Bombay High Court
Wizdoms Naik International Ltd vs Dsv Gerimal (Imo No.7932240) on 12 October, 2020
Author: B.P. Colabawalla
Bench: B.P. Colabawalla
(02)NMCD_1891.18_COMAS46.16.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Dhanappa ADMIRALTY & VICE ADMIRALTY JURISDICTION
I. Koshti
Digitally signed by
NOTICE OF MOTION NO. 1891 OF 2018
Dhanappa I. Koshti IN
Date: 2020.10.12
18:17:55 +0530 COMMERCIAL ADMIRALTY SUIT NO . 46 OF 2018
DSV Gerimal (IMO No.7932240) ... Applicant/Defd.
In the matter of :
Wizdoms Naik International Limited ... Plaintiff
Vs
DSV Gerimal (IMO No.7932240) ... Defendant
Mr. Prashant Pratap, senior counsel with Mr. Nirav Shroff and Mr.
Prashant Ashar i/b Crawford Bayley & Co. for the Applicant.
Mr. Prathamesh Kamat with Mr. Zoeb Cutlerywalla i/b Kochhar & Co. for
the Plaintiff.
CORAM : B.P. COLABAWALLA, J.
MONDAY, 12TH OCTOBER, 2020 P.C. :
1. The above Notice of Motion has been filed by the applicant Halani International Limited (for short "Halani") who are the owners of the defendant-vessel DSV Gerimal (IMO No.7932240) [for SR Pasha, Sr PS Page 1 of 50 (02)NMCD_1891.18_COMAS46.16.doc short "the defendant-vessel"] for vacating the ex-parte order of arrest of the defendant-vessel passed on 8th June, 2018, and for damages for wrongful arrest. In the alternative, it is prayed that the defendant-vessel be permitted to sail under arrest within the territorial waters of India and Bombay High, subject to such terms and conditions this Court may deem fit and proper.
2. The brief facts that give rise to the present controversy are that the plaintiff is the disponent owner of a vessel known as "OCEAN 303" which is an all-weather barge. The head owner of the said OCEAN 303 is one Celestial Vision Limited. Halani is the owner of the defendant-vessel, which is a diving support vessel.
3. The plaintiff entered into a time charter party dated 29th December, 2016 (for short the "charter party") with Halani under which the vessel OCEAN 303 was hired on time charter by Halani from the plaintiff for a firm period of 165 days at the rate of USD 10,500/- per day. The date of delivery of the vessel OCEAN 303 by the plaintiff to Halani was 23rd December 2016, off International waters, Mumbai. The charter party period was for 165 days and, by SR Pasha, Sr PS Page 2 of 50 (02)NMCD_1891.18_COMAS46.16.doc the efflux of time, the same came to an end on 5th June, 2017. As contemplated in the charter party, once the time charter expired on 5th June, 2017, OCEAN 303 was required to be re-delivered by Halani to the plaintiff at the UAE Port. In fact, clause 39.2.3 of the charter party provided that 13 days free period will be given prior to taking re-delivery of OCEAN 303 at UAE. Credit note for this period was also to be issued separately. This period of 13 days was provided because it was common ground between the parties that the voyage from Mumbai to UAE for the purposes of re-delivery would take 13 days.
4. It is an admitted position that the all hire charges upto 5th June, 2017 were not paid by Halani to the plaintiff. Even after the expiry of the charter party by the efflux of time (which was till 5th June, 2017), the said vessel OCEAN 303 continued to be with Halani beyond 5th June, 2017 without re-delivering the same at UAE Port as per the terms of the charter party. Halani neither extended the charter party nor paid the hire for the period for which the vessel OCEAN 303 continued to be with Halani in Mumbai till 20th October, 2017, which is when the plaintiff's charter-party with its head owners SR Pasha, Sr PS Page 3 of 50 (02)NMCD_1891.18_COMAS46.16.doc [Celestial Vision Limited] expired/came to an end.
5. In these circumstances, the plaintiff instituted the above Admiralty Suit against the defendant-vessel (which is owned by Halani) for recovery of its claims, as more particularly set out in Exhibit "S" to the Plaint. In a nutshell, the claims are as follows:
(a) For non-payment of the charter hire by the owners of the Defendant vessel i.e. Halani as per the invoices (Exhibit "E" to Exhibit "R" of the Plaint) amounting to USD 5,39,698.65 along with 8% interest from 5th June 2017 till payment / realization;
(b) charter hire for the period of 6th June 2017 to 20th October 2017 (at USD 10,500 per day) amounting to USD 14,38,500 along with 8% interest from 6th June 2017 till payment / realization; and
(c) the legal costs of USD 15,000 and poundage of 1% amounting to USD 21,082.99 (inadvertently calculated as USD 2,10,829.954 in the particulars of claim).SR Pasha, Sr PS Page 4 of 50
(02)NMCD_1891.18_COMAS46.16.doc
6. As mentioned earlier, after the Suit was filed, an application was made for arrest of the defendant-vessel. Accordingly, on 8th June, 2018 an order of arrest was passed under which the defendant-vessel was arrested. It is to vacate this ex-parte order of arrest that the present Notice of Motion has been filed by the applicant / defendant as well as for damages for wrongful arrest.
7. In this factual backdrop, Mr. Pratap, the learned senior counsel appearing on behalf of the defendant/Halani, submitted that the plaintiff has, in principle, made two claims. The first is for hire charges upto 5th June, 2017 in the amount of USD 5,39,698.25. Mr. Pratap submitted that according to the plaintiff these hire charges remain unpaid in respect of the duration of the charter which ended on 5th June, 2017. The second and the larger claim, is for hire charges from 6th June, 2017 till 20th October, 2017 in the sum of USD 14,38,500/-. Mr. Pratap submitted that the second and larger claim of USD 14,38,500/- is on the basis that the defendant failed to re-
deliver the said vessel OCEAN 303 at UAE Port at the end of the charter period.
SR Pasha, Sr PS Page 5 of 50
(02)NMCD_1891.18_COMAS46.16.doc
8. Mr. Pratap submitted that dealing with the second and larger claim (for USD 14,38,500/-), a question of law arises. The question of law would be as to "what is the measure of damages that the plaintiff is entitled to claim on account of a breach by the charterer of their obligation to re-deliver the vessel OCEAN 303 at UAE?". According to Mr. Pratap, the correct measure of damages for breach on the part of Halani to re-deliver the vessel OCEAN 303 at UAE Port (at the end of the charter period on 5th June, 2017) is the charter hire that the plaintiff would have earned, had the vessel been re-delivered by Halani at the UAE Port. In other words, it would mean that the plaintiff would be entitled to charter hire for the period it would take the vessel to perform a voyage from Mumbai to UAE and nothing more. In the facts of the present case, Mr. Pratap submitted that it is common ground that this period would be 13 days. However, clause 39.2.3 of the charter-party provides for 13 days' free period for the purpose of re-delivery of the vessel OCEAN 303 to the UAE Port. Consequently, whilst in the ordinary course, the plaintiff would have been entitled to 13 days charter hire as compensation for breach by Halani of their obligation to re-deliver the vessel OCEAN 303 at the UAE Port, in view of clause 39.2.3, the SR Pasha, Sr PS Page 6 of 50 (02)NMCD_1891.18_COMAS46.16.doc plaintiff is not even entitled to claim this amount. Mr. Pratap submitted that in these circumstances, the plaintiff can have no claim in law for the failure on the part of Halani to re-deliver the vessel OCEAN 303 at the UAE Port. Consequently, the claim of the plaintiff for hire charges for the period 6th June, 2017 till 20th October, 2017 for USD 14,38,500/-, is wholly untenable and cannot be taken into consideration for the purposes of arrest or for furnishing security for releasing the defendant-vessel from the orders of arrest, was the submission of Mr. Pratap.
9. Mr. Pratap submitted that the aforesaid proposition is well settled by a judgment of the English High Court in the case of THE "RIJN" [(1981) Vol. 2, Lloyds Law Reports, page 267]. Mr. Pratap submitted that in the aforesaid case also, there was a time charter contract where re-delivery of the vessel was to be at a safe Port South Japan (not North of Tokyo Bay) / Singapore range. The charterers terminated the charter party at the Port of Galveston, USA. Disputes arose between the parties as to what would be the damages that the owners would be entitled to, for failure on the part of the charterers to re-deliver the vessel at a Port in South Japan / SR Pasha, Sr PS Page 7 of 50 (02)NMCD_1891.18_COMAS46.16.doc Singapore range. In these facts, the English High Court held that the measure of damages requires the charterer to restore to the owner, the hire which he would have earned if the voyage had, in fact, been performed to the re-delivery Port. It is on this basis that damages were awarded of the cost of a notional final voyage from Galveston, USA to a Port in Japan. Mr. Pratap submitted that applying the aforesaid principle to the facts of the present case, the plaintiff would be entitled to compensation or damages equivalent to the hire charges which the plaintiff would have earned if the vessel had in fact been delivered at the UAE Port. He submitted that it is common ground that this voyage would have taken 13 days. Thus, at the highest, the plaintiff would have been entitled to 13 days hire charges as compensation. However, as mentioned earlier, in view of clause 39.2.3 (providing for 13 days' free period for re-delivery at UAE Port), the plaintiff was not entitled to even this compensation / damages. He, therefore, once again reiterated that the plaintiff was not entitled to any hire charges for the period 6th June, 2017 till 20th October, 2017 and which the plaintiff had quantified at USD 14,38,500/-.
SR Pasha, Sr PS Page 8 of 50
(02)NMCD_1891.18_COMAS46.16.doc
10. To bolster this argument, Mr. Pratap submitted that the plaintiff has not raised a single Invoice for charter hire charges for the period 6th June, 2017 to 20th October, 2017 even though the charter party clearly provides that an Invoice has to be raised after completion of every 15 days charter and payment to be made within 7 days of receipt of the Invoice. He submitted that not a single Invoice is raised by the plaintiff for the aforesaid period (6th June, 2017 to 20th October, 2017) and which clearly goes to show that even the plaintiff clearly understood that they were not entitled to any hire charges for the aforesaid period. Over and above this, Mr. Pratap submitted that even in the Statement of Account submitted by the plaintiff as late as on 6th February, 2018 (Exhibit "H" of the Notice of Motion), the outstanding balance claimed by the plaintiff is only USD 5,47,750/- which covers the charter hire upto 5th June, 2017 and interest thereon. He submitted that this is another telling factor which clearly goes to show that the plaintiffs themselves were well aware that they did not have a legitimate claim for hire charges for the period 6th June, 2017 to 20th October, 2017.
11. Mr. Pratap thereafter argued that even with regard to the SR Pasha, Sr PS Page 9 of 50 (02)NMCD_1891.18_COMAS46.16.doc first claim, namely, for charter hire upto 5th June, 2017 (in the amount of USD 5,39,698.65) the plaintiff was not entitled to claim the same as the plaintiff had not come to Court with clean hands, suppressed vital documents and correspondence and, therefore, disentitled themselves to any equitable interim relief in respect of their entire claim (which includes the first claim as well). Mr. Pratap submitted that it was the obligation of the plaintiff to make a full and frank disclosure before they applied for an ex-parte order of arrest and which they had failed to do. Mr. Pratap submitted that the plaintiff's acts of suppression and making incorrect statements is clearly evidenced by the following:
(a) Soon after the time charter party dated 29th December 2016 came to an end on 5th June 2017, the plaintiff and the owners of the defendant-vessel entered into negotiations for a fresh time charter party. The correspondence exchanged in regard to these negotiations are set out in the additional affidavit on behalf of the applicant / defendant dated 4th October, 2020 (for short the "Additional Affidavit"). None of this correspondence is disclosed.
SR Pasha, Sr PS Page 10 of 50
(02)NMCD_1891.18_COMAS46.16.doc
(b) On 30th June, 2017 (Exhibit-B page 22 of the Additional Affidavit), the plaintiff enquired about further charter by Halani for the coming season in October 2017. This would not have been the case had the Charter party dated 29th December 2016 not come to an end but continued to be in force as claimed by the plaintiff.
(c) On 27th July, 2017 (Exhibit-C page 24 of the Additional Affidavit) the plaintiff provided a draft of the fresh charter party commencing from October 2017 to the defendant.
(d) On 1st September 2017 (Exhibit D page 25 of the Additional Affidavit) the plaintiff, in fact, stated that they have overlooked the fact that the vessel OCEAN 303 was to be re-delivered at UAE around 18th June 2017 with a view to extending best cooperation. This was stated in light of the fresh charter party being negotiated between the parties. This clearly shows that the plaintiff had waived their right, if any, in respect of the vessel not being re-delivered at UAE Port. In light of this, the plaintiff could never have made the claim for charter to continue from 6th June, 2017 until 20th October, 2017.
SR Pasha, Sr PS Page 11 of 50
(02)NMCD_1891.18_COMAS46.16.doc
(e) On 14th September, 2017 (Exhibit E page 27 of the Additional Affidavit), the plaintiff asked for a modification of the delivery date under the fresh charter party to 5th October, 2017 - 10th October 2017 in Mumbai.
(f) A fresh charter party was finalized and reminders were sent on 15th September 2017 and 21st September, 2017 by the defendant to the plaintiff for the charter party to be signed (Exhibit G page 29 of the Additional Affidavit).
(g) On 3rd October, 2017, the plaintiff responded to say that the charter party has been sent to the signatory for signing, but the signatory was presently travelling (Exhibit J page 32 of the Additional Affidavit).
12. Mr Pratap submitted that all this correspondence confirms beyond doubt that there was a fresh contract between the parties negotiated, finalized and terms agreed, which was binding and enforceable. Only the formal signature remained and it was also confirmed by the plaintiff that the charter party has been sent to the signing authority for signature, but the concerned person was SR Pasha, Sr PS Page 12 of 50 (02)NMCD_1891.18_COMAS46.16.doc travelling. He submitted that all of this correspondence is suppressed and in fact, in paragraph 71 of the Plaint it is falsely averred that Halani neither opted for a fresh charter nor delivered the vessel as per the terms of the charter party dated 29th December 2016. This is false to the knowledge of the plaintiff as Halani had opted for a fresh charter and this was agreed to by the plaintiff after negotiations and only the formal signature of the plaintiff remained and that too because the plaintiff's signing authority was travelling, was the submission of Mr. Pratap. He thereafter brought to my attention that the plaintiff's vessel (OCEAN 303) was thereafter detained by an order of this Hon'ble Court dated 29th September 2017 in a section 9 application (under the Arbitration and Conciliation Act, 1996) at the instance of a third party who had a claim against the plaintiff. Thus, even though the vessel OCEAN 303 was detained on account of a claim against the plaintiff, it continues to claim charter hire even after this order of detention as pleaded in paragraph 74 page 26 of the Plaint. Mr. Pratap, therefore, submitted that the plaintiff having suppressed the above correspondence and having made incorrect and misleading statements in the Plaint, coupled with the fact that the ex-parte order was obtained without making a full SR Pasha, Sr PS Page 13 of 50 (02)NMCD_1891.18_COMAS46.16.doc and frank disclosure of all material facts, the order of arrest dated 8th June, 2018 ought to be vacated unconditionally.
13. In support of this proposition, Mr. Pratap relied upon a judgment of the English Court of Appeal in THE "VASSO" (Formerly "ANDRIA") [(1984) Vol. 1 Lloyds Law Reports, page 235], where the court holds "It is axiomatic that in ex parte proceedings there should be full and frank disclosure to the Court of facts known to the Applicant, and that failure to make such disclosure may result in the discharge of any order made upon the ex parte application, even though the facts were such that, with full disclosure, an order would have been justified. In our judgment, exactly the same applies in the case of an ex parte application for arrest of a ship where, as here, there has not been full disclosure of the material facts to the court."
14. In the alternative, Mr. Pratap submitted that even if the Court is of the opinion that there has not been any suppression or a failure to disclose material facts, then, the security to be furnished for release of the defendant-vessel be reduced to the sum of USD SR Pasha, Sr PS Page 14 of 50 (02)NMCD_1891.18_COMAS46.16.doc 5,39,698.65 being the claim for charter hire upto 5th June, 2017. This is for the simple reason that clearly the second and larger claim for USD 14,38,500/- is unsustainable in law. If the Court is of the opinion that the arrest ought to be continued, then, Mr. Pratap submitted that this Court consider prayer clause (b) of the Notice of Motion and permit the defendant-vessel to sail under arrest within the territorial waters of India and Bombay High. He submitted that in such a situation, the defendant-vessel shall be used by Halani for off-shore work of ONGC at Bombay High. He submitted that Halani shall undertake not to sell, transfer or alienate the defendant-vessel DSV Gerimal (IMO No.7932240) during the period the vessel is under arrest and shall bring the said vessel to Bombay Port as and when ordered by this Court.
15. Lastly, Mr. Pratap submitted that though no Written Statement is yet filed on behalf of the defendant, it has a legitimate counter claim against the plaintiff for repudiation and/or non- performance of the fresh charter agreed between the parties as evidenced by the correspondence exchanged and which was suppressed by the plaintiff. He submitted that the defendant had to SR Pasha, Sr PS Page 15 of 50 (02)NMCD_1891.18_COMAS46.16.doc hire a substitute vessel to perform the ONGC work and suffered substantial losses. The details of the counter claim are set out in the Additional Affidavit dated 4th October, 2020 aggregating to USD 9,17,612/-. Thus, any reliefs granted in the present Notice of Motion would be without prejudice to the defendant's counter claim, was the submission of Mr. Pratap.
16. On the other hand, Mr. Kamat, the learned counsel appearing on behalf of the plaintiff, submitted that there is no merit in any of the arguments canvassed by Mr. Pratap and the Notice of Motion ought to be dismissed with compensatory costs as the same is a complete abuse of the process of the Court. Mr. Kamat submitted that as far as the first claim for hire charges for the period upto 5th June, 2017 is concerned (for USD 5,39,698.65), the same has been categorically, unequivocally and unconditionally admitted/accepted by Halani. In this regard, he brought to my attention, paragraph 21(b) of the affidavit-in-support of the above Notice of Motion read with the e-mail dated 14th October, 2017 (Exhibit "F" to the present Notice of Motion). He submitted that this amount is further reflected in the ledger account of Halani which is an attachment to the e-mail SR Pasha, Sr PS Page 16 of 50 (02)NMCD_1891.18_COMAS46.16.doc dated 14th October, 2017 and which is an e-mail addressed by Halani to the plaintiff. Mr. Kamat submitted that even during the course of arguments, no dispute is raised by Mr. Pratap on the quantum or the veracity of this claim. The only argument advanced with regard to the payment of the said amount (USD 5,39,698.65) is that the same is not payable on account of a purported suppression by the plaintiff in its pleadings. Mr. Kamat submitted that this argument is unsustainable as admittedly, there is neither any suppression nor dispute pertaining to this admitted claim. He submitted that, therefore, assuming whilst denying that there is any purported suppression with reference to the second and larger claim (for USD 14,38,500/-), the same cannot absolve the defendant-vessel and/or Halani from paying the said admitted amount of USD 5,39,698.65 to the plaintiff together with interest thereon at the rate of 8% per annum (which is admittedly the rate of interest mentioned in Box 25 of the charter party, read with clause 12(e) thereof).
17. As far as the aspect of suppression is concerned, Mr. Kamat submitted that there is no suppression of any material or relevant facts. He submitted that the present Notice of Motion and SR Pasha, Sr PS Page 17 of 50 (02)NMCD_1891.18_COMAS46.16.doc the Additional Affidavit filed by Halani, is on the basis that there is not a single correspondence on record to indicate that post 5th June, 2017, the plaintiff demanded delivery or re-delivery of the vessel OCEAN 303 or that there were negotiations going on for entering into a fresh charter party for the coming season starting from October, 2017. This position was even strongly argued at the time of arguments on behalf of Halani. Mr. Kamat submitted that this contention is belied by the following documents:
(a) letter dated 7th June 2017 (Tab 36 Page 81 of the Compilation of Documents);
(b) email dated 30th June 2017 (Tab 38 Page 83 of the Compilation of Documents);
(c) email dated 1st September 2017 (Exhibit B at page 77 of the affidavit in reply dated 31st July 2018 of the plaintiff to the present Notice of Motion).
18. Mr. Kamat submitted that all material and relevant documents have, in fact, been disclosed by the plaintiff in the pleadings. As far as the documents mentioned at paragraph 16(g) of SR Pasha, Sr PS Page 18 of 50 (02)NMCD_1891.18_COMAS46.16.doc the Note tendered on behalf of the defendant, namely, the letter/e- mail dated 3rd October, 2017, Mr. Kamat submitted that the same is irrelevant in the light of the e-mail addressed by the owners of the defendant-vessel (Halani) to the plaintiff on 9th October, 2017. Mr. Kamat submitted that on the basis of the document at paragraph 16(g) of the defendant's Note (email dated 3rd October, 2017), it was sought to be contended that on 3rd October, 2017, the proposed charter party was final and signed by Halani and was only pending for signatures of the plaintiff. However, the e-mail dated 9th October, 2017 addressed by Halani to the Plaintiff (Page 35 of the Additional Affidavit), makes it abundantly clear that the charter party contemplated in the e-mail dated 3rd October, 2017, was in fact not final and was required to be re-looked and re-worked, even according to Halani. This completely falsifies and demolishes the stand of Halani that there was any suppression of documents / facts by the plaintiff, especially when both parties were aware that the charter party sought to be negotiated between the parties was not final and concluded. Mr. Kamat submitted that there were negotiations going on between the parties for entering into a fresh charter party has been duly disclosed by the plaintiff and hence there was no SR Pasha, Sr PS Page 19 of 50 (02)NMCD_1891.18_COMAS46.16.doc suppression as alleged by Halani. He submitted that just because there were negotiations going on for a fresh charter party for the season starting from October, 2017 does not mean that the plaintiff was not entitled to claim hire charges for the period 6th June, 2017 to 20th October, 2017. The right to claim the same was expressly reserved by the plaintiff in its e-mail dated 30th June, 2017 which clearly states that OCEAN 303 is required to be delivered to UAE Port upon completion of the project at Mumbai i.e. within 13 days from 5th June, 2017. However, the said vessel is still in Mumbai and the plaintiff reserves its right in line with the signed CPA dated 29th December, 2016, until the vessel is re-delivered at UAE. This e-mail of 30th June, 2017 is also disclosed by the plaintiff in the Plaint at Tab-38 was the submission of Mr. Kamat. He, therefore, submitted that this entire argument about suppression is a complete bogey and only to create prejudice in the mind of the Court.
19. As far as the second and the larger claim is concerned, namely, charter hire charges from 6th June, 2017 to 20th October, 2017 (for USD 14,38,500/-), Mr. Kamat submitted that this claim is fully sustainable in law and in fact, considering the various clauses SR Pasha, Sr PS Page 20 of 50 (02)NMCD_1891.18_COMAS46.16.doc contained in the charter party. He submitted that the charter party came to an end by the efflux of time on 5th June, 2017. As per the terms of the said charter party, Halani was liable to re-deliver the said vessel OCEAN 303 to a Port in UAE as per Box 8 of the charter party read with clause 2(d) thereof. Further, as per the clauses in the charter party, Halani was liable to give mandatory notice of 7 days prior to re-delivery. Admittedly, no notice was ever issued by Halani nor was the vessel ever re-delivered to the plaintiff either at the Port of UAE or otherwise. It is, in fact, the plaintiff's pleaded case that the vessel OCEAN 303 was never re-delivered to the plaintiff by Halani and it continued to be on hire in Mumbai till 20th October, 2017, namely, the date on which the charter party between the plaintiff and its head owner (Celestial Vision Limited) came to an end. In this regard, Mr. Kamat brought to my attention, the relevant clauses of the charter party, namely, clause 2(d) which deals with re- delivery and clause 41.11 which contemplates that the vessel shall be off-hire once the same is (i) re-delivered to the UAE Port; and (ii) free from the charterers' men and material. He submitted that admittedly the vessel OCEAN 303 was never re-delivered to the plaintiff at the UAE Port and, therefore, the said vessel continued on hire till 20th SR Pasha, Sr PS Page 21 of 50 (02)NMCD_1891.18_COMAS46.16.doc October, 2017. This being the case, the claim made by the plaintiff for hire charges for the period from 6th June, 2017 to 20th October, 2017 is founded on the basis of the contract between the parties and is a fully sustainable and justifiable claim. He submitted that, in fact, on 7th June, 2017, the plaintiff had issued a letter to Halani putting them to notice that they have 13 free days to re-deliver OCEAN 303 at UAE Port commencing from 0000 Hours on 6th June, 2017 upto 2359 Hours on 18th June, 2017, and if the said vessel (OCEAN 303) was not delivered at the Port in UAE by the said date, then full rates as per Box 20 of the charter party (i.e. USD 10,500/- per day) will be applicable until the said vessel is re-delivered at the UAE Port, free of the charterers' men and material. Despite this, neither the vessel OCEAN 303 was delivered to the plaintiff nor was there any correspondence exchanged between the parties stating that OCEAN 303 was handed over to the plaintiff.
20. As far as the reliance placed by Mr. Pratap on the judgment of the English High Court in the case of THE "RIJN" (supra) is concerned, Mr. Kamat submitted that the same is fully inapplicable to the facts of the present case. He submitted that the SR Pasha, Sr PS Page 22 of 50 (02)NMCD_1891.18_COMAS46.16.doc aforesaid judgment / decision does not deal with the position like in the present case where there is a specific clause in the charter party which stipulates that until the vessel is re-delivered at the Port mentioned in the charter party, the vessel will continue to be treated as on-hire. He submitted that this judgment was passed in completely different facts and cannot be said to be laying down any absolute proposition that delivery at the wrong Port would only entitle the owner to hire charges which would have been earned if the voyage had in fact been performed to re-deliver the vessel at the correct Port. He submitted that this decision was dealing with a case where the re-delivery was at the wrong Port. However, in the facts of the present case, it is the plaintiff's pleaded case that OCEAN 303 was never re-delivered at all whether at the right Port or the wrong Port. In this regard, he relied upon paragraphs 72 to 74 of the Plaint. He, therefore, submitted that the aforesaid judgment of the English High Court in the case of THE "RIJN" (supra), is wholly inapplicable to the facts of the present case. Mr. Kamat, though fairly submitted, that considering clause 39.2.3, which provided for a 13 days' free period for re-delivery to the UAE Port, the plaintiff would be entitled to claim hire charges, not from 6th June, 2017 to 20th SR Pasha, Sr PS Page 23 of 50 (02)NMCD_1891.18_COMAS46.16.doc October, 2017, but from 19th June, 2017 to 20th October 2017. He, therefore, submitted that instead of the plaintiff being entitled to USD 14,38,500/- for the aforesaid period, the plaintiff would be entitled to an amount of USD 13,02,000/-, towards the second and larger claim.
21. As far as prayer clause (b) of the Notice of Motion is concerned, namely, that the defendant vessel be allowed to sail under arrest within the territorial waters of India and Bombay High, Mr. Kamat submitted that such a prayer is contrary to the scheme of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (for short "the Admiralty Act"), and more particularly the definition of "arrest" in section 2(c) of the said Act. He submitted that to allow prayer clause (b) would be contrary to the definition of "arrest" as contained in the said Act. Mr. Kamat submitted that the purpose of arrest as mentioned in section 5(1) of the Admiralty Act is for providing security in relation to a maritime claim which is the subject matter of admiralty proceedings. To allow prayer (b) would mean that despite there being a valid maritime claim and an admitted liability of the defendant, security awarded to the plaintiff by an order of arrest, would be rendered useless. Without prejudice SR Pasha, Sr PS Page 24 of 50 (02)NMCD_1891.18_COMAS46.16.doc to the aforesaid argument, Mr. Kamat submitted that in any event, in the facts of the present case, prayer clause (b) cannot be granted as there is no foundation laid in the pleadings for seeking the said relief. He submitted that before such a relief can be considered by the Court, the defendant has to place the following on record:-
(a) any purported contract that the owners have with ONGC for the defendant-vessel to be taken away to Bombay High;
(b) no class survey or statutory drydock is carried out for the defendant-vessel despite being under arrest since 8th June, 2018. Therefore, it is not known whether the defendant-vessel is in class for the vessel to be even permitted to ply. Further, in absence of the drydock survey, the condition of the vessel is also unknown;
(c) the condition of the defendant-vessel's hull and machinery and the P & I cover is also unknown.
Therefore, if during the voyage, the defendant-
vessel meets with any accident, collision or suffers any loss or becomes a wreck, then the plaintiff's security is entirely at peril.
SR Pasha, Sr PS Page 25 of 50
(02)NMCD_1891.18_COMAS46.16.doc
22. Mr. Kamat submitted that over and above this, the plaintiff itself has preferred an application for sale of the defendant- vessel for the reasons more particularly stated in Notice of Motion No.1322 of 2018. If the vessel is allowed to operate under arrest, the application for sale of the defendant-vessel preferred by the plaintiff would be rendered infructuous. This, according to Mr. Kamat, would also be contrary to the provisions of section 11(3) of the Admiralty Act which stipulates that if the owner or the demise charterer abandons the vessel after its arrest, the High Court shall cause the vessel to be auctioned and the proceeds appropriated and dealt with in such manner as the Court may deem fit, within a period of 45 days from the date of arrest or abandonment. Mr. Kamat submitted that in this case, post the arrest of the defendant-vessel, the owners thereof have failed to furnish security, and given the fact that the defendant-vessel is a depreciating asset, the relief sought in prayer clause (b) is liable to be rejected.
23. As far as the counter claim of the defendant is concerned, Mr. Kamat submitted that this counter claim has been pleaded only as an after-thought to somehow obtain orders for vacating the order SR Pasha, Sr PS Page 26 of 50 (02)NMCD_1891.18_COMAS46.16.doc of arrest of the defendant-vessel. He submitted that even in the Notice of Motion, as originally filed, no such claim was ever made and the same is pleaded for the first time in the Additional Affidavit dated 4th October, 2020. He submitted that this is another clandestine attempt on the part of Halani to merely prejudice and mislead this Court. He submitted that it is pertinent to note that the aforesaid alleged counter claim of USD 9,17,162 was never raised by the owners of the defendant-vessel (Halani) in any correspondence entered into between the parties. Further, this claim, if at all, would be of the year 2017 and the owners of the defendant-vessel (Halani) have not produced any contemporaneous correspondence, or any record, to prove that the purported sum was ever claimed by them from the plaintiff at the relevant time or otherwise. Mr. Kamat submitted that it is unfathomable that a party who has a purported claim and which it believes to be tenable in law, would never raise it against a counter party or take some legal action for the same. This itself proves that the counter claim is merely an after-thought and does not warrant any consideration by this Court, was the submission of Mr. Kamat. In any event, Mr. Kamat submitted that with respect to this purported counter claim, the same has no bearing on the present proceedings SR Pasha, Sr PS Page 27 of 50 (02)NMCD_1891.18_COMAS46.16.doc as this Court does not have the jurisdiction to adjudicate / consider the same in the present Notice of Motion. This counter claim, if at all, can be raised by the defendant as and when they file their Written Statement, and at that time, the Court will consider all contentions with reference to the said counter claim. For all the aforesaid reasons, Mr. Kamat submitted that there was no merit in the above Notice of Motion and the same be dismissed with compensatory costs.
24. I have heard the learned counsel for the parties at length and I have perused the papers and proceedings in the Plaint, the above Notice of Motion as well as the affidavit-in-support thereof, the additional affidavit dated 4th October, 2020, and the affidavit-in-reply filed on behalf of the plaintiff. To properly understand the rival contentions, I think it would be appropriate to examine the different claims made by the plaintiff in the above suit. The different claims in the suit can be found at Exhibit "S" and which are as follows:
Particulars of Claim US Dollar Total outstanding amount as per the 5,39,698.65 invoices raised under the charter party dated 29th December 2016 SR Pasha, Sr PS Page 28 of 50 (02)NMCD_1891.18_COMAS46.16.doc Charter hire for the period of 6th June 14,38,500/- Charter 2017 to 20th October 2017 (@ USD hire for 137 days 10,500/- per day) Interest at 8% per annum on the 43,175/-
principal amount of USD 5,39,698.65
from 5th June 2017 till the filing of the
suit
Interest at 8% per annum on the 71,925/-
principal amount of USD 14,38,500/-
from 20th October 2017 till the filing of
this suit
Legal Cost 15,000
Sub Total 21,08,299.54
1% Poundage 21,082.99 (wrongly
calculated as
2,10,829.954)
TOTAL 21,29,382.53
25. There is no dispute that these claims would fall within the definition of a maritime claim under section 4(1)(h) of the Admiralty Act. The only question, therefore, to decide, is whether the defendant, in the above Notice of Motion, has made out a case for vacating the order of arrest unconditionally or on such terms and conditions as this Court deems fit. In the alternative, I have to decide that if the order of arrest is not to be vacated, then whether the defendant-vessel be allowed to ply/sail under the order of arrest SR Pasha, Sr PS Page 29 of 50 (02)NMCD_1891.18_COMAS46.16.doc within the territorial waters of India and Bombay High. To deal with the aforesaid contentions of the defendant, it would be necessary to deal with each of the claims separately.
26. The first claim as set out above is for USD 5,39,698.65. This claim is for the total amount outstanding as per the Invoices raised by the plaintiff on the defendant under the charter party dated 29th December, 2016. As far as this claim is concerned, I prima facie find that the same is categorically and unconditionally admitted by the owners of the defendant-vessel (Halani). This is clear from the averments in paragraph 21(b) of the affidavit-in-support of the above Notice of Motion read with the e-mail dated 14th October, 2017 (Exhibit "F" to the Notice of Motion). In paragraph 21(b), it is categorically stated that an e-mail dated 14th October, 2017 was sent from the defendant in reply to the plaintiff's request for confirmation of accounts. The defendant countered that there is a sum of USD 5,39,482.32 due and payable by the defendant to the plaintiff. In support of this averment, the defendant has also annexed the said e- mail at Exhibit "F" (to the above Notice of Motion) along with the attachment which is the ledger account maintained by Halani. In SR Pasha, Sr PS Page 30 of 50 (02)NMCD_1891.18_COMAS46.16.doc this ledger account, the amount outstanding from Halani to the plaintiff is mentioned as USD 5,39,482.32. It is, therefore, clear that as far as the first claim is concerned, the amount is unequivocally admitted. In fact, even during the course of arguments, on merits, this claim was fairly not contested by Mr. Pratap, the learned senior counsel appearing on behalf of the defendant.
27. The only defence raised by Mr. Pratap with reference to this claim was that since the plaintiff had suppressed certain documents etc. with reference to the second and larger claim (of USD 14,38,500/-) for hire charges for the period 6th June, 2017 to 20th October, 2017, the plaintiff is not entitled to even agitate this claim, namely, for the sum of USD 5,39,698.65. According to the defendant, the plaintiff has suppressed certain documents, more particularly set out hereinabove, and which, therefore, would entitle the defendant to an order releasing the defendant-vessel from arrest, unconditionally.
28. On perusing the record, I find that this contention of the defendant is factually incorrect. I find that the document of 30th June, 2017 (Exhibit-B to the additional affidavit) has, in fact, been SR Pasha, Sr PS Page 31 of 50 (02)NMCD_1891.18_COMAS46.16.doc disclosed by the plaintiff along with the Plaint at Tab-38. Further, the document at Exhibit-D to the Additional Affidavit which is a letter dated 1st September, 2017, and which the defendant contends was suppressed from this Court, is in fact, disclosed by the plaintiff at Exhibit-B / page 77 of the affidavit-in-reply filed by the plaintiff to the present Notice of Motion. Though two or three letters/emails may not have been annexed and/or disclosed by the plaintiff, I find that there is no material suppression on behalf of the plaintiff. In fact, the purpose of relying upon the documents annexed to the Additional Affidavit was to establish to the Court that the plaintiff had tried to suppress from this Court that after 5th June, 2017, there were negotiations between the parties for entering into a fresh charter party. Considering the documents that have already been disclosed by the plaintiff as mentioned above, it is quite clear that the plaintiff had adequately disclosed that there were negotiations between the parties for entering into a fresh charter party. The fact that those negotiations did not fructify is another matter. However, the fact still remains that these documents were disclosed and which clearly indicate that there were negotiations going on between the parties for entering into a fresh charter party for the coming season starting SR Pasha, Sr PS Page 32 of 50 (02)NMCD_1891.18_COMAS46.16.doc from October, 2017. Therefore, even if two or three emails/letters were not disclosed by the plaintiff, that would not lead to an inference of material suppression or an attempt by the plaintiff to mislead this Court into granting the order of arrest. I, therefore, have no hesitation in holding that there has been no material suppression by or on behalf of the plaintiff so as to warrant vacating the order of arrest dated 8th June, 2018. I must also mention that none of the documents brought on record by the defendant vide its Additional Affidavit, were ever disclosed by them at the time of filing of the present Notice of Motion. They have been brought on record for the first time only on 4th October, 2020 (vide the Additional Affidavit). There is absolutely no explanation as to why this alleged suppression was not brought on record when the above Notice of Motion was lodged as far back as on 27th June, 2018.
29. Even otherwise, with reference to the first claim (of USD 5,39,698.65), I find the argument of suppression to be without much substance. Admittedly, the alleged suppression, if any, is of documents with reference to the second and larger claim of USD 14,38,500/- which was for hire charges for the period 6th June, 2017 SR Pasha, Sr PS Page 33 of 50 (02)NMCD_1891.18_COMAS46.16.doc to 20th October, 2017. It is not even the case of the defendant that there has been suppression of any documents with reference to the admitted claim for hire charges upto 5th June, 2017. Once this claim is admitted by the defendant, then, it can hardly seek to defeat / negate such an admitted claim on the basis of a so-called suppression, and that too of documents not relating to that claim at all. In these circumstances, I do not think that Mr. Pratap is correct in his submission that the plaintiff is not entitled to the first claim on the alleged ground of suppression.
30. As far as the judgment of the Court of Appeal in the case of THE "VASSO" (Formerly "ANDRIA") reported in (1984) Vol. 1 Lloyds Law Reports, page 235 is concerned, I am afraid the same does not bolster the case of the defendant any further. In this decision, there was an arbitration agreement between the parties. The Court held that the mere fact that the dispute between the parties fell within the scope of an arbitration agreement did not itself generally preclude one of them from bringing an action in rem. The mere existence of an arbitration agreement did not, by itself, prevent a party from procuring the arrest of the ship or otherwise proceed SR Pasha, Sr PS Page 34 of 50 (02)NMCD_1891.18_COMAS46.16.doc with the action. But, the arbitration agreement could, of course, have certain consequences. For example, if an action was begun, the other parties could apply for a stay of the proceedings. Generally speaking, the Court's power to grant a stay in such a case was discretionary and if a party actively pursued proceedings in respect of the same claim, both in the Court and in arbitration, then, it could be regarded as vexatious and an abuse of the process of the Court. This decision held that the Court may, in exercise of its inherent power, require him to elect to which forum he will pursue his claim. In this case, the arbitration proceedings were being actively pursued and at the same time, on the same cause of action, the proceedings in Court were also being actively pursued. The fact that arbitration proceedings were being actively pursued was not disclosed to the Court when arrest of the ship was sought and hence the Court held that this was a material suppression. It is in this light that the Court of Appeal held that it was axiomatic that in ex-parte proceedings there should be a full and frank disclosure to the Court of the facts known to the plaintiff and that failure to make such a disclosure may result in the discharge of any order made upon an ex-parte application of arrest, even though the facts were such that with full disclosure an order SR Pasha, Sr PS Page 35 of 50 (02)NMCD_1891.18_COMAS46.16.doc would have been justified. One cannot read this judgment de hors the facts of the case. The observations made therein have to be read in context with the facts discussed in the decision. In the facts of the present case, as mentioned earlier, the first claim of the plaintiff (for USD 5,39,698.65) is an admitted claim. Once it is admitted, the same cannot be defeated on the so-called ground of suppression and that too of documents not relating to this claim, but with reference to the second and larger claim. In any event, as mentioned earlier, I do not find that there was any attempt on the part of the plaintiff to suppress any material documents or to mislead this Court into passing an ex-parte order of arrest. This being the case, I do not think that this decision in the case of THE "VASSO" (supra) can have any application to the facts and circumstances of the present case.
31. Now I shall consider the second claim which is for USD 14,38,500/-. The second and the larger claim, is for charter hire for the period 6th June, 2017 to 20th October, 2017. At the very outset, I must state that this claim for hire charges from 6th June, 2017 is not sustainable as the charter party itself provides (clause 39.2.3) for 13 SR Pasha, Sr PS Page 36 of 50 (02)NMCD_1891.18_COMAS46.16.doc days' free period for re-delivery of the vessel OCEAN 303 to the UAE Port. In these circumstances, therefore, if at all, this claim can be made by the plaintiff only for the period 19th June, 2017 to 20th October, 2017. This, in fact, has been fairly conceded by Mr. Kamat during the course of arguments and he has fairly stated that this claim would have to be reduced to USD 13,02,0O0/-.
32. To understand whether this claim (of USD 13,02,000) is prima facie valid or otherwise, it would be important to refer to certain clauses of the charter party dated 29th December, 2016. This charter party can be found at Exhibit-D page 49 of the Plaint. This is a time charter party for off-shore service vessels. The place and date of contract is reflected in Box 1 as 29th December, 2016. The charterers are Halani (Box 3) and the vessel is OCEAN 303 (Box 4). Box 7 of the charter party talks of Port of delivery to Halani, which is the International waters, off Mumbai. Box 8, and which is important for our purposes, talks about Port or place of re-delivery/notice of delivery. This Box clearly mentions that the Port of re-delivery would be UAE Port at owner's option and the notice of re-delivery would be seven days. Box 8 has to be read with clause 2(d) of the SR Pasha, Sr PS Page 37 of 50 (02)NMCD_1891.18_COMAS46.16.doc charter party which stipulates that the vessel shall be re-delivered on the expiration or termination of this charter party free of cargo and with clean tanks at the Port or place stated in Box 8(i) or such other Port or place as may be mutually agreed. It further states that the charterers (in the present case Halani) shall give the number of days' notice in writing of their intention to re-deliver the vessel as stated in Box 8(ii). Thereafter, Box 9 stipulates the period of hire which is 165 days and Box 20 is the charter hire charges which is USD 10,500/- per calendar day. Box 22 deals with how the Invoices are to be raised and payment to be made. Box 25 read with clause 12(e) of the charter party clearly stipulates that if payment is not received by the owners within five banking days following the due date, the owners are entitled to charge interest at the rate stipulated in Box 25 (interest @ 8%) on the outstanding amount from and including the due date, until payment is received. The other relevant clause for our purposes is clause 39.2.3 which states that 13 days' free period will be given prior to taking re-delivery of the vessel OCEAN 303 at UAE and credit note for this period will be issued separately. Thereafter, and according to me, the most important clause is clause 41.11 which reads as under:
SR Pasha, Sr PS Page 38 of 50
(02)NMCD_1891.18_COMAS46.16.doc "41.11 Off-hire is done once vessel is re-delivered to delivery port as per box 8 and free of charterers men and material."
(emphasis supplied)
33. What this clause contemplates is that the vessel, namely, OCEAN 303, is to be treated "off-hire" once it is re-delivered to the delivery Port as per Box 8 (in the present case UAE Port) and free of the charterers' men and material. In other words, for the vessel to be treated as "off-hire", two conditions have to be fulfilled. One is that it has to be re-delivered at the UAE Port (as mentioned in Box 8) and second is that it has to be free of the charterers' men and material. Only when both these conditions are fulfilled can the vessel be treated as "off-hire". If either of these conditions are not fulfilled, then, the vessel cannot be treated as "off-hire" and would be treated as if it is still "on-hire" by the charterer. When one looks at the charter party as a whole and considers the clauses therein, at least, prima facie, it is clear that the bargain struck between the parties was that on the expiry of the time charter party (by the efflux of time), it was the charterer's (Halani) duty to re-deliver the vessel SR Pasha, Sr PS Page 39 of 50 (02)NMCD_1891.18_COMAS46.16.doc OCEAN 303 to UAE Port. For this purpose, in fact, 13 days free period was given as contemplated in clause 39.2.3. Admittedly, this has not been done. It is not even the case of the defendant that the vessel OCEAN 303 was re-delivered to the plaintiff at UAE Port. According to me, if this be the case, then, clearly, under clause 41.11, the vessel OCEAN 303 is not treated as "off-hire" because the charterer has not complied with the condition of re-delivery of the vessel at the UAE Port. As mentioned earlier, for the vessel to be treated as off-hire, two conditions have to be fulfilled, namely, (i) that the vessel has to be re-delivered at the UAE Port; and (ii) that it should be free from the charterers' men and material. Only when these two conditions are fulfilled can the vessel be treated as "off- hire" under the contract, namely, the charter party dated 29th December, 2016. Since, admittedly, one of these conditions has not been fulfilled, the vessel would be treated as "on-hire" under the charter party. As per the bargain struck between the parties and reflected in the charter party, if the vessel OCEAN 303 is treated as "on-hire", then the plaintiff's claim at least, prima facie, for hire charges for the period from 19th June, 2017 to 20th October, 2017 (for USD 13,02,000/-) appears to be valid.
SR Pasha, Sr PS Page 40 of 50
(02)NMCD_1891.18_COMAS46.16.doc
34. I must mention here that the plaintiff, by their email dated 7th June, 2017, categorically put Halani on notice that they had 13 free days to re-deliver the vessel OCEAN 303 at the UAE Port commencing from 0000 Hours on 6th June, 2017 upto 2359 Hours on 18th June, 2017. The said email further stated that if the said vessel was not delivered by the said date at the said Port, then, full rates as per Box 20 of the charter party (i.e. USD 10,500/- per day) would be applicable until the said vessel is re-delivered at the UAE Port, and free of the charterers' men and material. Further, even in the e-mail dated 30th June, 2017 (Exhibit B page 22 of the Additional Affidavit), and when negotiations were going on for entering into a fresh charter party for the new season (from October, 2017), it was categorically stated by the plaintiff that the vessel OCEAN 303 was required to be re-delivered to UAE upon completion of the project in Mumbai and despite this, the said vessel was in Mumbai Port and the plaintiff reserves its right in line with the charter party dated 29th December, 2016 until the vessel is re-delivered to UAE waters. This correspondence therefore clearly indicates two things. Firstly, the defendant/Halani was expressly put to notice that if the vessel SR Pasha, Sr PS Page 41 of 50 (02)NMCD_1891.18_COMAS46.16.doc OCEAN 303 was not re-delivered to the UAE Port after the expiry of the charter party, they would be liable to pay hire charges as contemplated in Box 20 thereof in the sum of USD 10,500/- per day until re-delivery of the said vessel; and secondly, even though negotiations were going on to enter into a fresh charter party for the new season starting from October, 2017, the plaintiff expressly reserved its right to claim hire charges from the defendant until the vessel was re-delivered to the plaintiff as contemplated in the charter party. For all the foregoing reasons, I am unable to accept the argument of Mr. Pratap that the second and larger claim for hire charges for the period 19th June, 2017 to 20th October, 2017 (for USD 13,02,000/-) is unsustainable in law or in fact.
35. I must mention that to support his argument, Mr. Pratap relied upon the judgment of the English High Court in the case of THE "RIJN" (supra). As correctly submitted by Mr. Kamat, the reliance placed on this judgment is entirely misplaced. In the case of THE "RIJN", there was a time charter contract where re-delivery of the vessel was to be at a safe Port South Japan / Singapore range. The charterers terminated the charter party at the Port of SR Pasha, Sr PS Page 42 of 50 (02)NMCD_1891.18_COMAS46.16.doc Galveston, USA. Disputes arose between the parties as to what would be the damages that the owners would be entitled to for failure on the part of the charterers to re-deliver the vessel at a Port in South Japan / Singapore range. In these facts, the English High Court held that the measure of damages requires the charterer to restore to the owner, the hire which he would have earned if the voyage had, in fact, been performed to the re-delivery Port. It is on this basis that damages were awarded of the cost of a notional final voyage from Galveston, USA to a Port in Japan. What Mr. Pratap's argument overlooks is that the aforesaid decision does not deal with a situation like the present one, where there is a specific clause in the charter party which stipulates that until the vessel is re-delivered at a particular Port as mentioned in the charter party, the vessel will continue to be treated as "on-hire". When one considers this aspect, then it is clear that the judgment of the English High Court was passed in a completely different set of facts and cannot be said to laying down any absolute proposition that delivery at the wrong Port would only entitle the owner to hire charges which he would have earned if the voyage had, in fact, been performed by delivering the vessel at the correct Port. The parties in the present case SR Pasha, Sr PS Page 43 of 50 (02)NMCD_1891.18_COMAS46.16.doc categorically agreed that until the vessel was re-delivered to the correct Port, namely, a Port in UAE, the vessel would be treated as "on-hire". This is explicit from a plain and unambiguous reading of clause 41.11. Once the parties have contracted in this fashion, they are bound by the same and, therefore, the defendant would be liable to pay hire charges until the vessel OCEAN 303 is taken off-hire or, in the present case, when the charter party entered into between the plaintiff and its head owner (Celestial Vision Limited), came to an end. I, therefore, find that the reliance placed on this decision is wholly misconceived and has no application to the facts of the present case.
36. Thereafter, as mentioned earlier, Mr. Pratap submitted that the plaintiff has not raised a single Invoice for charter hire charges for the period 6th June, 2017 to 20th October, 2017 even though the charter party clearly provided that an Invoice has to be raised after completion of every 15 days and payment has to be made within seven days of receipt thereof. I think this makes little difference in the present case. Merely because the plaintiff has not raised an invoice for this period does not mean that it is excluded SR Pasha, Sr PS Page 44 of 50 (02)NMCD_1891.18_COMAS46.16.doc from making the claim in the present suit. In fact, by their email dated 7th June, 2017, the plaintiff categorically put Halani on notice that they had 13 free days to re-deliver the vessel OCEAN 303 at the UAE Port commencing from 0000 Hours on 6th June, 2017 upto 2359 Hours on 18th June, 2017. The said email further stated that if the said vessel was not delivered by the said date at the said Port, then, full rates as per Box 20 of the charter party (i.e. USD 10,500/- per day) would be applicable until the said vessel is re-delivered at the UAE Port, and free of the charterers' men and material. Further, even in the e-mail dated 30th June, 2017 (Exhibit B page 22 of the Additional Affidavit), and when negotiations were going on for entering into a fresh charter-party for the new season, it was categorically stated by the plaintiff that the vessel OCEAN 303 was required to be re-delivered to UAE upon completion of the project in Mumbai and despite this, the said vessel was in Mumbai Port and the plaintiff reserves its right in line with the charter party dated 29th December, 2016 until the vessel is re-delivered to UAE waters. When one considers these documents / correspondence exchanged between the parties and which is undisputed, I do not think that Mr. Pratap is right in his submission that merely because no Invoice was raised SR Pasha, Sr PS Page 45 of 50 (02)NMCD_1891.18_COMAS46.16.doc with reference to hire charges from 19th June, 2017 to 20th October, 2017, the plaintiff is not entitled to make a claim for the same in the present suit.
37. This now only leaves me to deal with the alternative prayer canvassed by Mr. Pratap, namely, that the defendant-vessel be allowed to sail within the territorial waters of India off Bombay High under the orders of arrest. In this regard, I find considerable force in the argument canvassed by Mr. Kamat. Though under certain circumstances, this Court always has the power to allow the arrested vessel to sail within its jurisdiction under the orders of arrest, I do not think that in the present case, the same is warranted. Mr. Kamat is correct in his submission that such a prayer cannot and ought not to be granted for the asking by the owners of the defendant-vessel. Before such a relief is granted, a foundation for the same has to be laid. In the present case, Halani ought to have brought on record any purported contract that it had entered into with ONGC for taking the defendant-vessel to Bombay High. The defendant-vessel has been under arrest since 8th June, 2018. During this entire period, there is no class survey or statutory drydock SR Pasha, Sr PS Page 46 of 50 (02)NMCD_1891.18_COMAS46.16.doc carried out. Therefore, it is now known whether the defendant-vessel is in class so that it can be permitted to ply. Further, in the absence of the drydock survey, the condition of the vessel is also unknown. Over and above this, the condition of the defendant-vessel's hull and machinery and the P&I cover is also unknown. Therefore, if during the voyage, the defendant-vessel were to meet with any accident, collision or suffer any loss or become a wreck, then, the plaintiff's security is entirely at peril. I agree with Mr. Kamat's submission that such a prayer ought to be granted by the Court, more as an exception rather than the rule. The foundation for seeking such an order has to first be clearly made out. Only once such a foundation is laid, would the Court allow the vessel to sail under arrest. Admittedly, no such foundation is laid by the defendant, either in the Notice of Motion or in the Additional Affidavit dated 4th October, 2020. Without adequate material being placed on record, such an order cannot be granted, at least at this stage. I therefore have no hesitation in rejecting the alternate prayer to allow the defendant-vessel to ply under the order of arrest.
38. Before parting, it would only be fair to deal with the SR Pasha, Sr PS Page 47 of 50 (02)NMCD_1891.18_COMAS46.16.doc defendant's contention that they have a counter claim against the plaintiff in the sum of USD 9,17,162/- as per the particulars annexed at Exhibit U to the said affidavit. On a perusal of Exhibit-U, it comprises of three components, namely, an Invoice raised for USD 4,22,707/-, interest at 12% per annum on the said amount aggregating to USD 1,81,080/- and alleged expenses incurred to bring an alternate / replacement vessel to India for USD 3,13,375/-. According to Mr. Kamat, this purported counter claim is not just untenable in law, but has been merely raised as a bald claim without any justifiable reasons or without any basis whatsoever, in law or otherwise. This claim is now being put up by the owners of the defendant-vessel merely as an after-thought and was never raised by the defendant in the above Notice of Motion, was the submission. I must note that this claim is raised for the first time in the Additional Affidavit dated 4th October, 2020. Whether this claim is justifiable or otherwise is something I am not called upon to decide in the present Notice of Motion. If the defendants have a justifiable counter claim against the plaintiff, they are free to raise the same at the time when they file their Written Statement. Even prima facie, I do not want to give any finding with reference to the same so as to not affect the SR Pasha, Sr PS Page 48 of 50 (02)NMCD_1891.18_COMAS46.16.doc rights of either of the parties.
39. In view of the foregoing discussion, the following order is passed:
(i) The prayer for vacating the order of arrest dated 8th June, 2018, is hereby rejected.
(ii) Similarly, even the alternate prayer for permitting the defendant-vessel to ply/sail under arrest within the territorial waters of India and Bombay High is rejected.
(iii) Having come to the conclusion that there is no wrongful arrest of the defendant-vessel, the question of directing the plaintiff to make payment of damages at this stage cannot and does not arise. Similarly, therefore, there is no question of directing the plaintiff to furnish security for costs of Rs.20 lakhs or any other sum under Order XXV of the Code of Civil Procedure, 1908.
(iv) If the plaintiff wants a release of the defendant-vessel from the order of arrest on furnishing security, the same shall be released on the defendant furnishing security in the amount of USD 19,85,148/- [rounded off] (either by deposit in this Court or by furnishing a Bank Guarantee SR Pasha, Sr PS Page 49 of 50 (02)NMCD_1891.18_COMAS46.16.doc of a nationalised bank), the break-up of which is as follows:
FIRST CLAIM:- Total outstanding amount USD 5,39,698.65 as per the invoices raised under the charter party dated 29th December 2016 SECOND CLAIM:- Charter hire for the USD 13,02,000/- period of 19th June 2017 to 20th October 2017 (@ USD 10,500/- per day) Interest on the FIRST CLAIM at 8% per USD 43,175/- annum on the principal amount of USD 5,39,698.65 from 5th June 2017 till the filing of the suit Interest on the SECOND CLAIM at 8% per USD 65,620/-
annum on the principal amount of USD
13,02,000/- from 20th October 2017 till the
filing of this suit
Legal Cost USD 15,000/-
Sub Total USD 19,65,493.65
1% Poundage USD 19,654.93
TOTAL USD 19,85,148.58
40. The Notice of Motion is disposed of in the aforesaid terms.
However, there shall be no order as to costs.
B.P. COLABAWALLA, J.
SR Pasha, Sr PS Page 50 of 50