The plaintiff, a Singapore-based chartering company, entered into a voyage charterparty with the first defendant, a salt trader and exporter, for the carriage of salt by the MV Pacific Pioneer from Kandla to Chittagong. Claiming USD 221,656.29 in outstanding demurrage, interest, and costs, and having invoked the arbitration agreement for arbitration in London, the plaintiff brought an action in rem against the second defendant: a cargo of 20,000 mt of industrial salt owned by the first defendant and laden, or to be laden, aboard a different vessel, the MV Sheng Cheng Hai, at Kandla Port.

The cargo was arrested by an ex parte order dated 10 February 2017. On 13 February 2017, at the first defendant's request, the arrest was vacated against security of 20,000 MT of industrial salt lying in an open yard at Kutch, Gujarat, and the Sheng Cheng Hai was allowed to sail. The first defendant applied for the release of the security and for damages towards storage expenses, challenging the arrest as impermissible and wrongful. The central question was whether, or in what circumstances, arrest of cargo is permissible under the admiralty jurisdiction of the Court, particularly where the arrest is sought de hors the ship.

Held: Notice of motion made absolute. The arrest of the cargo cannot be sustained, and the security must be released. A preliminary issue is framed as to whether the suit ought to be dismissed, the assumption of admiralty jurisdiction itself having been held impermissible.

Indian Courts are free to apply the principles of the Arrest Conventions of 1952 and 1999 in their admiralty jurisdiction. In MV Elisabeth v Harwan Investment & Trading Co 1993 Supp (2) SCC 433 (CMI883), the Supreme Court held that such conventions 'embody principles of law recognised by the generality of maritime States, and can therefore be regarded as part of our common law', and Liverpool & London SP & I Association Ltd v MV Sea Success I (2004) 9 SCC 512 (CMI884) extended this to the Arrest Convention 1999.

The foundation of an action in rem is the maritime lien, and the res to which the lien attached was always directly connected with the cause of action. Article 1 of the Arrest Convention 1952 substituted the original subjects of maritime lien with a list of 17 maritime claims for which arrest was permissible, and art 3 required the ship arrested to be either the offending ship or a sister ship beneficially owned by the person personally liable on the claim. The Arrest Convention 1999 increased the list to 22 categories of claims and widened the scope of the jurisdiction, but 'it nevertheless does not detract from the original requirement of the ship being either the offending ship or its sister ship, as defined above, for effecting the arrest'.

In so far as cargo is concerned, arrests have been permitted only in the case of salvage or unpaid freight, the latter being intimately connected with the arrest of the offending ship: any claim in respect of freight is 'parasitic in character' and depends upon the entitlement to proceed against the vessel. As held in The Flora (1866) LR 1 A & E 45, 'the cargo is liable to arrest for no other purpose whatever'. None of the Indian cases on arrest of cargo supports the plaintiff's application: Best Food International Pvt Ltd v Navbharat International Ltd 2011 Supp Bom CR 283; MV Geowave Commander 2014 SCC OnLine Bom 1895 (CMI183); Bulk Ship Management SEA 2013 (3) Bom CR 380.

The plaintiff's reliance on US, Australian, and Canadian statutes permitting arrest of cargo without reference to the arrest of the ship does not merit countenance: 'It is one thing to adopt these principles recognised by the generality of maritime states as part of our common law, but quite another to actually incorporate statutory provisions of particular maritime nations as part of our law.' Arrest of cargo in connection with a claim unconnected with it is a matter of substantive law pertaining to jurisdiction, and neither law nor authority supports such a proposition. The claim here arose under a charterparty for the Pacific Pioneer, and there was no claim against the Sheng Cheng Hai or its owner; the arrest of the cargo onboard accordingly cannot be sustained. The order was stayed for three weeks, subject to the plaintiff depositing INR 200,000 towards the defendants' storage and related costs.