This was an appeal from a judgment of a Single Judge dated 8 November 2006 in favour of Jupiter Denizcilik Tasimacilik Mumessillik San Ve Ticaret Ltd Sirketi (Jupiter) for USD 100,798. Jupiter was a Turkish bunker supplier. According to Jupiter, it had supplied bunkers to the MV Lima II on the basis of orders placed by its owners, Lima Denizcilik Ve Ticaret Ltd Sirketi (Lima), but its invoice was not fully paid. Jupiter therefore filed Admiralty Suit No 15 of 2001 to arrest the MV Lima II at the Port of Kandla. The order of arrest of 17 May 2001 was served on the Port and Customs Authorities, and on the ship's agent. The warrant of arrest, however, could not be served on the master of the MV Lima II because it was in the outer anchorage. The ship jumped arrest and escaped from the Port of Kandla.

Jupiter subsequently learned that the MV Lima I was at the Port of Calcutta. Jupiter alleged that this vessel was also owned by Lima. By an injunction of 14 August 2001, the MV Lima I was restrained from leaving. Angsley Investments Ltd (Angsley) furnished security to effect its release. Angsley then sought leave to intervene in the suit. Angsley claimed that it was an interested party because it had purchased the MV Lima I from Mercury Shipholding Inc (Mercury), which had purchased the vessel from Lima. Angsley had thereafter sold the vessel to one Jain Udyog for demolition. The latter had asked Angsley to have the vessel released from various legal proceedings.

It was Angsley's case, first, that the MV Lima I was not a sister ship of the MV Lima II, either at the time of filing the suit or at the time of the grant of arrest (injunction) of the MV Lima I on 31 October 2001. Secondly, Jupiter's claim could not be termed as a claim for necessaries under s 5 of the Admiralty Courts Act 1861, but payment on the balance of an account, if anything. The Court thus did not have jurisdiction to entertain the suit.

The Single Judge held in favour of Jupiter. Angsley appealed.

Held: Appeal allowed.

Jupiter sought to make a claim in personam against Lima. Lima, however, is a foreign party who neither resides, nor carries on business within the jurisdiction of this Court. There is also no record of Lima having voluntarily submitted to the jurisdiction of this Court. In fact, Lima has chosen not to enter an appearance. Therefore, the suit filed against Lima is not tenable. A suit in personam qua a foreign defendant who is not within the jurisdiction of the Court and who has not voluntarily submitted itself to the jurisdiction, is not maintainable. It was contended that the suit was also filed as an action in rem against the MV Lima II, but there is nothing on the record to show that when the suit was filed the vessel was within the admiralty jurisdiction of this Court. In other words, there could be no action in rem in so far as the facts of the present case are concerned. At the highest, it would be an action in personam.

As Lima has neither entered an appearance nor furnished security, or submitted to the jurisdiction of this Court, the suit filed by Jupiter continues to be an action in rem against the MV Lima II. On this ground also the suit is not maintainable against Lima. It is trite law that an action in rem is converted into an action in personam if the owner of the vessel enters appearance, furnishes security, and submits to the jurisdiction of this Court. Until then, the suit continues to be an action in rem against the vessel: see Siem Offshore Redri AS v Altus Uber (CMI377) and Owners and Parties Interested in the Vessel MV Polaris Galaxy v Banque Cantonale De Geneve (CMI2000).

The Single Judge held that since the Court had ordered the arrest of the MV Lima II, it had assumed jurisdiction over the 'subject matter' of the suit. This overlooks the position that the arrest of a vessel will only confer jurisdiction over the vessel arrested, and not jurisdiction over the 'subject matter', or over parties which are not within its territorial jurisdiction. Thus, the Single Judge clearly erred in assuming jurisdiction either over Lima or the 'subject matter' of the suit.

The MV Lima I was restrained from leaving the Port of Calcutta by an injunction which was issued against the vessel without it being added as a party to the suit. A party cannot be added to an interlocutory application (here a notice of motion) without being a party to the suit. Since the MV Lima I was not a defendant to the suit, it could not have been made a party to the notice of motion. On this ground also, the appeal should be allowed.

Apart from the above, under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 (the Act) in order to proceed against a sister ship (assuming that the MV Lima I and the MV Lima II were sister ships at the time of arrest), the sister ship has to be made a party to the suit and has to be proceeded against in rem. This is evident from an analysis of s 5 of the Act. Though the Act only came into force on 1 April 2018, the purport of all these provisions was always followed: see Raj Shipping Agencies v Barge Madhwa (CMI782). Section 5(1) of the Act contemplates that to order arrest of a vessel for enforcement of a maritime claim, the vessel must be the subject of an admiralty proceeding. This would necessarily mean that the vessel has to be a party to the admiralty suit. Section 5(2), which contemplates arrest of a sister ship, is subject to s 5(1). Therefore, to obtain arrest of a sister ship, a plaintiff has to satisfy all the tests of s 5(1), which would include to make the sister ship a party to the suit. As noted earlier, the MV Lima I was never made a party to the suit. An order of arrest was never made against that ship. The injunction cannot be equated to arrest.

Jupiter should not have been able to obtain an injunction against the MV Lima I. An in personam action like an injunction is not maintainable against a vessel. Only an action in rem can be maintained against a vessel. Jupiter's suit continued to be an action in rem against the MV Lima II (where the warrant of arrest was never executed upon the vessel). There was no action in personam against Lima. Therefore, even if the MV Lima I is assumed to be owned by Lima, Jupiter should not have been allowed to obtain an injunction against the MV Lima I. An attachment (equivalent to a freezing injunction) is clearly in the realms of in personam proceedings.

What Jupiter attempted to do in the present case was to move a hybrid action, ie an in rem action against the MV Lima II and an in personam action (by way of an injunction) against the MV Lima I, and that also without joining the MV Lima I as a defendant in the suit. It is now settled that such a hybrid writ conjoining an action in rem and an action in personam is disapproved. A vessel is treated as a juristic person only for the limited purpose of an action in rem.

This means that the issue of whether Jupiter's supply of bunkers constituted a maritime claim or lien is academic. Jupiter could not serve its warrant of arrest upon the MV Lima II. It could never enforce a maritime lien against the MV Lima I. A maritime lien can only be enforced against the very vessel in respect of which it arose. A maritime lien cannot be enforced against a sister ship.