The plaintiff seller and second defendant buyer entered into an agreement (the MOA) for the sale of the first defendant MV Star 7. The plaintiff did not receive the full sale price and served notice to cancel the MOA and the bill of sale. Meanwhile, the second defendant onsold the vessel to the third defendant. The plaintiff commenced UK arbitration proceedings, seeking repossession of the vessel and/or its market value. The plaintiff also filed an admiralty suit in India seeking arrest and possession of the vessel, a declaration of its ownership of the vessel, and a decree that the second and third defendants are liable to the plaintiff for the market value of the vessel as claimed in the arbitration proceedings. The plaintiff claimed that the vessel was lying at the port of Alang, India, and that the Court had admiralty jurisdiction over it.

The third defendant argued that the suit was not maintainable: Croft Sales & Distribution Ltd v MV Basil (OJ Appeal No 6 of 2001 in Admiralty Suit No 10 of 2010) (The Basil) (CMI2790); Unique Trading Co v MT Johar (Admiralty Suit No 2 of 2011) (CMI2850). First, the MOA was a contract between two private parties. It did not have any public law elements as required by Liverpool & London S P&I Association Ltd v MV Sea Success I (2004) 9 SCC 512 (The Sea Success I) (CMI884). Whatever was held in The Sea Success I about applicability of the Arrest Convention 1999 will apply with equal force to the Arrest Convention 1952 as held in MV Elisabeth v Harwan Investment and Trading Pvt Ltd MANU/SC/0685/1993; (1993) Supp 2 SCC 433 (The Elisabeth) (CMI883). The Convention is to be applied subject to domestic law: The Elisabeth [74]. Meanwhile, no money decree was claimed and so no arrest can be ordered: The Basil.

Second, the vessel was beached just before the arrest order was passed, which meant that admiralty jurisdiction could not be invoked because the vessel was no longer in territorial waters but in the jurisdiction of the Civil Court as per domestic law. Accordingly, the suit should be dismissed: Western Ship Breaking Industry v Laiki Bank (Helias) SA MANU/GJ/8251; New Era Shipping Ltd v MV P Express MANU/MH/0613/2007; 2007 (6) Bom CR 138 (The P Express); Communications & Commerce International Pvt Ltd v MV Saba (Appeal No 635 of 2001).

Third, in so far as the substantive merits is concerned, the plaintiff had no case based on title, ownership, and possession of the vessel.

In response, the plaintiff argued that its claim was based on art 1.1.o of the Arrest Convention 1952, which was wide enough to cover disputes regarding title or ownership of a ship. Even if the Arrest Convention 1952 was interpreted on a stand-alone basis, expansion of admiralty jurisdiction and not curtailment was emphasised in The Elisabeth. There was sufficient public law element in the contract between the plaintiff and the second defendant: vessel registration was to be carried out with various authorities. Besides, the 'public law element' requirement was obiter dicta. Next, the judicial pronouncements on the issues of 'whether the beaching of a vessel extinguishes admiralty jurisdiction' are under appeal and therefore not binding upon this Court. Furthermore, beaching of the vessel was inconsequential due to the order for the arrest of the vessel clearly stating that 'beaching shall be subject to further order that may be passed in the proceedings'. The plaintiff also cited arts 7, 7.2, 7.3, and 7.4 of the Arrest Convention 1952.

The Court had to decide the following issues. First, whether the suit was maintainable. Second, whether the plaintiff had a maritime claim so as to invoke admiralty jurisdiction.

Held: Action dismissed.

The issues should be answered in the negative. To decide the issues, it is necessary to refer to art 1.1.o of the Arrest Convention 1952 and art 1.1.v of the Arrest Convention 1999. Article 1 of the Arrest Convention 1999 contains definitions and art 1.1 defines 'maritime claim'.

As to whether the suit was maintainable, the Court referred to The Basil where a similar issue arose from a maritime claim arising out of a ship sale contract dispute and the applicability of the Arrest Convention 1999. After examining The Sea Success I regarding arts 1.1.v, 2.3, and 3.2 of the Arrest Convention 1999, the Court in The Basil [10]-[15] held:

[I]n [The Sea Success I], the Apex Court on the aspects of Convention has recorded at para 43 about the ratification of the Convention of 1999 by various countries and, therefore, it is not possible for us to entertain the contention that the Convention of 1999 is not in force or not ratified by the requisite number of countries as per Article 14 of the Convention of 1999. However, [The Sea Success I [59]-[60] stated] thus:

[The Elisabeth] is an authority for the proposition that the changing global scenario should be kept in mind having regard to the fact that there does not exist any primary act touching the subject and in absence of any domestic legislation to the contrary; if the 1952 Arrest Convention had been applied, although India was not a signatory thereto, there is obviously no reason as to why the 1999 Arrest Convention should not be applied.

Application of the 1999 Convention in the process of interpretive changes, however, would be subject to; (1) domestic law which may be enacted by Parliament; and (2) it should be applied only for enforcement of a contract involving public law character. ...

[When The Elisabeth observed] that 1999 Convention may be applied, it is specifically also observed that the application of such Convention shall be subject to Domestic Law enacted by the Parliament and it should be applied only for the enforcement of contract involving public law character. This means that both the conditions are to be observed while applying the Convention of 1999. ...

In view of the aforesaid, even if the Convention of 1999 is to apply, but for the fact that the contract is not involving any public law character, the said condition [stated in The Sea Success I] is not satisfied. […]. As per The Sea Success I, if both the conditions are not satisfied 1999 Convention cannot be applied, nor the admiralty jurisdiction can be invoked based on the Convention of 1999.

The plaintiff had no prima facie maritime claim to invoke admiralty jurisdiction for arresting the vessel.

As for the applicability of art 1.1.o of the Arrest Convention 1952 in the context of the 'public law character' requirement, the MOA is purely a private contract. A ship sale contract unconnected with the State or the public interest has no public law character: The Basil [12]. The dispute in question is not covered either by the Arrest Conventions 1952 or 1999, so it is unnecessary to consider the plaintiff's contention as to ship registration. Besides, vessel registration does not involve a 'public law character' regarding the MOA. Because the MOA had no public law character, the suit is not maintainable: The Sea Success I; The Basil. Invocation of admiralty jurisdiction branding this private contract as a 'maritime claim' under art 1.1.o of the Arrest Convention 1952, which refers to disputes about 'title and ownership', cannot be accepted. The plaintiff's contentions about the title and ownership of the ship are misconceived. There was no need to delve deep into the plaintiff's contention about a 'maritime claim' being governed by the Arrest Convention 1952 and, alternatively, that the contract has a 'public law element' and, therefore, falls within the parameters of The Sea Success I and also under the Arrest Convention 1999.

Once the vessel is beached, no maritime claim can be entertained while exercising admiralty jurisdiction. In this case, the vessel was already beached before the Court granted the arrest warrant. No maritime claim can therefore be entertained in the admiralty jurisdiction.

The Court rejected the plaintiff's argument on arts 7.2, 7.3, and 7.4 of the Arrest Convention 1952 for lack of merit. The Court stated that it would prefer not to go into that contention, which primarily deals with the jurisdiction of the Court of the country in which the arrest is made to determine the case upon its merits if the domestic law of the country in which the arrest is made gives jurisdiction to such Courts or in any of the cases enumerated in art 7.1.

Separately, a pending appeal against a court judgment does not affect the law laid down in that judgment. The plaintiff's contention that the authorities have colluded with the defendants in acting swiftly in granting beaching permission cannot be gone into by this Court in exercise of admiralty jurisdiction.