Admiralty Jurisdiction of High Court

2020 CLD 70 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 3 & 4Sindh Chief Court Rules (Original Side), R. 731Admiralty Jurisdiction of High CourtRecovery of financesArrest of vesselTime charter and demise charter vessel, responsibility of

Plaintiff supplied bunker delivery service and was aggrieved of non-payment of outstanding amounts by charterers and owners of vessel in question

Plea raised by plaintiff was that since owners of vessel in question were informed about bunker services to charterers, they were liable to compensation and damages and sought arrest of vessel in question

Validity

Held, it was always of pivotal importance to first see as to type and nature of charterer vis-à-vis liability of owners and charterers to third parties and to each other

Time Charter mentioned that captain or master was although appointed by owners, yet remained under orders and directions of charterer as regards employment and agency

Ship in question was owner's ship and master and crew were his servants for all details of navigation and care of vessel but for all matters relating to receipt of and delivery of cargo and those earnings of vessel which flew into pockets of charterers

Bunker delivery note clearly and specifically mentioned that supply of bunkers by bunker supplier was on 'Charterers Account' and same was an admitted document by plaintiff

Nothing was placed on record to show that plaintiff ever approached owners of vessel before entering into any contract for supply of bunkers

No consent of owners of vessel was ever sought for making supplies of bunkers and liability of payment on part of owners in case of any default

Those were crucial elements as plaintiff's case as against owners were concerned

Owners had placed on record time charter agreement which clearly provided that bunkers supply and its liability was on account of charterer and not owners

High Court declined to interfere in as plaintiff could not be permitted to take undue advantage under Admiralty Jurisdiction of High Court by arrest of vessel and then compelling and dragging owners to pay amount being claimed when no case for a claim in personam was made out

Suit was dismissed in circumstances.

2013 CLD 362 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S. 3(2)Admiralty Jurisdiction of High CourtTerms "bottomry" and "respondentia"DistinctionWhen a loan is obtained by offering ship itself or cargo/freight etc. thereon as security, it is called "bottomry"

Whereas loan obtained by using only freight/cargo etc. on ship as security is called "respondentia".

2013 CLD 362 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S. 3(2)Admiralty Jurisdiction of High CourtAction in remScope

Whenever a loan is obtained for any purpose against mortgage of ship, the transaction is of "bottomry"; in such event, action in rem, is enforceable against the ship under Admiralty Jurisdiction under S.3(2)(q) of Admiralty Jurisdiction of High Courts Ordinance, 1980.

2012 SCMR 1267 SUPREME-COURT Judicial Precedent

Ss. 3(2)(h) & 4(4)Admiralty Jurisdiction of High CourtArrest of shipsAction in personamScopeAction in rem against a sister vessel/shipScopeContract of carriage

Plaintiff/consignor shipped first consignment through vessels 'A' (defendant) and 'B', while the second consignment was sent through vessels 'C' (defendant) and 'D'

Failure on part of the shipping companies (defendants) to obtain bank guarantees necessary for the release of consignments

Effect

Plaintiff suffered monetary loss and consequently filed two suits against the defendants in the High Court which were decreed in its favour

Appellate Bench of the High Court modified the decree of the High Court by reducing the amount of the decree on the basis that in the first suit vessel 'B' had not been impleaded as a defendant nor was it averred in the plaint that the vessel 'B' was a sister ship of 'A' and similarly in the second suit plaintiff had not impleaded vessel 'D' as a defendant nor had any averment been made in the plaint that said vessel was a sister ship of the vessel 'C'

Contention of the defendants was that the sister ships 'B' and 'D' had been wrongfully and unlawfully arrested in the suits because said ships were not parties and in the absence of pleadings to establish their relationship with other vessels, the sister ships could not be burdened with the liability for the plaintiff's claim

Validity

Claim of the plaintiff was based on the contract of carriage executed on behalf of the shipping companies and the modification agreed by them that the consignments would be released against bank guarantees and not on DAP basis as originally agreed

Admittedly the bank guarantees which the shipping companies were obliged to obtain on behalf of the plaintiff, before releasing the consignment to the consignee were forged

Defendants released the consignments without obtaining the bank guarantees because of which the plaintiff did suffer a monetary loss

Sections 3(2)(h) and 4(4) of the Admiralty Jurisdiction of High Courts Ordinance, 1980, made it clear that an action in personam could be founded on any agreement such as a bill of lading relating to the carriage of goods in a ship, and that admiralty jurisdiction of the court could also be invoked for an action in rem for the arrest of a sister ship such as 'B' and 'D' in the present proceedings

Even if it was held that the sister ships had not been impleaded as defendants in the two suits and that there was no averment in the plaint asserting a claim against the sister ships, the decree in personam could still have been passed against the defendants even if a decree in rem was not permissible against the sister ships in view of S.4(4) of the Admiralty Jurisdiction of High Courts Ordinance, 1980

Appellate bench of the High Court fell in error when it reduced the amounts decreed by the Single Judge of High Court

Judgment and decree of the Appellate bench of the High Court was set aside and that of the Single Judge of High Court was restored

Order accordingly.

2012 CLD 1319 SUPREME-COURT Judicial Precedent

Ss. 3(2)(h) & 4(4)Admiralty Jurisdiction of High CourtArrest of shipsAction in personamScopeAction in rem against a sister vessel/shipScopeContract of carriage

Plaintiff/consignor shipped first consignment through vessels 'A' (defendant) and 'B', while the second consignment was sent through vessels 'C' (defendant) and 'D'

Failure on part of the shipping companies (defendants) to obtain bank guarantees necessary for the release of consignments

Effect

Plaintiff suffered monetary loss and consequently filed two suits against the defendants in the High Court which were decreed in its favour

Appellate Bench of the High Court modified the decree of the High Court by reducing the amount of the decree on the basis that in the first suit vessel 'B' had not been impleaded as a defendant nor was it averred in the plaint that the vessel 'B' was a sister ship of 'A' and similarly in the second suit plaintiff had not impleaded vessel 'D' as a defendant nor had any averment been made in the plaint that said vessel was a sister ship of the vessel 'C'

Contention of the defendants was that the sister ships 'B' and 'D' had been wrongfully and unlawfully arrested in the suits because said ships were not parties and in the absence of pleadings to establish their relationship with other vessels, the sister ships could not be burdened with the liability for the plaintiff's claim

Validity

Claim of the plaintiff was based on the contract of carriage executed on behalf of the shipping companies and the modification agreed by them that the consignments would be released against bank guarantees and not on DAP basis as originally agreed

Admittedly the bank guarantees which the shipping companies were obliged to obtain on behalf of the plaintiff, before releasing the consignment to the consignee were forged

Defendants released the consignments without obtaining the bank guarantees because of which the plaintiff did suffer a monetary loss

Sections 3(2)(h) and 4(4) of the Admiralty Jurisdiction of High Courts Ordinance, 1980, made it clear that an action in personam could be founded on any agreement such as a bill of lading relating to the carriage of goods in a ship, and that admiralty jurisdiction of the court could also be invoked for an action in rem for the arrest of a sister ship such as 'B' and 'D' in the present proceedings

Even if it was held that the sister ships had not been impleaded as defendants in the two suits and that there was no averment in the plaint asserting a claim against the sister ships, the decree in personam could still have been passed against the defendants even if a decree in rem was not permissible against the sister ships in view of S.4(4) of the Admiralty Jurisdiction of High Courts Ordinance, 1980

Appellate Bench of the High Court fell in error when it reduced the amounts decreed by the Single Judge of High Court

Judgment and decree of the Appellate Bench of the High Court was set aside and that of the Single Judge of High Court was restored

Order accordingly.