Case analysis: Aurobindo Pharma Limited vs Nippon Yusen Kasushiki Kaisha & Ors. (Commercial Appeal (L) No. 18060 of 2023)
By – Anshu Singh Rathore (Associate) and Rohan Janardhanan (Managing Partner)
Issue: Whether a sister-concern Vessel be arrested under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act (“Admiralty Law”)?
Facts:
The commercial appeal contests the Bombay High Court (“HC”) Order dated June 7, 2023, in Interim Application No. 540 of 2020, part of Commercial Admiralty Suit No. 14 of 2020. This Interim Application, filed by Respondent No. 1 (“original Defendant No. 2”), requested the dismissal of the suit and the return of the security deposit made by the Defendants. In this case the Appellant herein (“original Plaintiff”) had entrusted the Respondent No. 2 herein (“original Defendant no. 1 vessel”) for the carriage of its goods, however, while in transit the vessel caught fire and the goods of Plaintiff were carried to its destination by another vessel. In turn of events, the goods of the Plaintiff were shipped back to the load port from the discharge port. Thus, Plaintiff preferred a Commercial Admiralty Suit against Defendant No. 1 – a vessel, Defendant No. 2 – a corporate entity having its office in Japan and Defendant No. 3 – a company incorporated in India; a subsidiary company of Defendant No. 2. The HC by way of the impugned Order dated 7th June 2023 had dismissed the Commercial Admiralty Suit filed against the Defendant no. 1 vessel, as well as directed that the cash deposit, as security against the arrest of the vessel be returned to Defendant no. 2 along with interest accrued thereon and the suit to proceed as against the Defendant no. 2 and Defendant no. 3. Hence, this present appeal.
Submissions:
Appellant’s Submission:
The Advocate for the Appellant submitted that the company called ‘NYK Theseus’ is the registered owner of the Defendant No. 1 vessel. Thus, Defendant No. 1 and Defendant No. 2 are essentially the same entity. Therefore, the Defendant No. 1 vessel should be held responsible for enforcing the liability of Defendant No. 3.
Respondent’s Submission: Advocate for the Respondent submitted that the Defendant No. 1 vessel which ought to be arrested by Plaintiff, and the vessel on which the goods of Plaintiff were carried from load port to discharge port, both the vessels were owned by two different entities. Thus, the vessel is not a sister concern.
Judgement:
The HC noted that under Admiralty law, a sister concern vessel can be arrested for enforcing the maritime claim. However, in this case, as per the averments made in the Plaint neither the vessel nor owner of the vessel which carried the said goods of the Plaintiff from the load port has been made a party as defendant in the present suit. The HC rejected the claim made by the Appellant that the Defendant No. 1 vessel should be considered as a sister vessel of the vessel that carried the goods of Plaintiff from the load port because the owner of both the vessels is a common company ‘NYK Line’. Further, after the perusal of the plaint, HC noted that the owner of Defendant No. 1 vessel is not being joined in the plaint and the vessel on which the goods were carried has not been made a party to the proceedings before this court. Therefore, HC held that prima facie, there is no case made out by Plaintiff that Defendant No. 1 vessel is a sister concern of the vessel that carried the goods of Plaintiff. Hence, the HC observed that the suit’s claim will not fall under the provisions of Section 5 (2) of the Admiralty law. Therefore, in conclusion, the HC rejected the present appeal and upheld the findings of its earlier Order dated 7th June 2023.
Our View:
It is to be noted that the concept of the sister ships is well incorporated under Section 5 of Admiralty Law, as the arrest of sister ships is a significant tool in the arsenal of the claimant to ensure that the claims involving maritime disputes and liabilities are enforced and settled. However, at the same time, the claimant must note that establishing the ownership of the sister ship can be a complex task and requires in-depth documentation and investigation.
Reference: Aurobindo Pharma Limited vs Nippon Yusen Kasushiki Kaisha & Ors. (Commercial Appeal (L) No. 18060 of 2023) writer.editor.GO_TO_TOPwriter.editor.GO_TO_BOTTOM
