The plaintiff chartered the vessel Mineral Capeasis to Industrial Carriers Inc (ICI) for a period of 12 to 13 months. ICI failed to pay hire. The plaintiff therefore invoked the London arbitration clause in the charterparty and referred the dispute to arbitration in London. The arbitrator made an award in the plaintiff's favour. The plaintiff also obtained a default judgment against ICI in the Southern District of New York.

The plaintiff argued that Viktor Baranskyi was the beneficial owner of the defendant vessel and also the owner of ICI and that he incorporated Freight Bulk Pvt Ltd, Singapore (Freight Bulk) as a sham company with the sole intent to defeat the claims of bona fide creditors. The plaintiff therefore had the MV Cape Climber arrested in India, on the basis that it was owned by Freight Bulk at the time of arrest.

Freight Bulk applied for the arrest to be set aside, as art 1.2 of the Arrest Conventions 1952 and 1999 provide that arrest does not include the seizure of a ship in execution or satisfaction of a judgment or other enforceable instrument.

Held: Application denied.

Freight Bulk is an alter ego of ICI. Admiralty jurisdiction can be invoked by the court for the execution of a foreign decree in India irrespective of the definition of 'arrest' given under art 1.2 of the Arrest Conventions 1952 or 1999 in view of the law laid down by the Supreme Court in the cases of MV Elisabeth (CMI883) and MV Al Quamar to the effect that 'Admiralty Law 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 regarded as a mere procedure to obtain security to satisfy judgment.'