The plaintiff, Alphard Maritime Ltd (Alphard), Samson Maritime Ltd (SML), and Underwater Services Company Ltd (USCL), entered into a settlement agreement (the agreement). SML was the registered owner of the two defendant vessels, the Ocean Jade, and the Ocean Morganite. USCL was a wholly-owned subsidiary of SML.

Alphard invoked arbitration under cl 10 of the agreement against SML and USCL under the rules of the Singapore Chamber of Maritime Arbitration (SCMA) seeking, among other things, indemnity under cl 3.3 of the agreement for its purported 'losses, including loss of revenue and profit' due to SML's and USCL's purported failure to execute the MOA under cl 3.1.

Alphard then filed an admiralty suit in the Gujarat High Court against four of SML's vessels, and one vessel chartered by USCL, jointly and/or severally to pay the same claim amount as indemnity for the alleged breach of the agreement. The Gujarat High Court ordered the arrest of only the last vessel chartered by USCL.

Alphard thereafter filed the current admiralty suit in this Court against the two defendant vessels owned by SML. Alphard filed an interlocutory application for extension of time to pay the deficit in court fees, and was granted an extension, while the defendant vessels were kept under arrest. The defendants filed for relief under O 7 r 11(c) of the Code of Civil Procedure (the CCP) for rejection of the plaint in the suit. Alphard thereafter sought to amend its pleadings, invoking O 6 r 17 of the CCP.

Alphard alleged that it had a maritime claim falling under s 4(1)(r) of the AA (a 'dispute arising out of a contract for the sale of the vessel') under the agreement.

The issue was whether amendment of Alphard's pleadings should be allowed, given the defendant's petition for rejection of the suit for non-payment of court fees.

Alphard argued that s 5 of the AA referred to arrest of vessels in rem. The amendment of pleadings was for indemnification and for securing its maritime claim. This was a suit in rem as defined under the statute. The amendment was necessitated by the pending admiralty suit at Gujarat and Singapore arbitration proceedings. In view of s 5 of the AA, for the purpose of providing security against these pending maritime claims, the amendment needed to be allowed. The proposed amendment did not change the nature and character of the suit.

Alphard relied on the decision rendered by the Bombay High Court (Full Bench) in JS Ocean Liner LLC v MV Golden Progress 2007 SCC OnLine Bom 69, 2007 AIHC 1933 (CMI2803):

78. We shall, accordingly, articulate our conclusions thus:

(i) An application under Section 9 of the Arbitration and Conciliation Act, 1996 is not maintainable for the arrest of the vessel for obtaining security of an Award that may be made in arbitration proceedings. The view to the contrary in m.v. Indurva Valley, to that extent is overruled.

(ii) An action in rem (in admiralty jurisdiction) for recovery of the claim and arrest of the vessel where the parties have agreed to submit the dispute to arbitration can be maintained and in such case if by way of an interim measure, the vessel is arrested or the security provided to obtain the release of the vessel, matter shall proceed in accord with Article 7 of the International Convention on Arrest of Ships, 1999.

(iii) If the proceedings are brought within the time so ordered by the Court before the arbitral tribunal, any final decision resulting therefrom shall be recognised and given effect with respect to the arrested ship or to the security provided in order to obtain its release provided that the defendant has been given reasonable notice of such proceedings and a reasonable opportunity to present the case for defence and in accord with the provisions contained in Arbitration and Conciliation Act, 1996.

Alphard also relied on Siem Offshore Redri AS v Altus Uber 2018 SCC OnLine Bom 2730 (CMI377):

66. The above reasoning equally applies when considering in rem arrest for the purpose of obtaining security in a case where arbitration proceedings had already been commenced, applying the procedure devised by the Full Bench in Golden Progress. It matters not whether arbitration has been invoked or is yet to be invoked.

67. Any other interpretation would not only defeat the interest of justice but would be contrary to the avowed objective of Courts and Parliament to promote alternative dispute resolution by way of arbitration or mediation. If a party agrees to arbitration it cannot be that he is to be deprived of his right in rem to obtain security in respect of his maritime claim. Just as a party who agrees to arbitration with the seat of arbitration outside India (after 2015 amendment) can apply for interim measures to a Court in India under Section 9 of the Arbitration Act, 1996, irrespective of the fact that arbitration may have already been invoked before any such application is made, so also a party should not be deprived of his right in rem to invoke admiralty jurisdiction and obtain arrest of a ship to secure his maritime claim even if arbitration may have already been invoked. ... Just because the party cannot maintain an admiralty action in rem under Section 9, can such a party be deprived of a chance to secure its claim in arbitration? In Golden Progress (Supra) the Full Bench has in paragraph 78 held that the Court has to devise a procedure to permit a party who has agreed to submit disputes to arbitration and as noted earlier, there is no explicit legislation barring such security.

The defendants also referred to Siem Offshore Redri AS v Altus Uber:

36. An action in rem is filed by way of a suit and governed by the provisions of the [CCP]. The Full Bench in Golden Progress (Supra) was conscious of the fact that a suit cannot be filed simplicitor for interim relief as they have expressed their conclusion in paragraph 78(ii) by saying that the action in rem must be for recovery of the claim. This can only mean that a decree must be sought as a decree is the only manner in which a claim can be recovered in a suit.

37. This Court in African Eagle (Supra) [Rushab Ship International LLC v Bunkers Onboard Ship MV African Eagle (CMI2812)] was considering an action in rem where the prayer in the suit was confined to seeking security pending arbitration, i.e., for interim reliefs only. The suit was not for recovery of the claim at all and no final relief of decree was sought. It is in this context, this Court, ... held that such a suit only for interim relief is not maintainable. The present suit of plaintiff is not such a suit. ...

Held: Judgment against Alphard.

The following issues fall for adjudication:

(i) whether the plaint is allowed to be amended;

(ii) whether the amendment, if allowed, would cause a change to the nature and character of the suit or result in a change of the cause of action;

(iii) whether the case set up in the proposed amendment is foreign to the case already set up in the plaint;

(iv) whether the proposed amendment is afflicted by mala fides;

(v) whether, if the amendment is allowed, it would affect the valuation of the suit, ie would it result in reduction of the value and the court fee payable;

(vi) whether, if the amendment is allowed, the court fees suggested by Alphard would be accepted as the correct valuation;

(vii) whether, given that the court fee has not been paid, the plaint is to be rejected altogether.

Perusal of the amendments sought demonstrates that the nature and character of the suit changes from that of a 'money claim arising out of an alleged settlement agreement' to a 'suit to secure the plaintiff's claims' in an admiralty suit filed before the Gujarat High Court.

The judicial pronouncements relied upon on behalf of Alphard are of no avail, as the factual matrix of those cases are poles apart from the facts of the present suit.

There was a lack of bona fides in Alphard's amendment application. The proposed amendment means that the cause of action sought to be raised would become foreign to the case that was set up in the earlier plaint as the 'Gujarat Suit' is introduced in the amendment for the first time without there being any reference in the original plaints, and the defendants are not party to the 'Gujarat Suit'. As a result, issues (ii), (iii), and (iv) are answered against Alphard.

Accordingly, Alphard's application seeking amendment of plaint is dismissed. Issue (i) is answered against Alphard.

This leads to the issue whether Alphard's plaint can be sustained after its non-payment of the court fee. Issues (v) and (vi) are answered against Alphard.

As a result, the suit is dismissed. Issue (vii) is answered against Alphard. All interim orders passed earlier stand vacated.