Gujarat High Court
Hind Offshore Private Limited vs Praxis Energy Agents Dmcc on 4 March, 2025
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/OJA/5/2023 ORDER DATED: 04/03/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/O.J.APPEAL NO. 5 of 2023
In R/ADMIRALTY SUIT NO. 26 of 2017
==========================================================
HIND OFFSHORE PRIVATE LIMITED & ANR.
Versus
PRAXIS ENERGY AGENTS DMCC
==========================================================
Appearance:
MR AMITAVA MAJUMDAR, ADVOCATE WITH MR HARSH N
PAREKH(6951) for the Appellant(s) No. 1,2
MS PAURAMI B. SHETH(841) for the Opponent(s) No. 1
==========================================================
CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE DEVAN M. DESAI
Date : 04/03/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV)
1. This OJ Appeal has been filed by the original defendant in Admiralty Suit No. 26 of 2017. The appellant had filed an application before the learned Single Judge to vacate and/or set aside the ex-parte order of arrest dated 07.10.2017 in the present suit. The learned Single Judge by an IA judgement dated 14.11.2022 dismissed the application. Page 1 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025
NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined
2. Facts in a nutshell have been set out by the learned Single Judge which read as under:
"3. The facts in nutshell are that the applicant is the registered owner of the defendant-vessel which is an Indian Flagged Vessel. The applicant is a company incorporated under the laws of India and has entered appearance before this Court under protest for the limited purpose of vacating the order of arrest dated 07.10.2017 passed against the defendant-vessel.
4. It is the case of the applicant that the plaintiff has no maritime lien against the defendant-Vessel as per the provision of section 9 of the Admiralty (Jurisdiction And Settlement Of Maritime Claims) Act, 2017 [for short 'the Admiralty Act'] as the applicant has already given the vessel on time charter basis to one Asiana Offshore PTE Limited on 01.02.2017, who, in turn, had further given the defendant-vessel on time charter basis on 02.02.2017 to M/s. Unison Engineering and Construction Pvt. Ltd. ['Unison' for short], therefore, the applicant-the owner of the defendant vessel cannot be said to be liable for payment of bunker oil supplied by the plaintiff to the vessel at the request of Unison.
5. It is also the case of the applicant that there is correspondence between the Unison and lawyer of the plaintiff to the effect that liability of the payment of bunker Page 2 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined oil is that of Unison and not of the applicant or the defendant-vessel. It is further averred in the application that the plaintiff was aware that it has remedy against the Unison- Time charterer and not the applicant-Hind Offshore Pvt. Ltd. or the defendant-Vessel and therefore, the Admiralty Suit is required to be dismissed and the security amount put up by the applicant to get release of the vessel is required to be returned to the applicant."
3. Mr. Amitava Majumdar, learned advocate assisted by Mr. Harsh Parekh, learned advocate for the appellant made the following submissions:
3.1 That the order of the learned Single Judge rejecting the application is without appreciating the fact that the respondent - original plaintiff had not made out a prima facie case for an exparte order of arrest of defendant no. 1 vessel. He would submit that the suit and the application for arrest was moved by the plaintiff by stating incorrect facts and/ or without disclosing material facts. He would submit that in fact, though it was the case of the plaintiff that the vessel was being beached at the Page 3 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined Alang port and would then be broken, in fact the vessel was merely plying as a tug. Based on this misleading statement that the vessel was being beached for shipbreaking the plaintiff obtained the order of arrest.
3.2 That the learned Single Judge failed to appreciate that there was no maritime claim against the appellant. That apart from not having maritime claim, the plaintiff had no maritime lien against the defendant vessel. He would further submit that there is no privity of contract between the plaintiff and the appellant Hind Offshore Private Ltd. as the registered owner of the defendant no. 1 vessel or that the plaintiff is entitled to an order of arrest of the vessel for the supply of necessaries. The plaintiff failed to establish that there was personal liability on the part of the appellant as the owner of the vessel.
Relying on the documents and correspondences annexed with the plaint, which Mr. Majumdar has Page 4 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined referred to and relied upon, he would submit that the bunkers were not supplied at the instance of the appellant but at the instance of Unison/Time Charterer. For this, he would rely upon the invoices indicating that the vessel was chartered by the appellant to Asiana Offshore PTE Ltd by way of a time charter party dated 01.02.2017 who in turn sub-time chartered the vessel to Unison/Time Charterer by way of time charter party on 02.02.2017. He would therefore submit that in accordance with the clauses of the charter party it was Unison/Time Charterer who had to provide and pay for the bunkers and therefore there was no privity of contract between the present appellant and the plaintiff.
3.3 Mr. Majumdar would rely on the correspondences between the appellant and Unison/ Time Charterer namely emails dated 06.02.2017 and 07.02.2017 to submit that from the emails it was Page 5 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined clear that it was Unison/Time Charterer who was under the obligation as per the purchase order dated 08.02.2017 to honour the purchase order and make payment to the plaintiff. The contract as per the purchase order would therefore between the party plaintiff and Unison/Time Charterer. 3.4 That in accordance with the judgement of the Apex Court in the case of Chrisomar Corporation vs. MJR Steels Private Limited and Another [(2018) 16 SCC 117], the bunker supplier does not have a maritime lien over bunkers supplied to the vessel. Relying on paragraph no. 25 of the said decision, he would submit that under the Indian Case Law on the subject read with various international conventions, that as far as claims for necessaries are concerned, there is no maritime lien on bunkers.
3.5 That even as per the correspondence sent by Page 6 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined M/s. K & P Law Associates dated 21.07.2017, the erstwhile lawyers of the plaintiff in context of the payment which is a subject matter of dispute in the instant case, the letter and the notice were addressed to Unison/Time Charterer and admittedly therefore it was clearly borne out from the said notice that Unison/Time Charterer is the contractual counterpart and that party was alone liable to the plaintiff for settling the outstanding invoices. These communications were not disclosed by the plaintiff in the plaint or in their exparte application for arrest and therefore on this ground, the learned Single Judge ought to have vacated the exparte relief on the application so made by the appellants. He would also in support of his submissions that the learned Single Judge failed to consider the issue of prima facie case did not consider the law as enunciated by the Apex Court in the case of Liverpool & London S.P. & I Association Ltd. vs. M.V. Sea Success I and Page 7 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined Another reported in (2004) 9 SCC 512. 3.6 Relying on a decision of the Mumbai High Court in the case of M/s. Kimberly -Clark Lever Private Ltd. vs. M.V. 'Eagle Excellence' rendered in Appeal No. 240 of 2007, particularly paragraphs no. 50-53, Mr. Majumdar has buttressed his submissions that the plaintiff failed to establish a prima facie case regarding the right and the claim. He would submit that it was not a case where the plaintiff had "a reasonably arguable best case" and therefore in failing to hold that the plaintiff had no prima facie case, the learned Single Judge committed an error in not granting the application for vacating of stay granted exparte in context of the arrest of the vessel.
4. Ms. P.B. Sheth, learned advocate for the respondent original plaintiff would submit that no misleading statements were made in the plaint. She would further Page 8 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined submit that on reading the plaint, particularly paras 5 to 8 thereof, it is very clear that Unison Engineering on behalf of the defendant vessel had approached the plaintiff company. On 07.02.2017, the plaintiff and the defendant vessel and/or Hind Offshore Private Ltd. and/or Master and/or Owners and/or Managers etc. had entered into a contract for supply of bunkers. She would invite the court's attention to the purchase order and submit that the statement was made in the plaint which cannot be said to be misleading as reading of the purchase order clearly indicated that the buyer was the vessel and/or other entities.
4.1 Ms. Sheth would further submit that as per the general terms and conditions of the contract which are on record, it was clear that there was a clause namely clause 10 providing for lien. The clause clearly indicated that it was agreed and acknowledged that the sale of products to the buyer and/or their acceptance on the vessel create a maritime lien on the vessel. The clause further Page 9 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined indicates that in case the buyer is not the owner of the vessel, it hereby expressly warrants that it has the authority of the owner to pledge the Vessel's credit and create a lien upon her. Relying on the general terms and conditions of the contract, she would submit that the buyer is defined as one who is jointly and severally liable. 4.2 Ms. Sheth would further submit that from the correspondence which took place between the parties, it is clear that at the time when the arrest was made, the reliance placed on the invoice dated 08.02.2017 was of no consequence. The question whether there is a sub charter from Asiana Offshore to Unison Offshore is a question which can be only decided at the stage of trial. She would rely on a decision of the Bombay High Court in Commercial Appeal No. 287 of 2018 in the case of Socar Turkey Petrol Enerji Dagitim vs. M.V. Amoy Fortune (IMO 9583639).
5. Having considered the submissions made by the Page 10 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined learned counsel for the respective parties, what we note is that the order which the appellant sought to vacate was an order dated 07.10.2017 of the arrest of the defendant vessel. Reading the averments in the plaint indicate that on 02.02.2017, Unison Engineering Constructions Pvt. Ltd. on behalf of the defendant vessel approached the plaintiff vessel company and made request for a quotation for supply of bunkers. The purchase order issued subsequently which is on record indicates that the supply was to be made to the vessel, the defendant herein. 5.1 On 07.02.2017, a contract was entered into between the plaintiff and Unison. The general terms and conditions of the contract are on record. The term 'buyer' has been defined in clause 2.04 of the terms and conditions. Reading of the term 'buyer' indicates that the responsibility is joint and several. Maritime lien is also defined in clause 10 of the general terms of the contract. Reading the clause indicates that where products are supplied to a vessel, in addition to any other security, the Page 11 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined agreement is entered into, the products is supplied upon the faith and credit of the vessel, it is agreed and acknowledged that the sale of products to the buyer on the vessel create a maritime lien over the vessel for the price of the products. Invoices accordingly have been issued by the plaintiff company in the name of the buyer i.e. the defendant vessel.
6. The facts in the case relied upon by Mr. Majumdar in the case of M.V. Silvia Glory vs Dan Bunkering (Singapore) PTE Ltd. rendered in Civil Application No. 1 of 2019 with Admiralty Suit No. 8 of 2019 would indicate that what was noticed by the court was that the bunkers' delivery receipts specifically provided that the bunkers were acknowledged and accepted solely for the account of time charterers and not for the account of the said vessel or her owners. It was in this case that the court held that no lien on the said vessel or owner could arise. In the facts of the present case when the purchase order, the invoice and the general terms and Page 12 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined conditions of the order are read conjointly what is apparently clear is that though Mr. Majumdar, learned counsel for the appellant would want us to believe that there is no privity of contract between the plaintiff and the appellant, we beg to disagree with the submissions of learned counsel inasmuch as in the invoices as well as in the purchase order and the contract, it is apparently clear that Unison Engineering Constructions Pvt. Ltd on behalf of the defendant vessel had approached the company for a quotation of supply of bunkers. The contract dated 07.02.2017 bearing contract no. 20115 for supply of bunkers specifically has the remark that the contract is entered into by a buyer M.V. Lady Sandra and/or Hind Offshore Pvt. Ltd. and/or Master and/or Owner and/or Managers and/or Operators and/or Unison Construction. It was therefore a categorical assertion made in the memo of the plaint accordingly. This was also reflected in the purchase order dated 08.02.2017.
7. All these facts therefore are a pointer that the Page 13 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined contention of the learned counsel for the appellant that there was no privity of contract between the defendant and the plaintiff is a case which can only be decided at trial. The learned Single Judge while refusing to vacate the interim relief has in light of these facts come to conclusion that the plaintiff had a reasonably arguably best case and/or a prima facie case which terms have the same meaning.
8. We have had the benefit of perusing the reasonings set out by the learned Single Judge. The learned Single Judge has extensively, while noting the arguments which were reiterated before us by learned counsel for the appellant, found reasons not to entertain the application for vacating interim relief i.e. the exparte arrest of the vessel. The reasonings read as under:
"On perusal of the above facts, it appears that the plaintiff in the said case has supplied the bunkers on request of OW Bunkers which was neither an owner of the vessel nor the Time Charterer as in the facts of the present case but a third party and Page 14 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined therefore, the Court, after relying upon the various case laws as narrated here-in-above, came to the conclusion that no maritime claim would lie against the third party who is neither the owner of the vessel or a Time Charterer and therefore, the said decision cannot be applied in the facts of the present case. There is no dispute by the plaintiff that the supply of the bunker would amount to a maritime lien under the provisions of the Admiralty Act and therefore reliance placed on behalf of the applicant on the decision of Chrisomar Corporation (supra)is also not required to be gone into. Reliance placed on the decision of the Liverpool & London S.P. & I Association Ltd(supra)is only to the extent of entertaining this application on merits considering the documents relied upon by the defendant as well as the plaintiff and therefore, as this application is already entertained by this Court for vacation of the stay, as to whether there is any prima facie case, balance of convenience or irreparable injury would be involved in the facts of the case or not and therefore, the said decision would also not be squarely covered and based upon the same, this application is decided exhaustively at this stage.
11. The Apex Court in case of Videsh Sanchar Nigam Ltd (supra) has held that the admiralty action is an action in rem and when the claim is not found to be vexatious but is triable, the trial is required to be undertaken when there is strong triable case for the reasons stated earlier as this Court is required to consider as to whether the applicant-the owner Page 15 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025 NEUTRAL CITATION C/OJA/5/2023 ORDER DATED: 04/03/2025 undefined of the defendant-Vessel is any way liable for the claim made by the plaintiff more particularly, when the contract as well as the invoice raised by the plaintiff also includes the name of the applicant and therefore, after leading the evidence by both the sides, the Court would be able to come to the conclusion as to whether or not the applicant-the owner of the defendant-vessel would be liable to make payment to the plaintiff to satisfy the claim made by it for supply of the bunkers to the defendant-Vessel.
12. In view of the above reason, this application is required to be dismissed and is accordingly dismissed. No order as to costs. Parties are directed to proceed with the suit by agreeing to the acceptance/denial and further supplying the proposed issues before the next date of hearing."
9. For the aforesaid reasons, appeal is dismissed.
(BIREN VAISHNAV, J) (D. M. DESAI,J) DIVYA Page 16 of 16 Uploaded by DIVYA PILLAI(HC00199) on Mon Mar 10 2025 Downloaded on : Mon Mar 10 21:25:37 IST 2025