Capeshore Maritime Partners FZC (the plaintiff), a UAE company engaged in the sale and purchase of vessels, instituted an admiralty suit against the Atlantis, owned by Hermes Marines Ltd (the applicant), a Marshall Islands company. The plaintiff sought a decree for possession of the vessel and transfer of ownership arising from an alleged breach of a memorandum of agreement (MoA) dated 13 December 2015 for the purchase of the vessel for demolition. The total claim was USD 866,196. The Court had granted an ex parte arrest of the vessel on 24 February 2016. The applicant filed the present application for rejection of the plaint under O 7 rr 11(a) and (d) of the Code of Civil Procedure 1908 (the Code).

The applicant argued that the plaintiff's claim arose from a purely private contract and therefore did not involve public law character, which, per the Supreme Court's decision in Liverpool & London SP&I Association Ltd v MV Sea Success I (Liverpool) (CMI884), and the decision of the Division Bench of the Gujarat High Court in Croft Sales & Distribution Ltd v MV Basil (Croft Sales) (CMI2790), is a condition precedent for the Arrest Convention 1999 to apply in India. The applicant further contended that 'law' in O 7 r 11(d) includes judicial precedent, not merely statute law, and that both the Supreme Court and Division Bench decisions were binding on the Court.

The plaintiff opposed the application, arguing that paras 59 and 60 of Liverpool constituted obiter dicta rather than ratio decidendi and were therefore not binding, and that 'law' in O 7 r 11(d) referred only to enacted statute law.

Held: Application allowed; plaint rejected.

The Court held that the pronouncement in paras 59 and 60 of Liverpool formed part of the ratio decidendi, as the applicability of the Arrest Convention 1999 was directly in issue in that case. Even if characterised as obiter dicta, such pronouncements of the Supreme Court are binding on High Courts, in the interests of judicial uniformity and discipline. The Division Bench judgment in Croft Sales, which followed Liverpool, was also binding on the Court as a Single Judge. The Court further held that 'law' in O 7 r 11(d) encompasses judicial precedent in addition to statute law, citing Black's Law Dictionary and art 141 of the Constitution of India.

The MoA between the parties was a purely private commercial contract with no public law character. The Arrest Convention 1999 was therefore inapplicable, the plaintiff had no maritime claim, and the admiralty jurisdiction of the Court could not be invoked. The plaint was rejected under both O 7 r 11(a) for disclosing no cause of action, and O 7 r 11(d) as being barred by law. The request for a stay of the judgment was declined.