The much-awaited Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 ("Act") is being brought into force from 1st April 2018. Unfortunately, this long awaited legislative reform has many omissions and shortcomings and is not a model of clarity.
The new Act significantly departs from the Arrest Conventions. For instance, arrest of a ship is now permissible even in execution of a judgement; ship owned by an entity which was at the relevant time the time/voyage charterer of another ship can be arrested; a vessel under demise charter can be arrested for a claim against the demise charterer of another vessel, if the demise charterers are the same.
There are no provisions on release of a ship upon furnishing security. Nor is there any provision for re-arrest/multiple arrest of ships; security arrests pending arbitration or for that matter anything on beneficial ownership of a ship.
Certain provisions of the Act could be interpreted as permitting a Court to settle even non-maritime claims, once a vessel has been arrested for a maritime claim.
The pan-Indian in rem, Admiralty jurisdiction that the Bombay and Calcutta High Courts exercised has been restricted. Instead, the Act seeks to confer Admiralty jurisdiction on High Courts whose territorial jurisdiction includes a coastline. The current drafting ironically leads to a situation where either all High Courts will exercise pan-Indian admiralty jurisdiction or every coastal High Court's jurisdiction will be limited to 12 nautical miles from any point on the coastline within its territorial jurisdiction.
The new legislation has generated more heat than light. The lack of clarity in key legal issues will lead to unnecessary litigation. It will be interesting to see how coastal High Courts grapple with admiralty issues, given their lack of experience in this branch of the law. Sadly, the new legislation has missed the opportunity to modernise and align Indian admiralty law with the Arrest Conventions and provide certainty to participants in international trade.
Posted on 22 June 2018 by Zarir Bharucha
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