vessel provided that the value of the arrested vessel is less than the value of the plaintiff’s claim
Maritime Lien
In Common law, a lien is a right of the creditor to retain the property of the debtor until the debt is paid.
A privileged claim upon a maritime property or res in respect of services done to or injury caused by it is a maritime lien. The maritime res can be the vessel, cargo or freight, etc but not against the owner. If by the order of the court the vessel is sold then the lien over it won’t exist anymore. For the period of 1 year, the lien against the owner of the vessel will continue to exist regardless of change of ownership, registration or flag.
Section 9 of the Admiralty Act, 2017 lists the categories of maritime liens and their priorities which are broadly:
- wages for employment (including repatriation and social insurance contributions) claim for which extinguishes after two years;
- loss of life or personal injury claims;
- reward for salvage services; and
- port, canal, and other waterways dues, pilotage and statutory dues.
Jurisdiction over Vessels (Arrest of Vessels) and Persons
Each High Court vested with the admiralty jurisdiction exercises their power and authority over both vessels within their territorial waters and persons within their territory. The Act of 2017 specifies the conditions in which courts can exercise both these types of jurisdiction and is embodied under Section 5, 6, 7, 8 of the Act.
When it comes to Jurisdiction over a person, the high courts with the admiralty jurisdiction may exercise their authority against a person with regards to maritime claims. However, the high courts will not entertain complaints against a person in certain cases. These include:
- damage, or loss of life, or personal injury arising out of a collision between vessels that was caused in India, or
- non-compliance with the collision regulations of the Merchant Shipping Act, 1958 by a person who does not reside or carry out business in India.
Further, if any ongoing case with regards to the same incident is going on in any court outside India then the high court with the admiralty jurisdiction in India won’t entertain action against such a person.
When it comes to arrest of a vessel, the high court with the admiralty jurisdiction may order for the arrest of any vessel within their jurisdiction for providing security against a maritime claim which is the subject matter of a court case. They may do so under rationale such as:
- owner of the vessel is liable for the claim,
- the claim is based on mortgage of the vessel, and
- the claim relates to ownership of the vessel, etc.
In the case of Liverpool & London SP & I Association Ltd v. MV Sea Success I ((2004) 9 SCC 512), the Supreme Court held that the principles laid down in Arrest Convention, 1952 and the Arrest Convention, 1999 (the “1999 Convention”) would be applicable in India on the matters concerning Admiralty despite India not being a signatory to either the Arrest Convention, 1952 or the 1999 Convention.
Conclusion
It is a welcoming change in the Indian Maritime regime that the long-awaited piece of legislation was finally into force on 1st April, 2018. The newly enacted Act of 2017 has repealed the various archaic British laws that were governing maritime relations and claims in India. Also, any judgment, decree, order passed by the single judge of the high court is appealable to a division bench of the high court and the central government shall appoint a list assessors who will assist the judge in determining rates and claims in admiralty proceedings.
Under the Colonial Courts of Admiralty Act, 1890, only the Chartered High Courts were vested with admiralty jurisdiction. Under the new Act, 8 High Courts in coastal states could now invoke admiralty jurisdiction up to the territorial waters of their respective jurisdictions in respect of maritime claims.
In the light of the passing of the Admiralty Act, 2017, it would be wise and prudent to re-examine shipping documents to ensure that these are in conformity with the new law.
References
- The Admiralty Act, 2017 (February 08, 2020, 09:04 AM IST), http://www.manupatrafast.in/NewsletterArchives/listing/Hariani/2018/Feb/The% 20Admiralty%20(Jurisdiction%20and%20Settlement%20of%20Maritime%20Claims) %20Act,%202017.pdf
- The Admiralty Act, 2017 (February 08, 2020, 11:08 AM IST), https://www.inhousecommunity.com/wp-content/uploads/2018/07/Clasis16-7-18The-Admiralty-Jurisdiction-and-Settlement-of-Maritime-Claims-Act-2017….pdf
- India: Maritime Lien In India (February 09, 2020, 12:04 AM IST), https://www.mondaq.com/india/Transport/208090/Maritime-Lien-In-India
- The Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill, 2016 (February 08, 2020, 1:54 PM IST), https://www.prsindia.org/billtrack/admiralty-jurisdiction-and-settlement-maritime-claims-bill-2016
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