1. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 ("Act") is being brought into force from 1 st April 2018. Some of the salient features of the Act are enumerated below.
Commencement of Proceedings
2. Where to file – The admiralty jurisdiction has been extended to all High Courts whose territorial jurisdiction includes a coastline. However, the current drafting leads to an ambiguous situation where either all High Courts will exercise pan-India admiralty jurisdiction or every High Court's jurisdiction will be limited to 12 nautical miles from any point on the coastline within its territorial jurisdiction.
3. What to file for – The admiralty jurisdiction of Indian courts is limited to arrest of ships, and arrest of cargo is not allowed. The list of claims to be treated as maritime claims is largely similar to that in the Arrest Convention(s), however arrest for security pending arbitration seems to be excluded. For collision cases the jurisdiction is limited to, cases wherein the cause of action (i.e. collision) arises in India or if the Defendant resides or carries on business or personally works for gain in India.
4. When to file – The Act is ambiguous but the language suggests that presence of vessel within jurisdiction is a pre-condition for filing of admiralty suits.
5. Risk in filing – The requirement for providing an undertaking/security for damages arising out wrongful arrest/excessive security is made discretionary.
6. Which vessel – Ambiguous provisions but seems to suggest that sister-ship/associate ship arrests are allowed however, a vessel owned by the time/voyage charterer of another vessel cannot be arrested. However, a vessel under demise charter can be arrested for the claim against another vessel under the demise charter of the same person. However, the Act is silent on "beneficial ownership".
7. Release upon security – The Act has no provision for release from arrest (of a vessel) upon deposit of security, additionally there is no provision for re-arrest and multiple arrest upon inadequacy or devaluation of security.
8. In a stark departure from admiralty jurisprudence, the current drafting leads to an ambiguous situation where the Act could be read to allow a Court to settle even non-maritime claims between the parties, once an arrest has been affected between the parties for a maritime claim.
9. Sale pendent lite – The concept of sale 'pendente lite' is recognized, and the same is to be completed within 45 days from arrest/abandonment of the vessel with a maximum extension thereafter of 30 days.
10. Maritime Liens and priority -The Act incorporates the heads of maritime liens as stated in Liens and Mortgages Convention 1993, however contractual liens are not recognized. The priority of claims is i) maritime liens; ii) Claims for enforcing mortgages and other similar charges; iii) all other claims.
11. Interlocutory appeals – The Act allows intra-court appeals from all interlocutory(interim) orders.
12. Transfer of proceedings – The Act empowers the Supreme Court to transfer admiralty proceedings from one High Court to the other at any stage. However, the Act doesn't lay down any guidelines for the same.
13. The Act is therefore a mixed bag and the correct and expedient judicial guidance will be fundamental to the success or otherwise of this enactment.
Posted on 28 June 2018 by Zarir Bharucha
The above is a generic analysis and should not be regarded as a substitute for specific advice based on the facts of a client's objectives and specific commercial agreements reached. Please do reach out to us at email@example.com for any queries.