The defendant shipowner applied for an order to set aside the arrest of its vessel, for compensation for wrongful arrest, and to direct the plaintiff bank to provide counter-security of USD 99,000.

The plaintiff alleged that it had a charge receivable from OW Bunkers Malta Ltd (OW Bunkers). It said that it had stepped into the shoes of OW Bunkers and was authorised to take actions for recovery of any dues. It said that Tatsou Consulting Ltd, on behalf of the defendant vessel / master / owner / charterers / managers and / or operators, approached OW Bunkers for supply of 350 mt bunker fuel at Port Syros. The bunkers were accepted, but not paid for. According to the plaintiff, the bunkers were essential for the operation of the defendant vessel. They constituted necessaries and, therefore, a maritime claim. The plaintiff contended that OW Bunkers had a maritime lien over the vessel for the bunkers supplied, and therefore even a change in ownership of the vessel could not defeat OW Bunkers' claim. OW Bunkers supplied bunkers to the faith and credit of the vessel. It had a recognised maritime claim within the Admiralty Courts Act 1861 (Imp), and various maritime international Conventions. The Supreme Court and the Gujarat High Court also recognised such a claim, constituting a valid maritime claim. Thus, the plaintiff was entitled to proceed in rem and this Court had jurisdiction to hear this suit, filed under the Admiralty Courts Act 1861 (Imp) and the provisions and the principles of admiralty law applicable and having force in India.

The defendant argued that the plaintiff did not have any maritime lien against the defendant vessel. It contended that there was no privity of contract between the plaintiff and the owner of the defendant vessel. The master of the vessel, at the time of taking the bunkers onto the vessel, issued a notice of protest to explicitly clarify that there is no privity of contract between the owner of the defendant vessel and the bunker supplier. A license to burn bunkers was not a maritime claim, as recognised under the Arrest Conventions 1952 or 1999.

Held: Application partly allowed.

In Chrisomar Corporation v MJR Steels Pvt Ltd [2017] INSC 781 (CMI149), the Supreme Court clearly held that supply of necessaries to the vessel is not a maritime claim. In the absence of any contract of the plaintiff with the owner of the defendant vessel, the arrest of a vessel on the ground of a maritime claim is impermissible. All the cases of maritime liens as held by the Supreme Court are based on maritime claims, but all maritime claims do not give rise to maritime lien on the ship. A lien is a right over someone's property to retain the possession of the same for the purpose of receiving a claim. The maritime lien, however, is different than other liens where there is no requirement of prior possession on the strength of the maritime lien, securing the arrest of ship, which comes under the possession of the Court and the ship thereafter cannot be moved without the Court's order. Since both the maritime claim and maritime lien have been defined under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 (the Act) and in Chrisomar Corp, the Court has been categorical that a claim for necessaries supplied to vessel does not become a maritime lien and has further said that a claim for necessary raises a maritime lien only in the USA, which stands alone in considering the claims for necessaries would amount to a maritime lien enforceable against the vessel.

In India, the fact that claims for necessaries, though maritime claims, do not give rise to a maritime lien is made unequivocally clear. Therefore, as provided under s 4(l) of the Act, any goods, materials, perishable or non-perishable provisions, bunker vessels or equipment supplied or services rendered to the vessel for its operation, management, preservation or maintenance including any fees, payable or leviable constitute a maritime claim, but the same has to be claimed from a person with whom there is privity of contract.

Having said that, this Court cannot be oblivious of the fact that this suit was brought in 2016 and the ex parte order was also issued in 2016, before the Act and the decision in Chrisomar. Various decisions of this Court also favoured the plaintiff at the time. It would not be feasible for the Court to hold at this stage that to bring the suit was a misleading act on the part of the plaintiff, or that it was a brazen abuse of process of the Court.

Without making any change in the order passed by this Court on 16 February 2016, the plaintiff is directed to provide the sum of USD 99,000 as counter-security within eight weeks. On failure to comply, the interim order shall stand vacated.