Bombay High Court
Bulk Ship Management S.E.A. vs The Bunkers Onboard The Ship M.V. on 9 July, 2014
Author: K.R.Shriram
Bench: K.R.Shriram
1 NMS-735-2013.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ADMIRALTY & VICE ADMIRALTY JURISDICTION
NOTICE OF MOTION NO.735 OF 2013
IN
ADMIRALTY SUIT NO.42 OF 2013
Bulk Ship Management S.E.A. )
Incorporated under the laws of Republic )
of Malaysia, having its office at Brumby )
House Jalan Bhasa, P.O. Box No. )
80148, Labuan, Malaysia 87011 ) ....Applicant/Def. No.3
IN THE MATTER BETWEEN
Rushab Ship International LLC, a )
company incorporated under the laws of )
the State of New Jersey (United States )
of America) having its office at 43 )
Johnathan Drive Edison, New Jersey ) ....Plaintiff
08820, USD
VS.
1. The Bunkers onboard the Ship M.V. )
African Eagle and Freight due for )
transporation of cargo laden on her at )
port of Mumbai )
2. M.V. African Eagle )
(managers/charterers and all other )
persons concerned and/or interested in )
her, foreign vessel, flying the flat of )
Bahamas, alongwith bunkers on board, )
presently lying in the port and harbour of )
Mumbai )
3. Bulk Ship Management S.E.A., a )
company incorporated under the laws of )
Republic of Malaysia, having its office at )
Brumby House Jalan Bhasa, P.O. Box )
No. 80148, Labuan, Malaysia 87011 )
Gauri Gaekwad
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2 NMS-735-2013.doc
4. African Eagle Shipping Company )
Limited C/o MUR Shipping BV, Office )
224, Building 4 Gold and Diamond Part, )
Sheikh Zayed Road Dubai, UAE )
5. MUR Shipping Holdings BV, Tower H, )
World Trade Centre Amsterdam )
Zuidplein 164, 1077 XV, Amsterdam, ) ....Defendants
Netherlands
----
Mr. Bomi Patel a/w Mr. Jayesh Ashar, Ms. Priyanka Desai i/b. K.
Ashar & Co. for the Plaintiffs.
Mr. V.K. Ramabhadran a/w. Mr. Aashish Kamat i/b. M/s. Crawford
Bayley & Co. for Applicant/Defendant No.3.
----
ig CORAM : K.R.SHRIRAM,J
DATE : 8th July, 2014.
JUDGMENT:-
1 The Plaintiff has filed this suit under the Admiralty jurisdiction of this Court seeking arrest, sequestration, condemnation and sale of the bunkers that was on board the 2 nd defendant vessel and arrest and deposit of freight due for transportation for cargo that was laden on 2nd defendant, which was at the Port of Mumbai (the 1st defendant) at that time for securing Plaintiff's claim in arbitration proceedings. The suit was filed for arrest of 1 st defendant towards security of the claim in the arbitration proceedings.
2 By an order dated 7th January, 2013, this Court was pleased to pass an order for arrest of the 1 st defendant, viz., Bunkers Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:46 ::: 3 NMS-735-2013.doc on board the 2nd defendant-vessel alongwith freight due for transportation of cargo laden. The Defendant No.3 filed a Notice of Motion for vacating the order of arrest. It was the case of Defendant No.3 that out of the entire quantity of bunkers on board the 2nd defendant-vessel, only bunkers in the value of USD 69,532/- were under their ownership and after the vessel reached Mumbai, bunkers only of the value of USD 34,692.80 remained. The balance bunkers belonged to Defendant No.5.
3 It was also argued that the freight and bunkers independent of a vessel cannot be arrested. This was disputed by the Plaintiff and finally by an order dated 4 th February, 2013, this Court held that an order arresting freight qua the cargo on board the 2nd defendant vessel cannot be arrested and since the 3rd defendant agreed to give security only to the extent of USD 34,692.80 being the value of the bunkers owned by the 3 rd defendant on the date of arrest on without prejudice basis, the Court accepted the security. The issue as to whether bunkers independent of vessel can be arrested or not was kept open.
4 In the Notice of Motion, the Defendant No.3 had also prayed to provide guarantee by the Plaintiff in the like some of their Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:46 ::: 4 NMS-735-2013.doc claim amount and increasing at USD 9050 per day. The Court did not grant the said prayer as it was not supported by adequate particulars.
The Court, however, granted liberty to the 3rd defendant to take out fresh Notice of Motion setting out all necessary particulars and seeking appropriate reliefs in this behalf.
5 This is the background for the Defendant No.3 to take out the present Notice of Motion, whereby the Defendant No.3 in addition to its claim in arbitration, is seeking an order and direction against the Plaintiffs to pay to Defendant No.3 a sum of USD 398,888.64 towards the loss and/or damage suffered by reason of the arrest/detention of 2nd defendant-vessel. The Plaintiff had no claim against the 2nd defendant-vessel, which got detained due to the Plaintiff obtaining the order dated 7th January, 2013 of arrest of Defendant No.1.
6 The basis for taking out this Notice of Motion is that the Defendant No.2 was under charter to the Defendant No.3 by Defendant No.5. As the Plaintiff wrongfully applied for arrest of the bunkers and freight arising out of transportation of cargo laden onboard Defendant No.2 vessel and the Plaintiff having no legal entitlement to arrest Defendant No.1, the vessel got detained resulting in Defendant No.3 having suffered the following Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:46 ::: 5 NMS-735-2013.doc losses/expenses :-
Sr. Particulars Amount
No.
1 Loss of charter hire paid from
9th January, 2013 till 5th February, 2013
by Defendant No.3 to Defendant No.5 USD 185,554.67
for 27 days - 11 hours - 43 minutes
@ USD 6750/- as mentioned in clause
29 of the charter party dated
29th December, 2012.
2 Value of bunker consumed from
9th January, 2013 till 5th February, 2013 USD 50,404.97
@ USD 1210/- per m.t.
3 Cost of legal proceedings in India USD 86,000
4 Cost of arbitration USD 50,000
5 Cost incidental to arrest of Defendant USD 18,929.00
No.1 Additional PDA for the vessel
6 Bottom cleaning charges as per clause
95 of the charter party due to extended USD 6,500
stay of the vessel.
7 CVE charges under the charter party USD 1,500
dated 29th December, 2012
TOTAL USD 398,888.64
7 During the course of arguments, the counsel for the
Applicant, viz., Defendant No.3 restricted the claim to Item Nos.1, 2 and 5 above. The claim therefore, from USD 398,888.64 got reduced to USD 254,888.64.
8 After filing the affidavit-in-reply, the Plaintiff took out a Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:46 ::: 6 NMS-735-2013.doc Notice of Motion bearing No. 1591 of 2013 in this Notice of Motion for stay of the suit praying that the suit be stayed pending hearing and final disposal of the arbitration proceedings and also stay of the suit, which was later clarified by the Plaintiff's counsel to mean the present Notice of Motion only, pending hearing and disposal of that Notice of Motion No. 1591 of 2013. The Notice of Motion No. 1591 of 2013 came to be disposed by a judgment pronounced on 9th June, 2014. In the said judgment the plaint itself came to be rejected under Order 7 Rule 11 (a) of CPC, as the Apex Court has held that an inter-parte suit simply for interim relief pending arbitration outside India will not be maintainable and unless the dispute is decided by the arbitrator, cause of action will clearly be contingent and speculative and there will be no existing cause of action and the plaint is bound to be rejected under Order 7 Rule 11. It was also held that the Court's jurisdiction to arrest a ship in an action in rem should not be exercised for the purpose of providing security of an award, which may be made in arbitration proceedings that is maintainable because the purpose of the exercise of the jurisdiction is to provide security in respect of the action in rem, and not to provide security in some other proceedings like an arbitration proceeding. If the plaintiff invokes the jurisdiction of the Court to obtain the arrest of the ship as security for an award in an arbitration proceeding, the Court should not issue a Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 7 NMS-735-2013.doc warrant of arrest.
9 While hearing the said Notice of Motion No. 1591 of 2013, the Plaintiff had also argued that the claim for damages by Defendant No. 3 was premature, as the issue as to whether bunkers could be arrested or not was yet to be decided by the Court. That submission of the Plaintiff was not accepted because the learned single Judge while disposing of Notice of Motion (Lodg.) No. 59 of 2013 had said that he was not granting the claim for damages due to inadequate particulars and not because it was premature. Therefore, had the particulars being adequate then, he would have, even though the arrest of bunkers was kept open, granted damages. Also when the plaint itself is being rejected, the question of deciding whether bunkers could be arrested independent of vessel or not was not required to be gone into. The entire order of arrest therefore has been wrongful.
10 In the judgment pronounced on 19th March, 2014 delivered by this Court in the matter of 1Navbharat International Limited vs. Cargo Onboard m.v. Amitees (at Kandla), this Court had taken the view that in view of the undertaking given under Rule 941 of the Bombay High Court (O.S.) Rules, the liability under the undertaking is
1. Notice of Motion 2853 of 2010 with Notice of Motion No. 3649 of 2010 in Admiralty Suit No. 19 of 2010 Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 8 NMS-735-2013.doc triggered if the order that has been obtained was without jurisdiction or if the order is held to be wrongful or the order of arrest is vacated.
Therefore, in this case, the single Judge while concluding the judgment having stated that he was not awarding damages due to want of sufficient particulars, the liability had got crystalised. In any case the plaint itself being rejected for having filed without cause of action, the liability of the Plaintiff in view of the undertaking given has got crystalised. What is required to be consider now is only the quantum. Rule 941 of the Bombay High Court (O.S.) Rules provides as under :-
"941. Application to arrest property in a Suit in rem.- If the Suit is in rem an application for the arrest of the property proceeded against shall be made to the Judge in Chambers and shall be supported by affidavit. The affidavit shall state the nature of the claim and that it has not been satisfied. It shall also state the nature of the property to be arrested and if the property is a ship, the name and nationality of the ship. There shall be annexed to the affidavit a certificate of the Prothonotary and Senior Master certifying that search has been made in the Caveat Warrant Book and that no caveat has been filed against the issue of warrant of the arrest of the said property.
A party applying under this rule shall 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."
(emphasis supplied) 11 It is also necessary to mention that the counsel for the Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 9 NMS-735-2013.doc Plaintiff stated that the Plaintiff have preferred an appeal against the judgment pronounced on 9th June, 2014 in Notice of Motion No. 1591 of 2013 and though there is no stay granted, until that appeal is disposed of, this court should not go ahead with hearing of the present Notice of Motion. He submitted that if the judgment is reversed, then this Notice of Motion will have to be considered as premature.
12I disagree with this view of the Plaintiff in view of what I have stated earlier that Justice Kathawalla himself while disposing of the Notice of Motion (Lodg.) No. 59 of 2013 has stated that he was not deciding on the issue of damages because of insufficient particulars. Justice Kathawalla was very well aware that he was keeping open the issue as to whether bunkers could be arrested or not. Not only that he had also granted liberty to the Defendant No.3 to take out fresh Notice of Motion stating of all necessary particulars and seeking appropriate reliefs in this behalf. Moreover, as submitted by the counsel for the Defendant No.3, the Plaintiff, as soon as the order of 7th January, 2013 arresting Defendant No.1 was passed, had been informed by the Advocate representing Defendant No.5 that the bunkers on board did not belong to the Defendant No.3. The Advocate had also mentioned the quantity that belonged to Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 10 NMS-735-2013.doc Defendant No.3 and he had requested the Plaintiff to remove that quantity from vessel and store it elsewhere so that the vessel would not be detained. Still the Plaintiff did not accept the offer and insisted on security for the entire amount of the claim and by that action, wrongfully detained the 2nd defendant-vessel. Therefore, it is not the case whether the plaint cannot be rejected under Order 7 Rule 11 of CPC or that the issue of arrest of bunkers is kept open. Even if the plaint could not have been rejected and even if the Court says bunkers can be arrested, the issue is whether the Plaintiff by pushing with their demand for security for the entire value of their claim despite being told which has been later confirmed by the Court in its judgment dated 4th February, 2013, was correct or not. The prayers in the plaint was for arrest of bunkers, sale of bunkers and application for proceeds of sale to be held as security towards the Plaintiff's claim in arbitration to be commenced. In other words the prayer was only to call upon the defendant-vessel to hand over the bunkers on board to the Plaintiff for sale and applying the sale proceeds as security towards its claim in the arbitration. In light of this, let us examine the correspondence exchanged between the Advocates for Plaintiff and Advocate for Defendant No.5.
13 When the order of 7th January, 2013, arresting the bunkers Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 11 NMS-735-2013.doc onboard the 2nd defendant was passed, Defendant No.5 by its Advocate's email dated 9th January, 2013 informed the Advocates for the Plaintiff, without prejudice to its contentions that bunkers can not be arrested, that only 60.03 MTs IFO and 14.00 MTs MDO of bunkers on board belong to Defendant No.3. Defendant No.5 also called upon the Plaintiff to release the arrest over the bunkers otherwise belonging to Defendant No.5 and make immediate arrangement to pump out 60.03 MTs IFO and 14.00 MTs MDO as security for the Plaintiff's alleged claim to prevent any unnecessary detention of the vessel on that account. In reply, by an email dated 10th January, 2013 the Advocates for the Plaintiff did not agree to but insisted on security for the entire value of their claim in order to agree to vacate the arrest of bunkers and freight. The Advocate for the Defendant No.5 responded to this email by an email dated 11th January, 2013 that the arrest was wrongful and that they would be seeking legal recourse to have the order dated 7th October, 2013 vacated. In between, the Advocate for the Defendant No.5 by their email dated 10th January, 2013 had informed the Advocates for the Plaintiff that the Plaintiff's action was malafide and amounted to crassa negligentia, in view of the Plaintiff not releasing from arrest the bunkers belonging to Defendant No.5 even after being shown clear proof of ownership of such bunkers and refusing to make arrangements to discharge from Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 12 NMS-735-2013.doc the vessel the small quantity bunkers belonging to Defendant No.3 which was 60.03 MTs IFO and 14.00 MTs MDO resulting in unnecessary detention of the 2nd defendant-vessel. The Plaintiff was also cautioned that proceedings will be taken against the Plaintiff at the risk as to cost and consequences of the Plaintiff. On this point, the counsel for the Plaintiff states that these messages were from Defendant No.5 and not from Defendant No.3 and this could not be considered as an offer to secure the claim to the extent of value of bunkers by Defendant No.3. The issue is not as to whether the Defendant No.3 offered or Defendant No.5 offered or no money was offered as security. The issue is that the Plaintiff were put to notice that only 60.03 MTs IMO and 14.00 MTs MDO belonged to Defendant No.3 and this has been confirmed by the learned single Judge in his judgment pronounced on 4th February, 2013. Moreover, the Plaintiff in the prayers in the plaint have only sought that the bunkers be removed and sold and the sale proceeds be applied as security in their arbitration proceedings which was to be commenced and what the Plaintiff was offered - take away the bunkers that belonged to Defendant No.3 and store it but do not hold on to the bunker that belonged to Defendant No.5 unnecessarily and thereby also detain the vessel.
Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 13 NMS-735-2013.doc 14 In view of the above, we need not even go into the fact as to whether the plaint could be rejected or not or whether the issue as to whether the bunker can be arrested or not. The Plaintiff was expressly told the quantity of bunkers that belonged to Defendant No.3 which has been confirmed by an order of this Court but the Plaintiff still chose to detain the vessel unreasonably and therefore, the Plaintiff is exposed to pay damages as compensation.
15Before I deal with each claim, it is necessary to highlight certain portions from the judgment dated 4th February, 2013 by which order the Defendant No.1 was released resulting in Defendant No.2 getting released. The vessel was under detention from 7 th January, 2013 to 4th February, 2013, a total of about 29 days. However, as the vessel completed loading only on 9th January 2014, the claim in the Notice of Motion for damages is restricted for a period of 27 days 11 hours and 45 minutes. The portions in the judgment of 4 th February, 2013 that needs to be highlighted are as under :-
"30. Defendant No.3 has produced the fixture note/contract of carriage dated 29th December 2012 between Defendant No.3 and Defendant No.5, an affiliate of MUR Shipping BV. Though the relevant clause of the fixture note is reproduced hereinabove, the same is again reproduced for ready reference:. " BOD ABT 75/825 MT IFO AND ABT 70/90 MT MDO BOR ABT SAME AS ACTUALLY ON BOARD ON DELIVERY - ON DELIVERY, TOGETHER WITH Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 14 NMS-735-2013.doc FIRST HIRE PAYMENT, CHRTS TO TAKE OVER AND PAY FOR BUNKERS UPTO BUNKERING PORT AT USD 625 PER MT IFO AND USD 1020 PER MT MDO. CHRTS TO UNKER AT SUCH BUNKERING PORT TO MEET the REDELY QTTIES. OWS ON REDEL TO TAKE OVER AND PAY FOR BUNKERS CHRTRS HAVE ALREADY PAID FOR, AT the SAME PRICES."
31. From the above clause, it is clear that Defendant No.3 is required to ensure that the quantity of bunkers on board Defendant No.2 is the same at the time of delivery and redelivery. Upon delivery, Defendant No.3 is required to pay for bunkers from the delivery port (Kandla) to the bunkering port at USD 625 per MT IFO and USD 1020 per MT MDO. This payment is required to be made under the first hire charge statement. The Plaintiff has strongly asserted that in the said fixture note it is not stated at which bunkering port Defendant No.3 was to bunker Defendant No.2. However, it is clear from the email dated 30th December 2012 that the bunkering port (Fujairah) was identified on the next day of the fixture note/contract dated 29th December 2012 i.e. much before the arrest of Defendant No.2. The first hire statement is also produced before the Court. An email dated 30th December 2012 setting out the value of bunkers from delivery port till bunkering port aggregating to USD 69,532.12 sent by Defendant No.3 is also produced before the Court. Copies of documents showing that MUR Shipping has purchased the bunkers in the first place and the Bank Wire transfer of US $ 267,565.13 from Defendant No.3 to MUR Shipping BV is also perused by the Court. In view thereof, from the said fixture note/contract of carriage dated 29th December 2012 along with the documents mentioned in this paragraph, it is evident that only the quantity of bunkers required to take the Defendant No.2 vessel from the delivery port (Kandla) to the bunkering port (Fujairah) belonged to Defendant No.3 as per the terms of the Charterparty entered into between Defendant No.3 and MUR shipping BV. Since the fixture note, the hire statement, the bunker statement, the Bank wire transfer and the payment of the amount of Rs. 267,565.13 by Defendant No.3 to MUR Shipping BV are exchanged through emails, that too much prior to the date of arrest Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 15 NMS-735-2013.doc of the Defendant No.2 vessel i.e. 7th January 2013, I am satisfied that the said documents are genuine and there is nothing suspicious about the same.
32. I am therefore also of the view that the explanation/interpretation sought to be given by Defendant Nos. 3 and 5 to the fixture note/carriage of contract is correct and I accept the submissions on behalf of Defendant Nos.3 and 5 in regard thereto. As regards the submission advanced on behalf of the Plaintiff that the transaction entered into by and between Defendant No.3 and MUR Shipping BV is in complete disregard to the accepted practice, in my view the contract entered into by and between Defendant No.3 and Defendant No. 5 is a commercial contract and it is for the parties to the contract to decide and agree upon the terms and incorporate the same in the contract. Once the parties to the contract agree to the terms and execute the contract, the terms of the contract cannot be questioned by any third party.
33. The learned Advocate appearing for Defendant Nos. 1, 2, 4 and 5 on being informed of the arrest of their bunkers immediately communicated to the Plaintiff's Advocates their ownership in the majority of the bunkers and called on the Plaintiff's Advocates to discharge the order of arrest. A copy of the fixture note dated 29th December 2012 in respect of the Defendant No.2 vessel along with the copy of the first hire statement and the statement setting out the value of the bunkers from the delivery port till bunkering port was also forwarded to the Advocate for the Plaintiff. From the response of the Plaintiff's Advocates, as correctly pointed out by the Learned Advocate appearing for Defendant Nos. 1, 2, 4 and 5, it is clear that though the Plaintiff's Advocates disputed the existence of the transaction, they did not dispute the fact that the effect of the transaction (if it existed) was that the ownership of all bunkers except the bunkers to take the vessel from delivery port Kandla to the bunkering Port Fujairah vested in MUR Shipping BV. By a subsequent letter, the Advocates for Defendant Nos. 1, 2, 4 and 5 also provided copies of various other documents such as evidence of Bank wire transfer of US$ 267,565.13 and the evidence of purchase of Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 16 NMS-735-2013.doc bunkers by MUR Shipping BV's related Company MUR Shipping on behalf of MUR Shipping BV. Despite receipt of these documents, the Plaintiff in none of their letters raised any issue on the interpretation of the fixture note and also did not file any affidavit dealing with the said documents. The excuse sought to be given is that inspection of the originals and other documents sought for was not given, which excuse cannot be accepted. Instead, for the first time in the course of the arguments it was submitted that the interpretation advanced by Defendant Nos. 1, 2, 4 and 5 to the fixture note is incorrect which submission advanced on behalf of the Plaintiff has already been rejected above.
34. In the circumstances I am satisfied that the Defendant Nos. 1 to 5 have established that the ownership of all bunkers except the bunkers required to take the Defendant No.2 vessel from delivery port Kandla to bunkering port Fujairah vested in MUR Shipping BV. Defendant No.3 made payment of US$ 69,532 for 88.4 MT HO and 14 MT DO, which quantities were estimated as required for voyage from port of delivery to the port of bunkering. As on the date of order of arrest dated 7th January 2013,the Defendant No.2 vessel made a voyage from Kandla to Mumbai. The quantity of bunkers on board the Defendant No.2 vessel was 61.40 MT HO and 10.39 MT DO. Hence on the date of the order of arrest the value of the bunkers which the Defendant No.3 was entitled to use was US$ 34692.80. The Defendant No.3, without prejudice to their contention that bunkers on board Defendant No. 2 vessel cannot be arrested and/or proceeded against in Admiralty, shall therefore give security only to the extent of US$ 34692.80 being the value of bunkers owned by them on the date of the arrest i.e. 7th January 2013." .....................
76. In the above circumstances I am of the view that an order arresting freight qua the cargo on board Defendant No.2 cannot be passed by this Court. In view of this finding, I have not considered the alternate argument advanced by the Defendant No.3 that freight which is not accrued cannot be arrested. I therefore pass the following order:
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(i) The Defendant No. 3 shall give security only to the extent of US $ 34692.80 being the value of bunkers owned by them on the date of arrest i.e. 7th January 2013.
(ii) ................
(iii) ................
(iv) ................
(v) ................
(vi) ................
(vii) ................
(viii) ................
(ix) Prayer (b) of the Notice of Motion is not granted since the said prayer is not supported by adequate particulars. However liberty to the Defendants to take out fresh Notice of Motion setting out all necessary particulars and seeking appropriate reliefs in this behalf.
ig (emphasis supplied)
16 Before I proceed further it is necessary to record that the
counsel for the Plaintiff submitted that none of the documents relied upon are admitted and therefore, the claim could not be allowed summarily. This Court in the judgment dated 4th February, 2013, has stated that the documents, i.e., the said fixture note/contract of carriage dated 29th December, 2012, hire statement, bunkers statement, the bank wire transfer and the payment of the amount of USD 267,565.13 are genuine and there is nothing suspicious about the same. The Court has also stated "I am therefore, also of the view that the explanation/interpretation sought to be given by Defendant Nos.3 and 5 to the fixture note/contract of carriage is correct and I accept the submissions on behalf of the Defendant Nos.3 and 5 in Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 18 NMS-735-2013.doc regard thereto". Therefore, the Court has endorsed the fact that the fixture note, the hire statement, bunker statement, the bank wire transfer and payment made by Defendant No.3 and Defendant No.5 is genuine. Therefore, I shall go by the documents relied upon to ascertain the quantum.
(1) Charter Hire from 9th January, 2013 to 4th February, 2013 for 27 D 11 H 45 M at USD 6750 per day = USD 185,554.67.
The Applicant has filed a copy of the fixture note with the compilation of documents. The copy filed has been signed by the representatives of Defendant No.3 and Defendant No.5. The fixture note provides the hire rate is agreed at USD 6750 daily and the hire payable was every 15 days in advance. The Applicant has also produced the charter hire statements which provides that the vessel was delivered on 29th December, 2012 and the rate of hire charged was USD 6750 per day and bank transfer documents of transfer of charter hire.
The counsel for the Plaintiff stated that these bank payment/remittance advises do not provide anywhere that it was made on behalf of the Defendant No.3/Applicant. The indisputable fact is that the vessel on charter from Defendant No.5 to Defendant No.3 as per the fixture note dated 29th December, 2012 and this Court has accepted the fixture note as genuine. Those findings of the Court Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 19 NMS-735-2013.doc has not been challenged by the Plaintiff. It is nobody's case that the vessel was available free to Defendant No.3. Mr. Patel, counsel for the Plaintiffs submitted that under Section 34 of the Evidence Act, books of accounts of the Defendants had to be produced but the Applicant has not produced the same. When the Court has confirmed that there was a fixture stated 29 th December, 2012 and that fixture shows that charter hire payable was USD 6750 per day, the question of producing any books of accounts does not arise.
Therefore, I am inclined to accept the Applicant's contentions that they have lost the charter hire that they paid in as much as the 2nd defendant-vessel was lying under arrest and without use to them from 9th January, 2013 to 4th February, 2013, when the order of release was passed. The Plaintiffs therefore, are bound and liable to pay to the Applicant a sum of USD 6750 per day for 27 days 11 hours 45 minutes totalling to USD 185,554.67 to the Applicant.
(2) Bunkers consumed from 9th January, 2013 to 4th February, 2013 - USD 50,404.97.
When the vessel was in time charter, the bunkers consumed has to be paid by the Charterers, which in this case will be Defendant No.3. The fixture note dated 29th December, 2012 which Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 20 NMS-735-2013.doc this court has observed to be genuine provides as under :-
"-BOD ABT 775/825 MT IFO AND ABT 70/90 MT MDO BOR ABT SAEM AS ACTUALLY ON BOARD ON DELIVERY - ON DELIVERY, TOGETHER WITH FIRST HIRE PAYMENT, CHRTS TO TAKE OVER AND PAY FOR BUNKERS UPTO BUNKERING PORT AT USD 625 PER MT IFO AND USD 1020 PER MT MDO. CHRTRS TO BUNKER AT SUCH BUNKERING PORT TO MEET THE REDELY QTTIES. OWS ON REDEL TO TAKE OVER AND PAY FOR BUNKERS CHRTRS HAVE ALREADY PAID FOR, AT THE SAME PRICES. OWS HAVE RIGHT TO SUPPLY BUNKERS TO THE VSL CONSURRENT TO CHRTRS BUNKER SUPPLY PROVIDED SAME DOES NOT INTERFERE WITH CHRTRS BUNKERING OPERATION AND VSLS CARGO INTAKE".
That is why the fixture also provides as under :-
ABOUT 14.0 KNOTS LADEN/15.0 KNOTS BALLAST ON ABOUT 23.50 METRIC TONS IFO 380 CENTISTOKES - NIL MGO AT SEA IN PORT IDLE ABOUT 1.50 METRIC TONS MGO/PORT WORKING ABOUT 3.50 METRIC TONS MGO VESSEL HAS THE LIBERTY TO USE MGO WHEN MANOEUVRING IN/OUT OF PORTS OR IN NARROW/SHALLOW WATERS AND STARTING UP/TURNING OFF ENGINES. ABOVE FIGURES ARE UNDER GOOD WEATHER CONDITION UPTO AND INCLUDING BEAUFORT SCALE 4 AND DOUGLEAS SEA STATE 3. BUNKERS SUPPLIED TO BE IN ACCORDANCE WITH ISO-SPECIFICATIONS : IFO : ISO 8217:2005 (E) RMG 380 - MGO : ISO 8217:2005 (E) DMA NO MIXING OF BUNKERS ALLOWED."
This Court in its judgment of 4 th February, 2013 has also confirmed that other than 60.40 MTs IFO and 14 MTs MDO, the rest of the bunkers belonged to Defendant No.5. Certainly, the vessel has consumed the bunkers which belonged to Defendant No.5 during the Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 21 NMS-735-2013.doc period of arrest. The value of those bunkers have to be paid for. The Applicant has filed emails from the Master of the vessel for the period from 7th January, 2013 till 3rd February, 2013 providing the daily bunker consumption. From the emails, it is clear that the vessel during its period of arrest has consumed about 40.64 MTs of IFO and about 1.81 MTs of MGO. As per the quotations annexed, the average price of MGO is given as USD 1090 per M.T. There is no price mentioned for IFO. But since these are only enquiries, I would be inclined to take rate as mentioned in the fixture note, viz., USD 625 per MTs for IFO and USD 1020 per MTs for MDO. At that rate the IFO consumed for 40.64 MTs X USD 625 will be USD 25,400/- and 1.81 MTs X USD 1020 will be USD 1846.20 totalling to USD 27,246.20. This amount is also payable to the Applicant by the Plaintiff.
(3) Port Disbursement Account (PDA) - USD 18,929.20.
The case of the Applicant is that during the period the vessel was under arrest, the Applicant had incurred additional cost towards anchorage/pilotage/port dues/light dues/launch hire charges etc. The Applicants have relied upon the additional Port Disbursement Account provided by one Parekh Marine Agencies Private Limited who was the agent of the vessel. This is for the period Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 22 NMS-735-2013.doc when the vessel was under detention/arrest. The claimants have also annexed disbursement account for the entire period from the time the vessel arrived at the Port till she sailed. According to the Applicant for the entire period, the vessel was in Mumbai, the total cost incurred was Rs.64,55,375/- and for the period during which she was under
arrest/detention - 9th January, 2013 to 4th February, 2013, they have incurred additional cost of USD 18,929.20.
Mr. Patel, counsel for the Plaintiffs submitted that barring these two and the alleged proof of payment to Parekh Marine, the Applicants have not produced any document to support like invoices from the Port or Customs or for other heads.
Though the counsel for the Plaintiffs is correct, it is universal knowledge that the vessel cannot remain in Port without paying the Port dues like anchorage dues, pilotage or berth hire charges etc. The rates in Mumbai Port which is a Major Port under the Major Port Act, 1963 are fixed by Tariff Authority of Major Ports (TAMP) and in the Port Disbursement Account, the rates are given.
The Plaintiffs have not disputed these rates.
Therefore, there cannot be a dispute to the extent of USD 14,711/-. As for the remaining amount under the PDA, as no supporting are provided, I am not inclined to accept.
Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 ::: 23 NMS-735-2013.doc 17 Therefore, under the above three heads, the sum of USD 2,27,511.87 becomes payable.
18 The Plaintiffs are therefore, directed to pay to the Defendant No.3 a sum of USD 2,27,511.87 as compensation for the prejudice sustained by Defendant No.3 pursuant to the ex-parte order that the Plaintiff has obtained from this Court on 7th January, 2013.
This amount to be paid within four weeks from today.
19The Notice of Motion is disposed of.
20 The Applicant are also entitled to cost and the Plaintiff is directed to pay cost in the sum of Rs. 2 Lakhs for this Notice of Motion. This amount to be paid within two weeks from today in favour of the Advocates for Defendant No.3.
(K.R.SHRIRAM,J) Gauri Gaekwad ::: Downloaded on - 09/07/2014 23:50:47 :::