The appellants, Naftosol Ltd and CMI Trading Services Ltd, brought claims against a ship for repairs and supplies respectively. In order to secure these claims, the appellants had the ship arrested at the port of Hajira in India. Despite having obtained an arrest, allegedly due to the efforts of the respondents (including the first respondent which had a ship mortgage over the vessel for USD 23,000,000), the ship sailed and ended up in Singapore, where it was auctioned in judicial sale. The first respondent received all the proceeds because under Singapore law its claim was ranked ahead of repairs and supplies to the ship; under Indian law, the reverse was alleged to be true. The appellants therefore sought compensation from the respondents. The Multimember Court of First Instance of Piraeus dismissed the action as being legally unfounded under the substantive law of India, which it considered applicable. The Court of Appeal also rejected the appeal of the unsuccessful parties, accepting that: (a) that the breach of the precautionary seizure and the detention of the ship establishes a direct claim for damages on the basis of tort; and (b) the legal claims of the appellants did not rank ahead of the first respondent's ship mortgage under Indian law. The appellants appealed to the Supreme Court.

Held: Application for the annulment of the decision of the Piraeus Court of Appeal dismissed.

India applies English law to maritime matters, as is also confirmed by the contents of the Merchant Shipping Act 1958 and the Maritime Insurance Act 1963. The first of these laws regulates issues of mortgages, but not of maritime liens. India has signed the MLM Convention 1973 [sic - 1993], but has not yet ratified it, and therefore maritime liens are not governed by specific provisions but by the common law, even though the provisions of the Indian law are derived and inspired by English law, which is also enforced by Indian courts. There are five main categories of claims for the classification of creditors on a vessel auction: firstly, special legislative rights; secondly, legal costs, auction costs and custody costs; third, maritime liens; fourth; registered ship mortgages; and fifth, general maritime claims such as ship repairs, supplies, bunkers, etc, which are known under the general term 'necessaries'. The latter are called 'statutory rights in rem' and do not have the status of maritime liens. Consequently, the majority hold that the present appeal must be dismissed and it is unnecessary to examine the argument that, on an application of Indian private international law, Malta's substantive law, as the law of the ship's flag, should be regarded as applicable in this respect, according to which the appellants' claims would be privileged and rank ahead of those of the mortgagee. 

Euphemia Lambropoulou dissenting: under Indian law, the person supplying supplies and spare parts to a ship and the person who carries out repairs to it is considered to be a supplier of necessaries under Indian law, and the supply of goods is a claim with a maritime lien that precedes that of the mortgagee. The Court of Appeal's decision should therefore be set aside.