Arrest of ships

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.