Gujarat High Court
Metron Middle East Fze vs Mt Tulip (Imo No 9240914) on 28 September, 2020
Author: A.Y. Kogje
Bench: A.Y. Kogje
C/AS/31/2020 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/ADMIRALTY SUIT NO. 31 of 2020
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METRON MIDDLE EAST FZE
Versus
MT TULIP (IMO NO 9240914)
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Appearance:
MR MANAV A MEHTA(3246) for the Defendant(s) No. 1
NOTICE NOT RECD BACK(3) for the Defendant(s) No. 2
MS PAURAMI B. SHETH(841) for the Plaintiff(s) No. 1
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CORAM: HONOURABLE MR. JUSTICE A.Y. KOGJE
Date : 28/09/2020
ORAL ORDER
1. The present Admiralty Suit is filed by the plaintiff to pass an order and decree in favour of the plaintiff and against the defendants in the sum of USD 3,340,900 with interest at the rate of 18% per annum from the date of sum till its realization against the defendants as per the particulars of claim.
2. In this Admiralty Suit the Plaintiffs have moved an Application for arrest of the first Defendant vessel MT TULIP which is at Kandla Port, to secure their maritime claim in respect of loss or damage to cargo. Defendant No 2 is the owner of the Defendant No. 1 Vessel. The Plaintiff is the charterer of the vessel and is in possession of, and holder of all three original Bills of lading covering the entire cargo and confirm and undertakes that the said Bills of Lading have not been Page 1 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020 C/AS/31/2020 ORDER endorsed and/or negotiated in favour of the consignee in the bills of Lading or any other party. The Plaintiff confirms, undertakes and warrants that it is the only party entitled to make any claim s against the defendants under the bills of lading. The Defendants appeared on 18 August 2020 and gave an undertaking that the vessel MT TULIP will not sail from Kandla Port without the permission of this Court. This forms part of the order dated 18 August 2020.
3. By the order dated 18 August 2020 the Plaintiffs were permitted to appoint a Surveyor to go on board the vessel at Kandla Port to inspect the cargo and take samples and prepare a report. Having done this on 21 August 2020, the Plaintiffs have placed on record the Survey Report dated 29 August 2020.
4. Based on the survey report the Plaintiffs have quantified the extent of their loss and damage and have reduced their claim to USD 532,583.00 as set out in Paragraph 5 of the Additional Affidavit dated 1 st September 2020. Plaintiffs therefore seek security in this amount of USD 532,583.00. Therefor both the parties have arrived at agreed terms for making interim arrangements pending the suit.
5. The Defendants are agreeable to secure the Page 2 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020 C/AS/31/2020 ORDER Plaintiffs claim by providing a Bank Guarantee of a nationalised bank in the amount of USD 382,583.00 plus a Corporate Guarantee in the sum of USD 150,000.00 without prejudice to their rights and contentions. The two guarantees shall be provided within 7 banking days from date of this Order. The Defendant shall be at liberty to apply for extension of time to submit the Bank Guarantee in the event of procedural delays faced in obtaining the Bank Guarantee in view of the Covid-19 situation.
6. Under the bills of lading, the cargo on board the ship was required to be discharged and delivered at Mumbai Port. However, in view of the delay and in order to mitigate their losses the Plaintiff agrees to take delivery of the cargo on board at Kandla port instead of Mumbai. All costs and charges to borne as per the charter party dated 19 May 2020. Both parties agree that the present voyage shall stand terminated at Kandla upon discharge of the cargo. Both parties also agree that the charterparty dated 19 May 2020 shall stand mutually terminated upon delivery of the cargo at Kandla and the second voyage is not required to be performed. There shall be no claim by either party arising out of the termination of the Charter Party dated 19th May 2020.
7. Defendant No. 1 vessel shall give notice to charterers that the vessel is ready to proceed to berth Page 3 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020 C/AS/31/2020 ORDER for discharge. Defendant No.2 confirms that there is no restriction or impediment from any authority or otherwise for the vessel to proceed to berth and discharge the cargo. Upon receipt of this notice, Plaintiffs shall arrange for berth and inform Defendants whereupon the vessel shall forthwith proceed to berth and discharge the entire cargo on board. There will be no claim for demurrage and / or detention and / or dispatch by the parties at the load port and the discharge port.
8. The Defendants require the Plaintiffs to provide a General Average Bond and Guarantee by their insurers prior to delivery of the cargo at Kandla as per the General Average declaration dated 14 July 2020 and the documents annexed to the same which are at Exhibit F of the Plaint. The Plaintiffs have no objection to provide the bond and guarantee before the commencement of delivery of the cargo at Kandla as per the formats provided at Exhibit F without prejudice to their rights and contentions. Any delay in discharge of cargo on account of the General Average Security not being in conformity with Exhibit F of the Plaint and/or furnishing of General Average Security in time shall be to the Plaintiff's account.
9. In the circumstances the following order is passed:
Page 4 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020 C/AS/31/2020 ORDER
I. In lieu of the arrest order and in view of the undertaking dated 18 August 2020 furnished by Defendant No. 2, the Defendant vessel shall proceed to berth and discharge the cargo on board to the Plaintiff. The cargo will be discharged to the Plaintiff on presentation of the original bills of lading. The Plaintiff undertakes that on one original bill of lading being surrendered to Defendant No. 2, the other two originals shall be void and stand discharged. After delivery and discharge of cargo at Kandla, the Defendant Vessel shall not leave Kandla Port/OPL till such time that the Bank Guarantee and Corporate Guarantee is furnished by Defendant no. 2.
II. Upon completion of discharge and upon the Defendants furnishing a Bank Guarantee in the sum of USD 382,583.00 or its equivalent in Indian Rupees and a Corporate Guarantee in the sum of USD 150,000.00 or its equivalent in Indian Rupees, the undertaking dated 18th August 2020 of the Defendant no. 2 shall stand discharged. The bank guarantee and the corporate guarantee shall be provided within 7 banking days and shall be without prejudice to the rights and contentions of the Defendants. In event of any procedural delay by the bank in issuing the Bank Guarantee the Defendants is permitted to seek extension for furnishing the same.Page 5 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020 C/AS/31/2020 ORDER
III. The Corporate Guarantee shall be provided by the Managing Director of Defendant No.2 and shall be supported by a Board Resolution. The Corporate Guarantee shall also contain an Undertaking by the Managing Director that he shall be personally liable under the guarantee in the event of any default made by the Company, Defendant No.2.
IV. The Plaintiffs shall submit an Average Bond signed by them and a General Average Guarantee signed by the cargo insurers as per the format provided by the Defendants alongwith the General Average Declaration dated 14 July 2020 which is on record and marked as Exhibit F to the Plaint. The Bond and Guarantee shall be provided expressly without prejudice to the rights, contentions and defenses of the Plaintiff and their insurers including their right to challenge the Declaration of General Average and liability to contribute. This Average Bond and Guarantee shall be submitted by the Plaintiffs to the Defendants and / or their average adjustors before commencement of delivery of the cargo on board at the Port of Kandla.
V. Since according to the Plaintiffs the balance cargo of Methanol on board the vessel, which is approximately 1224.64 mt, is contaminated, Plaintiff shall sell the Page 6 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020 C/AS/31/2020 ORDER same after delivery at Kandla Port within 2 weeks of delivery of the cargo to the Plaintiff. The Plaintiffs shall give prior notice to Defendant No.2 before selling the said contaminated cargo. In the event Defendant No.2 is able to obtain a better price then Defendant No.2 shall communicate the same to the Plaintiffs within 3 days of the notice from the Plaintiff and the said cargo will be sold accordingly and the amount paid directly by the buyer to the Plaintiff. The Plaintiff agrees that they shall provide all documents / Invoices as may be necessary to the buyer suggested by the Defendant no. 2 to facilitate purchase of the cargo. If the buyer suggested by Defendant No.2 is not in a position to make payment within 3 banking days in INR (Indian Rupees) the Plaintiff shall sell the cargo to their buyer at best available price. Any amount realized from the sale of the said contaminated cargo shall be paid over to and appropriated by the Plaintiffs against their suit claim and the security provided by Defendant No.2 shall be reduced to that extent. Out of 1224.64 MT of Methanol on board the vessel, the Defendants submits that approximately 500 Mts of cargo in tanks 1P and 1S ought to be in sound condition. In order to realize the best possible value, the Plaintiff shall hold and store that the cargo from tanks 1P and 1S in a Page 7 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020 C/AS/31/2020 ORDER separate tank and not mix with the balance cargo approximately 724.64 Mts.
VI. Both parties shall appoint Surveyors to carry out a joint survey of the cargo on board the vessel on arrival of the vessel at Kandla Port and prior to discharge. The Defendants shall bear the costs of the Plaintiff's surveyor and pay the same directly to the surveyor.
VII It is made clear that if there is any loss or damage to the remaining cargo on board subsequent to the survey carried out by the Plaintiff's Surveyor at Kandla on 21 August 2020 and prior to delivery of the same at Kandla Port, it shall be open to the Plaintiffs to claim the same from the Defendants and adopt such legal remedies and to obtain security in accordance with law.
10. Liberty to the Plaintiff to apply for further orders in the event the Defendant vessel is not in a position to proceed from Kandla OPL to Kandla Port for any reason whatsoever for discharge of cargo.
11. As the order is passed on broad consensus of the parties both parties are expected to comply with their respective part.
12. The order is passed without prejudice to rights of both the parties including but not limited to the Page 8 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020 C/AS/31/2020 ORDER right of Defendants to move an appropriate application for return and/ or reduction of security.
S.O. to 22.10.2020.
(A.Y. KOGJE, J) CAROLINE Page 9 of 9 Downloaded on : Mon Sep 28 22:29:33 IST 2020