High Court of Kerala on Admiralty Jurisdiction: An opportunity missed? V. N.

Haridas* The recent judgment by the High Court of Kerala on Admiralty law1 raises serious concerns for the shipping community and also for maritime lawyers. High Court of Kerala through this judgment directs any person approaching this court invoking the admiralty jurisdiction of this Court shall institute suit in accordance with the procedure contemplated under the Code of Civil Procedure, 1908. Such suit shall be tried by this Court following the procedure prescribed under the Code of Civil Procedure2. Further in the procedural side the judgment provides that the rules framed by the Madras High Court in so far as they are not inconsistent with any other law for the time being in force and with appropriate modifications shall apply to the conduct of Admiralty suits until the High Court of Kerala modifies the said Rules or the Legislature intervenes in this regard3. The significance of the judgement is on the attribution of original civil jurisdiction to the High Court of Kerala which it never possessed so far. Before examining the implications of this judgment an attempt is made to analyse the existing admiralty jurisdiction of High Court of Kerala. The landmark decision in M. V. Elisabeth4 has provided admiralty jurisdiction to all High Courts in India apart along with the chartered High Courts in India. High Court of Kerala has exercised several times this special jurisdiction regarding admiralty. The usual procedure before the High Court of Kerala preceding the judgment in M. V. Free Neptune is that, whoever intends to initiate an action in rem by arresting a foreign vessel has to file a writ petition under Article 226 of the Constitution of India seeking a direction to the port authorities to detain the foreign vessel relying on section 443 of the Merchant Shipping Act5. The combined application of Constitution of India and Merchant Shipping Act along with the ratio in M. V. Elisabeth in dealing admiralty cases by the High Court of Kerala was necessitated due to the fact that the Court is not a chartered High Court under Colonial Courts of Admiralty Act 1891 and does not possess original civil jurisdiction as they possess by virtue of Letters of Patent Act 1862. Once the vessel is detained and the owner has appeared before the court the matter is relegated to the proper forum for adjudication by the High Court of Kerala and the proceedings continue in personam. It is often misconstrued and confused with the terms Admiralty suit6, Admiralty jurisdiction, maritime claim and arrest of vessel and M. V. Free Neptune is not free of this difficulty. Admiralty jurisdiction implies that the vessel has a juridical personality- almost corporate capacity, having not only rights but liabilities (some times distinct from those of the owner) which may be enforced by the process and decree against vessel, binding upon all interested in her and conclusive upon the world. Admiralty jurisdiction in appropriate cases administers remedies in
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* LL.M. Maritime Law (University of Southampton). Advocate, High Court of Kerala. M.V.Free Neptune v D.L.F.Southern Towns Private Ltd. 2011(1) KLT 904 2 Supra n (1) para 23and 24 3 Supra n (1) para 24. 4 M.V.Elisabeth v Harwan Investment & Trading Pvt. Ltd, Goa AIR 1993 SC 1015 5 Adv.V.M.Syamkumar, Arrest of Ships for Enforcing Maritime Claims Available at http://admiraltylawkochi.blogspot.com/search/label/Arrest%20of%20Merchant%20vessels%20in %20Cochin [14 July 2011] 6 Emphasis added by the author

rem, i.e, against the property, as well as remedies in personam i.e., against the party personally7. Admiralty jurisdiction confers upon the claimant a right in rem to proceed against the ship or cargo as distinguished from a right in personam to proceed against the owner. The arrest of the ship is a mere procedure to obtain security to satisfy judgment. Thus admiralty suit is only a proceeding in rem initiated to arrest a foreign vessel in order to secure a security if the claimant succeeds to procure a judgment or award in future. Now coming to the present judgment, The Honble High Court framed four issues. The four issues formulated by the court are as follows; 1. Whether the claim such as the one made by the petitioner is a maritime claim as understood in law in this country? 2. If it is a maritime claim, whether this court is the appropriate forum for adjudicating such maritime claims? 3. In the absence of any law structuring the admiralty jurisdiction of this Court [which has been declared to be inherent in this court in M. V. Eisabeths case] what are the limits and contours of the said jurisdiction? And 4. What is the procedure to be followed in exercising such jurisdiction? The facts of the case provides that along with other prayers the petitioner sought an interim prayer for the arrest and detention of the 1st respondent ship which, at that point of time, was berthed at Chennai port8. The berthing of M.V. Free Neptune in Chennai Port itself would have raised the primary issue that the High Court of Kerala by exercising its Admiralty jurisdiction can arrest and detain a foreign vessel which was out of its territorial limits or jurisdiction? It is a settled position of law that in an action in rem the ship should be within the jurisdiction of the court at the time proceedings are started9. In this aspect also see Section 3(15) of the Merchant Shipping Act, 1958 defines High Court, in relation to a vessel, as the High Court within the limits of whose appellate jurisdiction... It would mean a foreign vessel falls within the jurisdiction of the High Court of Kerala only if the vessel happens to be at the territorial limits of Kerala at the relevant time. It has been reiterated by the High Court of Kerala itself that High Court of Kerala cannot detain a foreign vessel if it happens to be out of its territorial limits. 10 Therefore the present decision by Division Bench in M. V. Free Neptune affirming single bench decision to detain a foreign vessel which was at Chennai port at relevant point of time is apparently either wrong or per incuriam. In M. V. Free Neptune the Division Bench by overlooking the fundamental principle of admiralty jurisdiction, proceeds to consider what could be the procedure to be followed in exercising such jurisdiction. The Court presumes that disputes falling within the admiralty jurisdiction arise out of contractual rights and obligation which normally requires investigation into factual allegations. In such cases, a suit is the appropriate proceeding and such suit shall be tried by this Court (read High Court of Kerala) following the procedure prescribed under the Code of Civil Procedure11. Here the Court confuses with the legal concepts mainly exercise of admiralty jurisdiction and adjudication of maritime claims.
7

Benedict, The Law of American Admiralty Vol.1 (6th Ed).p.3. Quoted in M. V. Elisabeth v Harwan Investment & Trading Pvt. Ltd, Goa AIR 1993 SC 1015 8 Supra n(1) para 6.Emphasis added by the author 9 Supra n (4) para 56, 78, 89 and 94. 10 Ocean Lanka Shipping co (pvt) ltd v MV Janate. 1997(1) KLT 369 11 Supra n (1) para 23 and 24.

Exercising admiralty jurisdiction of a High Court via an Admiralty Suit is having a very limited purpose of securing a security as discussed above. Arrest of a foreign vessel via admiralty suit is regarded as a mere procedure to obtain security to satisfy judgment. The petitioner claimant may therefore detain the foreign vessel by obtaining an order of attachment whenever it is feared that the ship is likely to slip out of jurisdiction, thus leaving the petitioner claimant without any security. Such an action is provisional in character which induces the owner to submit to the jurisdiction of the court, thereby making himself liable to be proceeded against by the plaintiff in personam. Once such owner submits to the jurisdiction the matter will be relegated to the proper forum for the adjudication.12 As the Court rightly observed that the disputes falling within the admiralty jurisdiction arises out of contractual rights and obligation, it is not quite uncommon that the parties agree themselves with respect to the form and forum of dispute resolution. It is part of their freedom of contract to choose either to go for arbitration subject to English law or to go for mediation in Paris. This raises the legal issues that how High Court of Kerala can deprive of the parties their freedom of contract and insist them to subject to a protracted civil suit at High Court of Kerala? Before rushing such a conclusion the Court ought to have considered the difference between Admiralty Suit and Adjudication of Maritime Claim. At present different Subordinate Courts and Munsiff Courts in Kerala are adjudicating different maritime claims. Application of the ratio in this Judgment will result in the transferring of all matters pending before those courts to High Court of Kerala. If maritime claims can be resolved only by civil suit in High Court, will it be a ground for appeal to an unsuccessful party that the dispute has been resolved in wrong forum without having any jurisdiction? Moreover this judgment attributes original civil jurisdiction to High Court of Kerala which so far neither existed nor exercised. The question arises are whether this jurisdiction is exclusively for maritime claims? Also whether a High Court can assume jurisdiction by itself and thereby oust jurisdiction of its subordinate courts? The court also ought to have considered the existing procedure for admiralty cases before outlining a novel one. The problems with respect to Admiralty Law subsist all over India which can only be resolved through a comprehensive national legislation. The issues peculiar to Kerala are that of frivolous arrest13 and it can be effectively resolved by proper appreciation of law by the judges and allowing ship owners or the vessel to file a general caveat against the world at large thereby before any motion of arrest is issued, notice to be given either to the vessel or to her representative. High Court of Kerala even though rightly observed admiralty law as a peculiar branch of law which demands rather an academic treatment failed to understand the fundamental principles behind admiralty jurisdiction. Failure to appreciate the basic principles and existing procedures for the exercise of admiralty jurisdiction unfortunately mark this judgment in the history of admiralty jurisprudence as an opportunity being missed by an amateurish discourse.

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Supra n (4) para 46. For a detailed discussion pertaining to vessel arrest in kerala, see Adv.V.M.Syamkumar, Arrest of Ships for Enforcing Maritime Claims Available at http://admiraltylawkochi.blogspot.com/search/label/Arrest%20of%20Merchant%20vessels%20in %20Cochin [14 July 2011]