MT Chemical Arrow (the vessel), carrying a cargo of caustic soda lye, was stranded in the Kakinada Port due to the engine developing serious problems. There followed a number of applications for the arrest of the vessel.

The claim of the crew

The captain and crew (the crew) moved a petition for the arrest of the vessel for non-payment of wages. The crew also sought a direction that the power to the vessel not be disconnected as its power generating capacity was affected. The crew further sought a declaration that the amount owed to them was USD 435,643.64 calculated to 10 April 2013, a direction that the owners of the vessel to pay their future wages to the date of their signing off from the vessel, and the cost of the repatriation to their home towns.

The crew filed for the sale of the vessel and since the defendant/owners did not object, on 9 March 2013 the court invited sealed tenders for the sale of the vessel.

The claim of the charterer

The owner of the cargo, Dharangadhara Chemical Works Ltd (DCW Ltd) had entered into a charterparty agreement with the owners of the vessel to carry the cargo from Tuticorin to Visakhapatnam. As the cargo was perishable, when the vessel became stranded, DCW Ltd arranged to have the cargo transferred to another vessel. DCW Ltd also made a plea for the arrest of the ship, claiming breach of contract and costs of USD 362,300.

The claim of Seatraffic Supplier for supply of necessaries

Following the arrest of the vessel, the crew sought and obtained a direction to maintain the vessel and the crew. The court directed the Advocate Commissioner to pay INR 3,607,925 to MS Seatraffic in terms of art 12.2 of the International Convention of Maritime Liens and Mortgages 1993 (MLM Convention 1993).

The claim of Sembmarine Kakinada Ltd Shiprepairer (Sembmarine)

Sembamarine successfully applied to intervene on 5 June 2013 and claimed USD 474,286.75 for services and provisions rendered by them to the vessel, including core repairs, berthing charges, electricity charges, bunkering and towing charges.

The claim of Deep Sea Shipping Logistics

Deep Sea Shipping Logistics made a maritime claim for the agency services they rendered to the vessel.

All parties, barring the crew, pled that they were entitled to a maritime claim. The crew asserted that their claim fell into the category of a maritime lien and they sought a direction to pay their wages on a priority basis. Sembmarine objected and sought a declaration that their dues should be first secured over the other debts and paid on the same priority as that of the crew.

The issue before the court was whether payment should be made after all the claims had been heard or whether priority should be given to the claim of the crew for the wages.

Held: The petition of the crew was allowed. The Advocate Commissioner was directed to disburse the wages of the crew and their repatriation expenses.

In reaching this conclusion the court considered both the MLM 1993 Convention and the International Convention on the Arrest of Ships 1999 (Arrest Convention 1999) in the absence of State laws on the priority of maritime claims and maritime liens. The court noted that all the claims made by the plaintiff and interveners are maritime claims in terms of art 1.1 of the Arrest Convention 1999. Article 4.1 of the MLM 1993 Convention defines maritime liens and art 5.2 provides that the priority of the liens are in the order given in art 4, with the exception of art 4.1.c which is a claim for salvage. Article 4.1.a provides that a claim for wages and other sums due to the master, officers and other members of the vessel in respect of their employment, including costs of repatriation, can be secured by a maritime lien. Therefore this claim will rank higher than other claims. Article 5.3 provides that the liens set out in art 4.1.a, b, d, e rank on equal footing between themselves.

Article 12.2 of the MLM Convention 1993 provides that the costs and expenses arising from the arrest or seizure and subsequent sale of the vessel shall be paid out of the proceeds of sale. These include the costs for the upkeep of the vessel and the crew as well as wages and other costs referred to in art 4.1.a. The maritime lien under art 4.1.a takes priority in terms of art 5, and the effect of the forced sale and disbursement set out in art 12.2 makes it clear that the crew is entitled to the payment of their claims at first instance.