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Whether maritime claim against the charterer of a ship, who is not the de jure owner of the ship is maintainable? (Judgment 30 Sec Worth Read)

Name of the case - Sunil B. Naik V. Geowave Commander. AIR 2018 SC 2881 : 2018 (2) KLJ 32 : 2018 (2) KLT 610 : 2018 (4) Scale 352 : (2018) 5 SCC 505 : 2018 (2) Supreme 520

Date of Judgment – 05 March, 2018

Judges: Justice J. Chelameswar

Subject and sections involved –  Maritime Claim

Issue :

  1. Whether maritime claim against the charterer of a ship, who is not the de jure owner of the ship is maintainable?

 

Ratio of the case - A maritime claim against the charterer of a ship, who is not the de jure owner of the ship, and the endeavor to recover that amount through a restraint order against the ship owned by a third party is not maintainable.

The SC bench applied the principle laid down in the celebrated case in admirality law, MV Elisabeth &Ors. v. Harwan Investment & Trading Pvt. Ltd AIR 1993 SC 1014, that the foundation of an action in rem against a ship arises from a maritime lien or claim imposing a personal liability upon the owner of the vessel. Detention of a ship is done as security for a decree liable to be passed against the owners of the ship in personam. Since the claim is against Reflect Geophysical and not against the owners of Geowave Commander, it cannot be arrested for liability of Reflect Geophysical.  Justice Kaul, who authored the judgment, explained the decision with the illustrative example of a garnishee proceeding in the following manner:

As an illustrative example if we consider the principles of a garnishee order where amounts held by a third party on behalf of a defendant can be injuncted or attached to satisfy the ultimate claim, which may arise against the defendant. It is not as if somebody else’s money is attached in pursuance to a garnishee’s order. Similarly, for a claim against the owner of the vessel, a vessel may be detained and not that somebody else’s vessel would be detained for the said purpose. The crucial test would be of ownership, which in the present case clearly does not vest with Reflect Geophysical and the de facto ownership under their bareboat charter cannot be equated to a de jure owner, which is necessary for an action in personam.