The plaintiff, 3F Industries Ltd, imported crude palm oil from the shipper, M/s Golden Agri International Pte Ltd. The plaintiff entered into four sales contracts with the shipper for 8000 mt of crude palm oil. Negotiations took place through the corporate office of the plaintiff in Chennai and the contracts were signed in Chennai. The palm oil was carried on board the MT Titan Vision, a vessel owned and managed by the defendant, M/s Horizon Marine Pte Ltd, for discharge at Krishnapatnam in Andhra Pradesh. At discharge, the plaintiff discovered that there was short delivery due to the defendant’s failure to maintain the temperature of the cargo hold as prescribed in the sales contract. The plaintiff applied to arrest the MT Titan Vision in the High Court of Madras while the vessel was at the discharge port.

The defendant applied to release the vessel and vacate the order of arrest on the basis that:

1. The court had no jurisdiction since the vessel was berthed outside the court’s jurisdiction; and
2. No cause of action has arisen within the court’s admiralty jurisdiction, since the plaintiff had chosen to file the suit only on the basis of the sales contact, to which the vessel was not a party.

The plaintiff argued that, since its claim is a maritime claim as defined under art 1 of the Arrest Convention 1999 and arts 2.3 and 2.4 of the Convention provide for arrest of a vessel for obtaining security, the court has admiralty jurisdiction to entertain the suit and order the arrest. Further, the bill of lading had been issued by the plaintiff in Chennai.

Held: Defendant's application allowed. Interim order of arrest vacated.

Referring to s 3(15) of the Merchant Shipping Act 1958, the court held that the High Court has admiralty jurisdiction only where (a) the port of registry of the vessel is situated, or (b) the vessel is for the time being, or (c) the cause of action wholly or in part arises, within the limits of its territorial jurisdiction.

In this case, jurisdictional criteria (a) and (b) were not satisfied, and the court ruled that the Arrest Convention 1999 has nothing to do with the territorial jurisdiction of the High Courts in India.

As far as jurisdictional criterion (c) is concerned, the suit was filed based on the sales contract entered into between the plaintiff and the shipper. This provides no basis for making a claim against the vessel, since the defendant shipowner is not a party to the sales contract. The bill of lading does not prescribe the temperature at which the cargo hold should be maintained. Hence, the issuing of a bill of lading at Chennai does not give rise to any cause of action to make a claim against the vessel within the admiralty jurisdiction of the court. In addition, since the plaintiff was neither an endorsee nor a consignee under the bill of lading, no rights of suit under s 1 of the Bill of Lading Act 1956 vested in it.