Indian Admiralty Act 2017- Interpretation and effect

The groundwork for Admiralty laws in India were laid simultaneously with the codification of Admiralty laws in England. Even post-independence, the issues relating to jurisdiction and enforcement of maritime claims were dealt under the various colonial acts as in force and enacted till 1891, even though British Admiralty laws had undergone several radical changes.

When compared to other seafaring nations, statutory admiralty law in India has lagged way behind, until recent years, when Indian legislators have introduced various enactments like the Major Ports Authorities Act 2020, the Recycling of Ships Act 2019, the Inland Vessel Act, 2021, and the Admiralty Act 2021.

It is pertinent to mention here that in the absence of legislative action, the Courts in India had to step in to fill some of the gaps by judicial intervention, most importantly by reading into Indian admiralty jurisprudence, the two Arrest Conventions of 1952 and 1999 respectively.

The Supreme Court in M. V. Elizabeth & Ors. Vs. Harwan Investment Trading P. Ltd. [1993 Supp (2) SCC 433] and Liverpool and London S.P & I Associations Ltd. v. M. V. Sea Success I [(2004) 9 SCC 512] respectively read into Indian admiralty jurisdiction the two arrest conventions i.e. 1952 and 1999 Arrest Conventions.

In 1986, a committee headed by Mr. Praveen Singh, the then Director-General of Shipping, Mumbai, reviewed the existing maritime laws and opined that the admiralty jurisdiction of courts was outdated and recommended enactment of a comprehensive legislation defining the scope and extent of admiralty jurisdiction.

The Commission’s recommendation was accepted and an Admiralty Bill was tabled, in the years 1993, 1999, 2005, 2009 and 2012 before the Parliament. However, it was only in 2017 that the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, was passed by the Parliament (“2017 Act”). Thereafter, vide the notification dated 22^nd February 2018, the Act came into force on 1^st April 2018.

Introduction to the Indian Admiralty Act

The Act is divided into four chapters containing 18 Sections. There are three important aspects of the Act-

1. expansion of the jurisdiction of courts,
2. conferring the power to adjudicate and settle maritime claims/disputes,
3. right to arrest or sale of the vessels related to maritime disputes.

The Admiralty Act operates in a completely different sphere but is a special act vesting admiralty jurisdiction in certain High Courts. It is a special law as regards Admiralty jurisdiction, legal proceedings in connection with vessels, their arrest, detention, sale and other matters connected therewith and incidental thereto.

Determination of priorities is a matter connected to and/or incidental to the sale of ships. However, due to a multiplicity of sources, there seem to be certain provisions in the Act that will in time require judicial interpretation, and therefore the preamble might play an important part as an aid to interpretation for the judiciary.

Application of the Indian Admiralty Act

The Act applies to every vessel within the jurisdiction of the High Court i.e. within the territorial waters under the jurisdiction of the particular High Court, irrespective of the registry/flag of the ship (including Indian flagged vessels) or place of residence of the shipowner. However, the Act limits the jurisdiction and creates the some exceptions to the extent of admiralty jurisdiction. It is pertinent to note that Section 1 (2) has also settled a long-standing judicial debate viz. arrest of Indian flagged vessels under Indian admiralty law.

Jurisdiction

Section 3 (1) of the Act extends admiralty jurisdiction to the High courts located in coastal states of India and extends it up to their territorial waters. The High Court of Calcutta, Bombay, Madras, Karnataka, Gujarat, Orissa, Kerala, High Court of Hyderabad for the State of Telangana and the State of Andhra Pradesh have been conferred with admiralty jurisdiction or any other High Court, as may be notified by the Central Government. Henceforth, no Pan-India arrest order can be passed as the jurisdiction of the various High Courts has been restricted to their respective territorial waters.

Maritime Claims

The Act provides for adjudication of identified maritime claims as well as securing of such maritime claims by the arrest of vessels in certain circumstances. Section 4 of the Act provides an exhaustive list of maritime claims, similar to the 1952 and 1999 arrest conventions. The wording of the Act indicates that a vessel can only be arrested for security with respect to maritime claims listed out in section 4. The sub-section (2) of section 4 states that “While exercising jurisdiction under sub-section (1), the High Court may settle any account outstanding and unsettled between the parties in relation to a vessel”. This explanation is problematic as it seems to depart from established principles of admiralty law, in as much as, it seems to empower admiralty courts to adjudicate upon non-maritime claims ‘outstanding and unsettled’ between the parties, arising in relation to any vessel and not just the offending/arrested vessel.

Ship Arrest & Sale of the Vessel

The legal regime relating to ship arrest and sale is dealt with in sections 5 to 8 of the 2017 Act. Besides these provisions, the Admiralty rules of the respective High Courts shall come into the picture while dealing with the ship arrest and sale in India. Section 5 and 6 of the 2017 Act sets out the mode of exercise of the admiralty jurisdiction, which may take the form of action in rem or action in personam. Section 7 of the Act sets out the restrictions on actions in personam in certain cases. Section 8 of the 2017 Act deals with the vesting of rights on the sale of vessels.

Section 5 of the Act has been framed for the purpose of providing security against a maritime claim subject to satisfaction of the Court on the anvil of the “reason to believe” test. For the purpose of arresting the ship in connection with which the claim arose, the section requires that the arresting claimant must identify first the relevant person who would be liable in personam when the cause of action arose.

That person can be either the owner, or the demise charterer, or the person in possession or control of the ship in connection with which the claim arose. Further, Section 5(2) permits sister-ship arrests. Section 5(2), if read with section 5 (1)(a) and 5(1) (b), provides that the High Court may also order the arrest of any other vessel in lieu of the vessel against which a maritime claim has been made.

It is pertinent to note that only one vessel can be arrested and not multiple vessels. In case of demise charterer ship arrest, the other ship could be demise charterer’s own ship or demise chartered vessel. But, what constitutes to be a sister-ship would be subject to Section 5(1).

A consolidated Act?

The 2017 Act repeals the four archaic admiralty laws which had been applicable in India, namely, (a) the Admiralty Court Act, 1861, (b) the Colonial Courts of Admiralty Act, 1890, (c) the Colonial Courts of Admiralty (India) Act, 1891, and (d) the provisions of the Letters Patent, 1865 in so far as it applied to the admiralty jurisdiction of the Bombay, Calcutta and Madras High Courts, as those provisions would become redundant with the enactment of this Legislation.

Although the legislators wanted to present this Act as a self-contained code[4], however, some provisions are ambiguous in nature and have some omissions. Some of the sections lack clarity and will require judicial intervention in the future.

The Act significantly departs from the well accepted notions established by the Arrest Conventions. There are certain areas left unattended by the Act.

There are no provisions on the release of a ship upon furnishing security. Nor is there any provision for re-arrest/multiple arrests of ships; security arrests pending arbitration or for that matter anything on beneficial ownership of a ship.

The Admiralty law of India is an outward looking enactment and therefore it will be seen as representative of general level of Indian enactments as well as the level of commercial and legal savviness of the legislature at the international platform. Thus, there was a critical need for enactment of a succinct statute, with minimal scope and requirement for judicial interpretation and intervention.

However, as mentioned above, the Act has left a lot of scope for judicial intervention and interpretation. In this regard the author humbly submits, that the Admiralty courts while interpreting the 2017 Act, and towards ensuring a commercially pragmatic and progressive interpretation should not hesitate from importing relevant principles of i) various international conventions including the aforementioned Arrest Conventions and ii) the other classical sources of admiralty law as mentioned above.

It is further humbly submitted that a great example of such an approach by the Hon’ble High Court of Bombay in the Siem Offshore case wherein the Hon’ble Court  implemented the principle laid down in Article 7 of the Arrest convention 1999 relating to arrest and security for arbitration in the Indian context.

For further reading on this and other associated topics, please refer to the soon to be released book “Introduction to Marine Law of India” written by Adv. Rahul Rajpurohit and published by Bloomsbury Publication. The official release of the book is slated to be in the second week of February 2022.