Gujarat High Court
M.V. Asean Jade vs Jaisu Shipping Com. Pvt. Ltd. And Ors. on 27 February, 2002
Equivalent citations: AIR2000GUJ241
ORDER K.M. Mehta, J.
1. M/s. Jaisu Shipping Company Pvt. Ltd., petitioner-original plaintiff has filed this suit against the Owners of the Ship or Vessel "Asean Crystal" (now known as Asean Mariner) owned by Universal Maritime Shipholding Ltd. defendant No. 1 and Glory Ship Management Pvt. Ltd. of Singapore defendant No. 2 that respondents-defendants be ordered and decreed to pay US $ 15,17,770 equivalent to Rs. 6,82,99,650/- (Rupees Six Crores Eighty Two Lacs Ninety Nine Thousand Six Hundred Fifty only) along with interest @ 18% from the date of the suit till payment as also an amount of Rs. 30,000/ (Rupees Thirty Thousand only) per day by way of damages from the date of the suit till the disposal of the suit and till the amount is paid, along with interest @ 18% thereon. The petitioner also prayed that the respondents-defendants be directed not to transfer the Asean Crystal (Asian Mariner) Vessel or any other vessels or other properties belong to the defendants. That suit was filed somewhere on 8th June, 2000. Along with the said suit, the petitioner has also filed Misc. Civil Appln. No. 24/2000 and in that application the petitioned prayed for arrest of the ship "Asean Jade" which was at the relevant time berthed at Kandla Port in the Kutch District in the State of Gujarat and further prayed that the Kandla Port Trust may kindly be directed not to permit the aforesaid vessel "Asean Jade" to mail out of Kandla Port till the disposal of the application and they should arrest the ship "Asian Jade" berthed at Kandla Port. That application was filed somewhere on 22nd June, 2000.
2. When the aforesaid matter was placed before this Court, this Court by order dated 23-6-2000 pleased to pass the following order :
"It was also stated that the vessel named M. V. Asean Jade of the Flag of Singapore said to be of Golden Century Maritime Pvt. Ltd., 24, Raffles Place # 17-01/02 Clifford Centre, Singapore 048621 is berthed at Kandla on June 15, 2000. The said vessel is still at the port of Kandla which is within the jurisdiction of this Hon'ble Court. The applicant submitted that though the same is said to have been registered in the name of Golden Century Maritime Pvt. Ltd., it is in fact owned by the defendants. The applicant further submits that they are sister ships and therefore, for the claim of the plaintiff, the same could be arrested for the discharge of the said claim. It was also stated that if the order of the arrest of the ship is not granted, it would cause substantial and irreparable loss to the applicant plaintiff since the defendants companies are foreigners sister ships and therefore, for the claim of the plaintiff."
"Mr. D. D. Vyas learned Sr. Counsel along with Mr. Metha have invited attention to the judgment in case of Shipping Corporation of India Ltd. v. The Master of M.V. : Giurgeni", reported in 1997(2) Guj LR 1745, wherein, after considering the judgment of Hon'ble Supreme Court in case of M. V. Elisabeth case (AIR 1993 SC 1014) in para 20, the learned Judge has observed as under :
"This is required to be read with Article 3 of International Convention relating to the arrest of Seagoing Ships sinked at Brussels on May 10, 1952. I hereinabove have said that, over and above the statutoiy law of this country I can definitely have a look at the Maritime Law under foreign statutes and common Law is accepted at international level and that, I can also have a look at the Brussels Convention though India does not happen to be a signatory to the said Convention. Necessarily therefore, I shall have to read Article 3 (Para 4) reads thus :
"When in the case of a charterer by demise of a ship, the charterer and no the registered owner is liable in respect of a maritime claim relating to that ship, the claimant may arrest such ship or any other ship in the ownership of the charterer by demise subject to the provisions of this Convention, but no other ship in the ownership of the registered owner shall liable to arrest in respect of such maritime claims." The article upon a plain reading says that, in case of a charter by demise of a ship (i) the charterer and not the registered owner would be liable, in respect of a maritime claim relating to the ship, and that (ii) the claimant may arrest such ship or any other ship in the ownership of the charter by demise, and that (iii) no other ship in the ownership of the registered owner shall be liable to arrest in respect of such maritime claims.
"In view of the same, prayer (a) (b) and (c) of application is granted and also yadi will be sent to Assistant Customs Officer at Kandla Port. Leave to amend. Direct Service permitted."
3. Thereafter, M. V. Asean Jade- original defendant No. 3 filed Misc. Civil Appln. No. 33 of 2000 somewhere on 29th June, 2000, wherein they have prayed in the said application that this Court should set aside the order dated 23rd June, 2000, for arrest of the ship. They further prayed that the said vessel "Asean Jade" be permitted to sail forthwith from the port of Kandla and further prayed that plaintiff be directed to pay to the applicant damages in the amount of Rs. 2,70,000/- per day for each day's detention of the applicant "Asean Jade". Along with the said application, the defendant No. 3 has also filed certain documents in support of that application. In view of the said application, the matter was heard at length and ultimately by the order dated 30-6-2000 this Court pleased to pass following order:
"In view of the reasons be given afterwards I hereby vacate and set aside the order dated 23rd June, 2000 passed by this court in Misc. Civil Application No, 24 of 2000 in Admiralty Suit No. 10 of 2000, I, therefore, direct that the vessel of the applicant "Asean Jade" be released forthwith, I also direct the registry of this court to inform about the order of this court :
(i) to Commissioner of Customs, Kandla Port Trust, Kandla.
(ii) to Civil Judge (S.D.) Gandhidham.
4. After the aforesaid order is passed the matter was heard at length. Shri D. D. Vyas, learned Senior Counsel instructed by Mr. Devesh Mehta, learned advocate appeared on behalf of the original plaintiff. Shri Mihir Thakor, learned Senior Counsel with Mr. Joshi, learned advocate appeared on behalf of defendant No. 1 and defendant No. 2 and Mr. Prashant S. Pratap with Mr. A. S. Vakil, learned advocates appeared on behalf of applicant M. V. Asean Jade original defendant No. 3.
4.1. It may be noted that the said matter was heard somewhere in January 2000 and thereafter February, 2001, and the matter was part heard at that time Mr. A. S. Vakil, learned advocate appearing on behalf of original defendant No. 3 prays for the damages to be given in this behalf. Mr. D. D. Vyas, learned Senior. Advocate submitted that though he has argued the same" but he would like to make further submissions in this behalf and therefore the matter could not be concluded and thereafter matter was listed for several times but for one reasons or other reasons the matter could not be heard it may be that sometime learned advocate appearing for the parties were not available or sometime the court was busy in another matter and thereafter the court directed the parties to file written submissions and thereafter the plaintiffs have filed written submissions on 7-1-2002 and thereafter the matter was heard on 5th February, 2002, and also on 15th February, 2002 and 22nd February, 2002.
PLAINTIFFS CASE:
5. The case of the original plaintiff which has been filed in original plaint along with the affidavit-in-reply dated 30th June, 2000, In the aforesaid application and the written submissions which has been filed by the plaintiff on 7th January, 2002, if one read together the plaintiff has made following submissions.
5.1. The Asean Crystal now Asean Marina and Aseari Jade are sister ships and the Directors of Universal Maritime Ship Holding Ltd. and Glori Ship Management Pvt. Ltd. were the owners of Asean Crystal & Asian Maritime. It was stated that Golden Century Maritime Pvt. Ltd. is a subsidiary company of Glori Ship Management Pvt. Ltd. having common Directors and in fact Glori Ship Management Pvt. Ltd. was managing the Asean Crystal now Asean Marina as also the Asean Jade. It was stated that the address of Glori Ship Management Pvt. Ltd. and Golden Century Maritime Pvt. Ltd. is same and have common staff, common telephones and the business is carried out by the same persons. It was stated that there are common shareholders of the aforesaid companies.
5.2. In view of the same, it was stated that both the companies are the same and the aforesaid ships are sister concern ships. It was denied that Asean Jade is owned by Golden Maritime Pvt. Ltd., Singapore and that Asean Crystal was admittedly owned by Universal Maritime Shipping Ltd. It was stated that the master of the Ship Asean Jade had at the time of arrival reported in Kandla has given the address of the owners as the same address of Glori Ship Management Pvt. Ltd. and that it is being with Glori Ship Management Pvt. Ltd. are the agents and acting as such which has been produced in the matter.
5.2(A). The plaintiff further submitted that it is an undisputed fact that there were common directors and common shareholders with respect to the owners of the sister-ships. That as per the international convention relating to sea going ship of May 10, 1952, Article 3 provides :
"(1) Subject to the provisions of para (4) of this Article and of Article 10, a claimant may arrest either the particular ship in respect of which the maritime claim arose, or any other ship which is owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship, even though the ship arrested be ready to sail but no ship, other than the particular ship in respect of any of the maritime claims enumerated in Article 1(l,o), (p) or (q); (2) Ships shall be deemed to be in the same ownership when all the shares therein are owned by the same person or persons.
5.3. It is the case of the original plaintiff that plaintiff is the owner, of Kamal VII- a floating dry dock which is not self propelled and therefore unable to navigate on its own. The Kamal VII was moored alongside the jetty on the west side of the Kandla channel just north of the passenger jetties Nos. 1 & 2 at the relevant time. It was submitted that the Asean Crystal (Asean mariner) is a cargo vessel of 18,880 Mt. dead weight built in 1977 which is owned by the defendant No. 1 and /or 2. The said Asean Crystal has been renamed as Asean Mariner since 1998.
5.4. It was further case of the original plaintiff that Asean Crystal (Asean Mariner) is a cargo vessel and was berthed in a drydock berth at Kandla Port which is at a distance of about 1.5 kms. away from the Kamal VII and in between two passenger jetties are located. That initially warnings of a cyclone were spotted in the Arabian Sea by the meteorological office at Ahmedabad on 4th June 1998. By 7th June 1998 it was clear to the meteorological office that the cyclone was approaching the coast of Saurashtra and the Kutch coast and warnings were issued for these areas.
5.5. In view of the said cyclone of June 1998 the plaintiff had taken all the safety precautions which were necessary including to close all the hatch covers which lead to the drydock ballasting areas. The vessels which were alongside including the "Asean Crystal" were informed about the same. At around 12.30 p.m. on 9th June 1998 the drydock incharge became aware of another vessel the "Asean Crystal" which was drifting adjacent to the No. 1 passenger jetty and ultimately had collided with Kamal VII which was, as stated hereinabove, was virtually in an immobilized state and has caused substantial damage to the kamal-VII as also the boat Noorani Seahorse which also belongs to the plaintiff.
5.6. It was submitted that the Asean Crystal caused substantial damages including the breaking of all mooring ropes and anchor chains and the Floating Drydock was pushed further upstream and eventually came to rest up to a distance of about 200 meters upstream in the Bandar Basin. Damage caused was extensive both to the Floating Drydock and the Noorani Seahorse.
5.7. It was further submitted that the defendants were grossly negligent in handling the Asean Crystal. The fact that the ship drifted from the Cargo jetty to a distance of more than 1 k.m. towards the passenger jetty No. 1 and beyond and caused extensive and substantial damage to Kamal-VII and Noorani Seahorse clearly show that they had not taken due and proper care as was required. The plaintiff therefore submits that the presumption of Res Ipsa Loquitur applies to the circumstances. The plaintiff says and submits that the defendants were negligent and did not take due care and action to avoid the damage caused by the defendants to the Kamal-VII and Noorani Seahorse.
5.8. It was further submitted that the damage which had been caused to the Kamal-VII and Noorani Seahorse was the "damage caused by the ship within the meaning of the law of Admiralty Jurisdiction. It was further submitted that in view of the fact that the Asean Crystal (Asean Mariner) ship was in the port of Singapore the plaintiffs were advised to file Admiralty proceedings in the High Court of Republic of Singapore being Admiralty in REM No. 336 of 1999.
5.9. In the aforesaid suit, the plaintiff got an order of arrest of the vessel Asean Mariner (Ex-Asean Crystal) in Singapore. Thereupon the owner of the Asean mariner (Ex-Asean Crystal) had provided the security by a Letter of Indemnity from their P&I Association, Hongkong in consideration of refraining from arresting or otherwise detaining another vessel or other property of the ownership of management or in possession or control of the defendants to the extent of US $ 1.25 Million. However the High Court of Republic of Singapore in Admiralty in REM No. 336/99 on October 27, 1999 has passed the following order :
(1) There be a stay of all further proceedings in this action in favour of the Courts of India.
(2) The Defendants are to provide a letter of confirmation to the plaintiffs that the P&I Club letter of undertaking given covers a judgment obtained in India in an in personam action.
(3) The plaintiffs do pay the defendants costs of the application fixed at $ 850.00 5.10. In the aforesaid facts and circumstances the plaintiff is constrained to file the present suit before this Court in its Admiralty Jurisdiction.
5.11. In view of the same the plaintiff submitted that because of the aforesaid damage caused to the Kamal-VII and Noorani Seahorse of the plaintiff by the ship "Asean Mariner" (Asean Crystal) of the defendants, the plaintiff has incurred the expenses to the tune of US $ 1066,690.86 for the purpose of refloating as on today. The plaintiff further submits that the Kamal-VII is not usable even today. With the result, it causes loss of Rs. 30,000/- per day in paying the difference of charges in absence of Kamal-VII. The plaintiff therefore claims the said amount by way of damages till the damages are fully paid. In view of the same the plaintiff claimed damages of US $ 4,51,080 with interest.
5.12. The plaintiff therefore in the written submission submitted that this court had already vacated the order on 30th June, 2000, which I have already quoted in this behalf. It was submitted that the operative order is passed on the same day and the reasons therefor are to be supplied later on and the order was regarding vacating the order of arrest of ship.
5.13. It was submitted that if the operative order is passed on 30-6-2000 and the reasons therefor are to be supplied later as a matter of convenience, the later order containing the reasons cannot go beyond the four corners of the operative order already issued as held by the Hon'ble Supreme Court in the case of Delhi Administration v. Gurdip Singh Uban, Reported in (2000) 7 SCC 296 : (AIR 2000 SC 3737) particularly para 31 which reads as under :
"In our view, if the court allows a writ petition and reasons were to follow later, the first order allowing the writ petition and issuing the writ absolute is the operative order. If reasons therefor are supplied later, as a matter of convenience, the latter order containing reasons cannot go beyond the four corners of the rule absolute already issued."
5.14. It was submitted that the arrest of ship is governed in India also by the aforesaid convention. It is also referred to in the judgment of M.V. Elizabeth's case (AIR 1993 SC 1014). It was submitted that both the ships being of common ownership, it was liable to be arrested and the order of arrest could not have been vacated. It was further submitted that after the judgment of M.V. Elizabeth's case, every High Court has admiralty jurisdiction. Therefore the jurisdiction which has been exercised in the present proceedings is under Article 215 of the Constitution of India, as superior courts of record having inherent and plenary jurisdiction including admiralty jurisdiction and not under the Colonial Court of Admiralty Act, 1890.
5.15. It was further submitted that the Bombay High Court (Original Side) Rules, 1957 are repealed by 1993 Rules. Even otherwise, the Bombay High Court (Original Side) Rules, 1957 would not apply to the proceedings before the High Court and that too under Article 215 of the Constitution of India while exercising the Admiralty jurisdiction.
5.16. It was, therefore, submitted that since the aforesaid rules do not apply, the same cannot be taken into consideration for the purpose of deciding the present application. It was further submitted that after the order was passed, the Court had issued the arrest warrant which has been sewed through the appropriate authorities as directed, therefore the petitioner cannot be held responsible if any mistake that may have been committed by the office while issuing the arrest warrant.
5.17. The plaintiff has relied upon the earlier affidavit of July 7, 2000, and submitted that even that original applicant-defendant No. 3 has not produced any written documents or material to show any damage or loss which has been caused to it. It was further submitted that without any such proof, the plaintiff is not entitled to claim any damages. It was submitted that claim for the damages has to be established by leading sufficient proof and for that purpose no reliance can be placed on any other Judgment since it is a question of fact to be decided in this behalf.
DEFENDANT No. 1 CASE :
6. Mr. Mihir Thakor, learned Senior Counsel appeared on behalf of the defendant No. 1 and has made following submissions.
6.1. It was stated that the ex-parte ad-interim order of arrest of the vessel has been procured by fraudulent misrepresentation, suppression of facts and evidence and with the intention of causing wrongful loss to the owners of the applicant vessel. It was further submitted that a writ was issued by the plaintiff for a claim in damages against the vessel "Asean Crystal" which was then renamed as "Asean Mariner" and the plaintiff quantified its claim in the Singapore proceedings at US $ 8,79,190.86, however, the plaintiff sought security in a much higher amount of US $ 1.2 Million to cover interest and costs. It was further submitted that the plaintiff thereafter accepted security from the owners of the vessel "Asean Crystal" for an amount of US $ 1-.2 Million in respect of their alleged claim for damage to their drydock "Kamal VII".
6.2. It was further submitted that the plaintiff has suppressed this fact that in consideration of the security furnished and accepted by them, the plaintiff has agreed not to arrest or detain the vessel "Asean Crystal" or any other vessel in the same or associated ownership or management. The defendant No. 1 further submitted in that application that application for arrest of "Asean Jade" was sought and obtained by the plaintiff maliciously, recklessly and by perpetrating a fraud on this Hon'ble Court.
6.3. It was submitted that the two vessels are sister-ships and in the same ownership is false to the knowledge of the plaintiff. It was further submitted that the plaintiffs are also fully aware that having accepted security in respect of their alleged claim, they have expressly waived and given up their rights to seek an arrest of any vessel in the same ownership i.e. a sister-ship.
6.4. It was further submitted that vessel "Asean Jade" has loaded a cargo of 13200 mt. agricultural products for export to China and the vessel was ready to sail out of Kandla Port on 27th June,: 2000, but could not do so in view of the order of the arrest. The cargo of agricultural products on board is a perishable cargo and the value of the cargo as per information available is US $ 2.75 Million. The detention of the vessel will lead to losses not only to the owners but also to the shippers of the cargo and the agricultural products on board will become unfit for consumption.
6.5. In view of the above mentioned facts, it was stated that detention of applicant-
defendant No. 1 "Asean Jade" has caused a loss of US $ 4000.00 per day to its Owners which includes the daily standing costs to wards maintenance of the vessel and the crew. This is equivalent to the current charter hire that the vessel would earn. It was further submitted that in addition daily port expenses, agency charges, legal costs, management fees etc. are being incurred and these are quantified at US $ 2000.00 per day. It was, therefore, submitted that the plaintiffs are liable to pay Rs. 2,70,000.00 for each day's detention of the applicant as stated above the vessel was arrested for 8 days. It was, therefore, submitted that defendant No. 1 is entitled to Rs. 2,70,000,00 x 8 + Rs. 21,60,000.00 (Rupees Twenty One Lacs Sixty Thousand) 6.6. The learned counsel further submitted that in view of the order dated 30-6-2000 and in view of the Misc. Civil Appln. No. 33/2000 particularly prayer (b) where the plaintiff be directed to pay to the applicant damages the amount of Rs. 2,70,000/-per day for each day's detention of the applicant "Asean Jade" and stated that this Court passed an order of detention of Vessel Asian Jade on 23rd June, 2000, arid thereafter the said interim relief was vacated on 30th June, 2000 and, therefore, the defendant No. 1 is entitled for damages from 23rd June, 2000 to 30th June, 2000 i.e. total 8 days. He stated in view of the same the plaintiff is liable to pay damages of Rs. 2,70,000/- p.d. x 8 days = 21,60,000/-.
6.7. The learned Senior Counsel has also stated that before plaintiff obtained order of arrest of ship, the plaintiff should file an undertaking by way of damages. At that time, I have inquired from the plaintiffs learned advocate and the Registry of this Court as to whether the plaintiffs learned advocate had given an undertaking before obtaining injunction or not. However, from the record it appears that plaintiff learned advocate has not-filed any such undertaking in this behalf. I may also state that against the application filed being Misc. Civil Appln. No. 33/ 2000 the plaintiff has filed his reply somewhere on 30th June, 2000, and also further reply on 7th July, 2000. Against the said affidavits, original defendant No. 1 has also filed rejoinder on 11th July. 2000.
DEFENDANT NO. 3 SUBMISSIONS : 7. Mr. Prashant S. Pratap. learned advocate with Mr. A. S. Vakil, appeared on behalf of the defendant No. 3.
7.1. It may be noted that original defendant No. 3 M. V. Asean Jade has filed Misc. Civil Application No. 33 of 2000 in Admiralty Suit No. 10 of 2000 before this Court. In the said application it was stated that plaintiff commenced proceedings against defendant No. 1 in Singapore on 27th May 1999 in respect of their claim for alleged damage suffered by them as a result of a purported collision between the vessel "ASEAN CRYSTAL" and the plaintiffs drydock "KAMAL VII" at Kandla during the cyclone of June 1998. This is the very claim that the plaintiff has made out in the above suit. A writ was issued by the plaintiff for a claim in damages against the vessel "ASEAN CRYSTAL" which was then renamed as "ASEAN MARINER". The plaintiff quantified its claim in the Singapore proceedings at US $ 8,79,190.86. However, the plaintiff sought security in a much higher amount of US $ 1.2 million to cover interest and costs.
7.2. The plaintiff thereafter accepted security from the owners of the vessel "ASEAN CRYSTAL" (Defendant No. 1 in the above suit) for an amount of US $ 1.2 million in respect of their alleged claim for damage to their drydock "Kamal VII". As is accepted practice worldwide, security was provided by a letter of Undertaking issued by the Protection and Indemnity (P & I) club of the vessel "ASEAN CRYSTAL" (which is the same P & I Club as that of the plaintiff) guaranteeing to pay to the plaintiff an amount up to US $ 1.2 million upon a final judgment being obtained by the plaintiff in respect of their alleged claim. This was accepted by the plaintiff. Upon security being furnished the claim of the plaintiff against the vessel "ASEAN CRYSTAL" in rem did survive and the plaintiff can now proceed only against the security for payment in the event they succeed in obtaining a final judgment decreeing their claim. The plaintiff can therefore have no right in rem or cause of action in rem against the vessel "ASEAN CRYSTAL" or any other whatsoever.
7.3. It was therefore submitted that the Letter of Guarantee accepted by the plaintiff as security in respect of its alleged claim clearly states that it has been provided to the plaintiff in consideration of the plaintiff refraining from arresting the vessel "ASEAN CRYSTAL" (renamed "ASEAN MARINER") or any other vessel asset or property in the same or associated ownership management possession or control in connection with the plaintiffs alleged claim for damages as a result of the alleged collision between "ASEAN CRYSTAL" and "KAMAL VII". By accepting security in these terms, the plaintiff has expressly waived its rights, if any, to arrest the vessel ASEAN CRYSTAL or any other vessel in respect of its alleged claim for damages. In view of this even assuming that the two vessels are sister ships (which they are not as more particularly demonstrated by them) the plaintiff can have no cause of action for arrest of the vessel "ASEAN JADE" for the purpose of obtaining security in respect of their alleged claim against the Defendant Nos. 1 and 2.
7.4. The applicant defendant No. 3 also referred to the proceedings in the Singapore Court by its order dated 27th October, 1999. directed a stay of the proceedings in favour of the courts of India and directed that the defendants should confirm that the security provided by them would cover a judgment obtained in India. Such confirmation has been provided to the plaintiffs and the Letter of Undertaking dated 28th May 1999 can be enforced upon demand and payment received thereunder in the event the plaintiff obtain a final judgment against the defendant in the above suit. Pursuant to the Singapore Court order dated 27th October 1999, the plaintiff filed the above suit in personam against defendants Nos. 1 and 2. Hence the plaintiffs are fully secured in respect of their alleged claim and are not entitled to double security.
8. In view of the same learned counsel have submitted that the judgment allowing the arrest of sister-ships have no application to the facts of the case and on this ground alone the order of arrest of ship dated 23rd June 2000 is liable to be set aside and vacated. The provisions pertaining to ships under demise charter replied upon by the plaintiff and referred to in the order dated 23rd June 2000 have no relevance and are not applicable. At no point of time were the owners "ASEAN JADE", the demise charterers of "ASEAN CRYSTAL".
8.1. It was further submitted that the suit as filed is in personam against the owners of the vessel "ASEAN CRYSTAL" and its managers. An action in rem for arrest of the vessel "ASEAN JADE" can only be filed in the event the said vessel is in the territorial waters of India. Admittedly "ASEAN JADE" was not in India when the suit was filed. Hence the amendment to join the defendant No. 3 and convert the suit into an action in rem against the defendant No. 3 ought not to have been allowed. The court had no jurisdiction against the defendant No. 3 when the suit was instituted. Consequently no order for arrest of the vessel "ASEAN JADE" can be made in a suit where at its inception this court did not have jurisdiction to do so. The order of arrest dated 23rd June 2000 is without jurisdiction and is liable to be vacated and set-aside.
8.2. It was further submitted that the plaintiff has obtained interim order from this Court after suppressing material fact in this behalf. It was stated that the plaintiff has suppressed from this Court the fact that security in the agreed quantum and in the form acceptable to the plaintiff in respect of its claim against defendant No. 1 has been furnished on behalf of defendant No. 1 and accepted by the plaintiff. It was further submitted that plaintiff has suppressed the fact that in consideration of the security furnished and accepted by them, the plaintiff has agreed not to arrest or detain the vessel "ASEAN CRYSTAL" or any other vessel in the same or associated ownership or management. It was further submitted that the vessel "ASEAN JADE" is admittedly owned by Golden Century Maritime Pvt. Ltd. Singapore whereas the vessel "ASEAN CRYSTAL" which is alleged to have caused damage to the plaintiffs drydock was admittedly owned at the relevant time by Universal Maritime Shipholding S. A. Panama. The two vessels are on the face of it not sisterships as defined under the Brussels Convention 1952.
8.3. It was further submitted that the vessel "ASEAN JADE" has loaded a cargo of 13200 mt. agricultural products for export to China. The vessel was ready to sail out of Kandla Port on 27th June 2000 but could not do so in view of the order of arrest. The cargo of agricultural products on board is a perishable cargo. The value of the cargo as per information available is us $ 2.75 million. The detention of the Vessel will lead to losses not only to the owners but also to the shippers of the cargo. The agricultural products on board will become unfit for consumption.
8.4. It was further stated that the detention of the applicant "ASEAN JADE" is causing a loss of US $ 4000.00 per day to its owners which includes the daily standing costs towards maintenance of the vessel and the crew and equivalent to the current charter hire that the vessel would earn. In addition daily port expenses, agency charges, legal costs, management fees etc. are being incurred. These are quantified at US $ 2000.00 per day. Thus the daily costs to the applicant is US. S 6000.00 (approximately Rs. 2,70,000.00) per day. The plaintiffs are liable to pay to the applicant Rs. 2,70,000.00 per day for each day the applicant remains under arrest. In view of the same, the applicant has prayed that plaintiff be directed to pay to the applicant damages Rs. 2,70,000.00 per day for each day's detention of the "ASEAN JADE" in this behalf.
8.5. Learned advocate for the defendant No. 3 further submitted that the daily loss to the owners of the applicant vessel is a minimum of US $ 3000.00 per day. This measure of damage is evident from the demurrage rate under the present charter party contract under which the vessel has loaded cargo at Kandla Port. It was submitted that the demurrage represents the daily cost of detention of the vessel and the agreed liquidated damages to be paid to the owners if the vessel is detained by the charterers. It was further submitted that a higher rate than US $ 3000.00 must apply if the detention is by a third party since additional losses are to be taken into account e.g. Port charges, agency fees, management fees, communication expenses etc. In the circumstances a daily loss of US S 6000.00 is claimed by the applicant. Out of this US $3000.00 is the demurrage rate itself.
8.6. It was further submitted that the plaintiff was aware that the vessel had arrived at Kandla Port on 14th June, 2000, as per their own document annexed to their Misc. Civil Application No. 24/2000. The plaintiff waited until 23rd June, 2000, and thereafter applied for an order of arrest. The order was not served on the applicant until 27th June, 2000. Copies of the Plaint and Misc. Civil Application were not served. Thus the plaintiffs deliberately delayed executing the warrant of arrest till the last minute when the vessel was ready to sail, thus causing maximum loss to the applicant. The plaintiffs have obtained the order maliciously and recklessly knowing fully well that the applicant vessel Asean Jade and Defendant No. 1 Asean Crystal are not sister-ships. They have obtained the order of arrest knowing fully well that they have expressly waived their right of arrest by accepting a letter of guarantee in consideration thereof.
9. The defendant No. 3 applicant relied upon Rule 52 contained in Part III of the Bombay High Court (Original Side) Rules, 1957 and the admiralty Jurisdiction rules for regulating the procedure and practice in cases brought before the High Court under the Colonial Courts of Admiralty Act, 1890 (53-54 Victoria Chapter 27). Rule 52 reads as follows :
"52. Where not provided for, rules and practice of O.O.C. J. to apply -- The other proceedings in suits brought in the Court in the exercise of its jurisdiction under the Colonial Courts of Admiralty Act, 1890 not provided for by these Rules shall be regulated by the rules an practice of the Court in suits brought in it in the exercise of its Ordinary Original Civil Jurisdiction."
"53. Suppression of former rules -- The forgoing rules shall apply to suit brought in the Court in the exercise of its Admiralty and vide-Admiralty Jurisdiction in suppression of all former rules."
9.1. It was further submitted that Rule 367 of the Rules of High Court of Bombay (Original Side), 1957 contained in Part I, Chapter 21 will also apply in this behalf which provides for rules regarding motions/ injunctions. Rule 367 reads as under :
"Rule 367 :-- Undertaking to pay damages to be given by party applying for the same -- A party to whom interim relief has been granted shall, before the order is issued unless the Judge otherwise directs, give an undertaking in writing, or through his Advocate to pay such sum by way of damages as the Court may award as compensation in the event of a party affected sustaining prejudice by such order."
9.2. It was further submitted that the Rules of the High Court of Bombay (Original Side), 1957 were framed before the bifurcation of the bilingual State of Bombay on 7th January, 1957. These Rules are framed under Section 129 of the Civil Procedure Code, 1908 read with Clause 37 of the Letters Patent, These rules include rules regulating the procedure and practices of cases brought before the High Court of Bombay under the Colonial Courts of Admiralty Act, 1890. This is the law in force immediately before the appointed day with respect to the practice and procedure in the High Court of Bombay and will therefore apply to the High Court of Gujarat till such rules are framed by the High Court of Gujarat under Section 32 of the Bombay Reorganisation Act, 1960.
9.3. It was further submitted that the Gujarat High Court has framed Gujarat High Court Appellate Side Rules and have accordingly repealed the Bombay High Court Appellate Side Rules but the original side rules have not been repealed (Refer preamble of Gujarat High Court Rules, 1993). Accordingly, the Bombay High Court Original Side Rules still continue to apply.
9.4. The defendant No. 3 relied upon the following judgments in this behalf. In the case of M. V. Elizabeth v. Harwan Investment & Trading Pvt. Ltd., Haneokar House, Swatontapeth, Vasco-De-Gama, Goa reported in AIR 1993 SC 1014. The Hon'ble Supreme Court in para 49 of the said judgment observed as under :
"A ship may be arrested (i) to acquire jurisdiction; or (ii) to obtain security for satisfaction of the claim when decreed; or (iii) in execution of a decree. In the first two cases, the Court has the discretion to insist upon security being furnished by the plaintiff to compensate the defendant in the event of it being found that the arrest was wrongful and was sought and obtained maliciously of in bad faith. The claimant is liable in damages for wrongful arrest. This practice of insisting upon security being furnished by the party seeking arrest of the ship is followed in the United States, Japan and other countries. The reason for the rule is that a wrongful arrest can cause irreparable loss and damages to the shipowner: and he should in that event be compensated by the arresting party, (See Arrest of Ships by Hill, Hosoi and Helmer, 1985)."
9.5. The learned counsel relied upon another judgment of the Hon'ble Supreme Court in the case of Videsh Sanchar Nigam Ltd.. v. M. V. Kapitan Kud reported in (1996) 7 SCC 127 : (AIR 1996 SC 516). In para 7 of the said judgment, the Hon'ble Supreme Court observed as under :
"The crucial question is whether the appellant has made out prima facie case. Rules on Admiralty Jurisdiction in Part III were framed by Bombay High Court to regulate the procedure and practice thereof on the original side of the Bombay High Court. Equally, Original Side Rule 941 is relevant in this regard which provides that party applying under this rule in a suit in rem for arrest of the property shall give an undertaking in writing or through an advocate to pay such sum by way of damages as the Court may award as compensation in the event of a party affected sustaining prejudice by such order. In Mahadeo Savlaram Shelke v. Puna Municipal Corporation (Reported in 1995 AIR SCW 1439), even in case of civil Court, exercising its power under Order 39, Rule 1, this Court held that while granting interim injunction, the civil Court or appellate Court is enjoined to impose as a condition that in the event of the plaintiff failing to prove the case set up and if damages are caused to the defendant due to the injunction granted by the Court, the Court would first ascertain whether the plaintiff would adequately be compensated by damages if injunction is not granted. Equally the Court should also impose condition for payment of damages caused to the defendant in the same proceeding without relegating the parties for a separate suit. The plaintiff should give such an undertaking as a part of the order itself. Rule 954 of Admiralty Rules provides that subject to the provisions of Rule 952 (caveat property not to be released unless notice is given to the caveator), property arrested under a warrant may be ordered to be released -- (i) at the request of the plaintiff, before an appearance in person or a vakalatnama is filed by the defendant; or (ii) on the defendant paying into court the amount claimed in the suit; or (iii) on the defendant giving such security for the amount claimed in the suit as the Court may direct; or (iv) on any other ground that the Court may deem just. Thus a ship arrested under warrant may be released on fulfilment of any of the conditions mentioned hereinbefore. This could be done on the plaintiff showing prima facie best case."
9.6. He has also relied upon the Division Bench judgment of the Bombay High Court in Appeal No. 1151 of 1999 arising out of Admiralty Suit No. 78 of 1999 decided on 12th October, 1999, (Coram; V. K. Sabharwal, CJ (as he was then) and 6. H. Kapadia, J.). In that case, in para 7 the Bombay High Court has held as under :
"It appears from the record that the physical delivery of the vessel was given to M/s. Goyal Traders on 25th February, 1999. It further appears from the record that the vessel was beached on 27th February, 1999, In view of the order of arrest passed by us on 17th September, 1999, learned counsel for M/s. Goyal Traders submits that his clients have suffered the loss of nearly Rs. 2 lacs per day on account of labour remaining idle and the work of the breaking could not be undertaken on account of the order of arrest. Having regard to the circumstances of the case, we direct the Appellant to pay a sum of Rs. 25 lacs as damages to M/s. Goyal Traders, computed at Rs. 1,00,000 per day for 25 days for which the order of arrest of the vessel was continued. M/s. Goyal Traders would be entitled to enforce the undertaking in accordance with law."
MY CONCLUSION :
10. I have considered the copy of the plaint as amended in this behalf. I have also passed the order on 23rd June, 2000, and thereafter I have also considered the application being Misc. Civil Application No. 33/ 2000 filed by the original defendant No. 3 for vacating interim relief. It may be noted that original defendant by filing claim damages in this behalf which was also heard with the main matter.
10.1. I have considered the contentions raised by the plaintiff and defendant Nos. 1 and 2 and also defendant No. 3 and their application in this behalf. In my view the plaintiff has suppressed the material fact and obtained the order of this Court on the basis which was not available with them. The defendant No. 3 has rightly pointed out all these facts in this behalf and stated that the plaintiff has obtained the order of this Court causing great damages to defendant No. 3 in this behalf. The defendants have also pointed out the Rule 52 contained in Part III of the Bombay High Court (Original Side), 1957 and the admiralty jurisdiction rules for regulating the procedure and practice in cases brought before the High Court under the Colonial Courts of Admiralty Act, 1890 (53-54 Victoria Chapter 27) and also Rule 367 of the Rules of High Court of Bombay (Original Side), 1957.
10.2. It is no doubt true that the Gujarat High Court has framed Gujarat High Court Appellate Side Rules and have accordingly repealed the Bombay High Court Appellate Side Rules but the original, side rules have not been repealed and still continue to apply in this behalf.
10.3. I have also considered the record and proceedings particularly order passed and thereafter subsequent order vacating interim relief and submission made by learned advocates for plaintiff, defendant No. 1 and defendant No. 3. In my view the plaintiff originally quantified its claim in the Singapore proceedings at US $ 8,79,190.86, however the plaintiff sought security in a much higher amount of US $1.2 million to cover interest and costs. The plaintiff thereafter accepted security from the owners of the vessel "Asean Crystal" for an amount of US $1.2 million in respect of their alleged claim for damage to their drydock "Kamal VII". In my view the Asean Jade is admittedly owned by Golden Century Maritime Pvt. Ltd. Singapore whereas the vessel "Asean Crystal" now called "Asean Mariner" was at the relevant time in June, 1998 admittedly owned by Universal Maritime Shipping Ltd. S. A. Panama. In view of this fact the vessel Asean Jade is not and never was a sister-ship of "Asean Crystal" as both vessels Were owned by two separate corporate entities the former by a Singapore registered company and the latter by a company incorporated in Panama.
10.4. In view of the aforesaid facts the contention of the plaintiff that these two vessels are sister-ships and in the same ownership is not wholly right. In view of the earlier proceedings in the Singapore Court, the plaintiffs have expressly waived and given up their rights to seek an arrest of any vessel in the same ownership i.e. a sister-ship.
PRINCIPAL REGARDING DAMAGES:
10.5. In my view damage means the harm or loss suffered or presumed to be suffered by a person as a result of some wrongful act of another. The sum of money awarded by a Court to compensate damage is called damages. Where a party suffers by a breach of contract, he is entitled, at all events to claim damages therefor, though in some cases, he may be entitled to the equitable reliefs in this behalf. The only right which he has is the right to sue for damages for the injury he has sustained. He gets compensation as a result of the fiat of the Court. The rule of the common law is that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation with respect to damages, as if the contract had been performed.
10.5(A). In this case the person was about to sail the ship but because of the order of this Court which has been obtained by the plaintiff the defendant has suffered a loss. The defendant in his affidavit has given reasons as to why he has suffered a loss from the point of view of presumption of damage.
10.5(B). The rights are classified into (1) absolute and (2) qualified, when an absolute right is violated the law conclusively presumes damage although the person wronged may have suffered no pecuniary loss whatsoever. The damage so presumed is called legal damage, violation of absolutes right is, therefore, actionable per se, i.e. without proof of any damage. In case of qualified rights, there is no presumption of legal damage and the violation of suck rights is actionable only on proof of actual or special damage. In other words, in case of an absolute right, the injury or wrong, i.e. the tortious action, is complete the moment the right is violated irrespective of whether it is accompanied by any actual damage, whereas in case of a qualified right, the injury or wrong is not complete unless the violation of the right results in actual or special damage.
10.5(C). Here the defendant is able to prove special damages which are those resulting from wrongful order of the Court under some special circumstances though in addition to general damage. In these circumstances the defendant has been able to prove the special damages in this behalf and therefore he is entitled for damages in this behalf.
10.6. By damnum is meant damage in the substantial sense of money, loss of comfort, service, health, or the like. By injuries is meant a tortious act; it need not be wilful and malicious: for though it be accidental, if it be tortious, an action will lie. In cases of injuria sine damno, i.e. the infringement of an absolute private right without any actual loss or damage, the person whose right is infringed has a cause of action. Every person has an absolute right to his property, to the immunity of his person, and to his liberty, and an infringement of this right is actionable per se.
10.7. In my view ordinary damages are awarded where it is necessary to compensate the plaintiff fairly for the injury he has in fact sustained. These are also called compensatory damages. Whatever sum is awarded, whether large or small, must afford a fair measure of compensation to the plaintiff with reference to the actual harm sustained by him. The law does not aim at restitution but compensation, and the true test is, what sum would afford, under the circumstances of the particular case, a fair and reasonable compensation to the party wronged for the injury done to him, the plaintiffs own estimate being regarded as the maximum limit. The measure of reparation or damages for any injury should be assessed as nearly as possible at a sum of money which would put the injured party in the same position as he would have been in if he would not have sustained the injury.
10.8. I have considered Article 3(1) of the Brussels Convention, 1952 and also Rule 52 of the Colonial Courts of Admiralty Act, 1890 (53-54 Victoria Chapter 27), Bombay High Court Original Side Rules, 1957 and also Rule 367 of the Rules of the High Court of Bombay (Original Side), 1957. I have also considered the judgment of the Hon'ble Apex Court in the case of Elizabeth (AIR 1993 SC 1014) (supra) which states that the plaintiff to compensate the defendant in the event of it being found that the arrest was wrongful and was sought and obtained maliciously or in bad faith. The claimant is liable in damages for wrongful arrest. It has also stated that the wrongful arrest cause irreparable loss and damages to the ship owner. I have also considered the case of Videsh Sanchar Nigam Ltd.. (AIR 1996 SC 516) (supra) where the Hon'ble Apex Court also held that the plaintiff has to give undertaking in writing or through an advocate to pay such sum by way of damages as the Court may award as compensation in the event of a party affected sustaining prejudice by such order. I have also considered the order of the Bombay High Court wherein identical matter the Bombay High Court also awarded damages for the ship in question and, therefore, in my view the plaintiff is liable to compensate the defendant as the arrest of the ship was found to be wrongful and is liable to pay damages to defendant for wrongful arrest. The wrongful arrest caused irreparable loss and damages to the ship owner. I have calculated damages as per figures given by the defendant in this behalf which I found to be just and reasonable.
11. In my view the vessel Asean Jade was about to sail on 27th June, 2000, but could not do so in view of the order of the arrest. The Asean Jade has caused a loss of US $4000.00 per day to its owner which includes the daily standing costs towards maintenance of the vessel and the crew. This is equivalent to the current charter hire that the vessel would earn. In addition to daily port expenses, agency charges, legal costs, management fees are being incurred and these are quantified at US $2000.00 per day. In view of the same the plaintiffs are liable to pay Rs. 2,70,000.00 per day detention of vessel and as the vessel arrested for 8 days therefore they are liable to pay Rs. 21,60,000.00 in this behalf.
12. In view of the same, Prayer 6 (b) of Misc. Civil Application No. 33 of 2000 is allowed. This Misc. Civil Application stands disposed of accordingly with no order as to costs.
13. After pronouncement of the judgment, Mr. D. D. Vyas, learned Senior Advocate has requested to stay the judgment of this Court for a period of four weeks.
Accordingly the judgment of this Court will not be implemented till 31st March, 2002.