Best Excellence Corp, the owner of the MV Silvia Glory, applied for an order to vacate the arrest of its vessel, the return of the security deposited, and compensation for wrongful arrest. The respondent, Dan Bunkering (Singapore) Pte Ltd, submitted that it had a legitimate maritime claim/lien against the vessel arising out of unpaid bunkers supplied to the vessel in June 2018. According to the respondent, Bo Hai Marine Corp Ltd (Bo Hai) placed an order for supply of bunkers at the behest of the applicant. This order remains unpaid.

The applicant argued that the respondent had failed to make out an arguable prima facie case that the owner of the vessel was liable for the debt. At the relevant time, the vessel was time chartered to Lianyi Shipping Corp (Lianyi). The time charterparty provided that the charterer, not the owner, was liable to purchase and pay for the bunkers. The respondent was fully aware that the applicant was not liable for the debt and the arrest order had been obtained by misleading the Court. Bo Hai was acting solely on behalf of Lianyi and not on behalf of the vessel or its owner. The owner of the vessel was thus not liable in personam. The arrest on the basis of a maritime lien was legally untenable. Indian law does not create any maritime lien on the vessel for supply of bunkers and no contractual provision can supersede the legislation.

Held: Application allowed. The order of arrest stands vacated and set aside. The amount of security deposited by the applicant shall be refunded. Matter to be set down for final adjudication.

Section 5 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 (the Act), which provides the power to arrest a ship in rem, authorises the Court to arrest a ship for a maritime lien, as provided under s 9 of the Act. A contractual lien is not contemplated under s 9 of the Act. Earlier decisions that suggested that a contractual lien is a maritime lien no longer provide guidance in the light of the new Act and the Supreme Court decision in Chrisomar Corp v MJR Steels Pvt Ltd AIR 2017 SC 5530 (CMI149). The earlier decisions of this Court, which were relied upon by the respondent, are essentially based on the Admiralty Court Act 1861 and art 3 of the Arrest Convention 1952. Section 17(1)(b) of the Act repeals the Admiralty Court Act 1861 and s 5(1)(a) of the Act gives effect to art 3.1 of the Arrest Convention 1999.

It is thus quite clear that at the time of exercising admiralty jurisdiction and directing the arrest of the ship, there has to be an action in personam. When the question arises whether there should be an action in rem against the ship, it is only if a maritime lien exists that the ship can be arrested. Otherwise, in personam liability of the owner is an essential requirement of ship arrest. It is also abundantly clear on the basis of various international Conventions and admiralty decisions that, in this country at least, claims for necessaries, though maritime claims, do not give rise to a maritime lien. Yet another aspect clarified in Chrisomar is that the date on which it is relevant to know the ownership of the vessel is the date of arrest, and not the date of institution of the suit.