Rushab Ship International LLC (the plaintiff) instituted an admiralty suit in the Bombay High Court seeking, among other things, arrest of bunkers on board the MV African Eagle (the second defendant) and arrest of freight due for transportation of cargo on that vessel, as security for claims arising under a charterparty dated 16 March 2012 between the plaintiff and Bulk Ship Management SEA (Bulk Ship/the third defendant), a Malaysian company. Under this charterparty, the plaintiff chartered the MV Don Raul to the third defendant, which only paid the first two hire instalments and thereafter failed to pay hire charges, ultimately purporting to terminate the charterparty. The plaintiff's total claim, to be pursued in arbitration, was approximately USD 816,531. On 7 January 2013, the Court arrested the bunkers on the MV African Eagle and the freight due for cargo laden at Mumbai, on the basis that the vessel was operated by the third defendant under a time charter and that the bunkers on board were believed to belong to the third defendant. The third defendant applied to vacate the arrest order, contending that the bunkers were largely owned by MUR Shipping BV (an affiliate of the fifth defendant) pursuant to a fixture note dated 29 December 2012, and that independent arrest of freight without privity against the vessel was impermissible in admiralty law. The first, second, fourth and fifth defendants also opposed the arrest, asserting that the majority of the bunkers belonged to MUR Shipping BV, and that the continued arrest was causing undue hardship to innocent third parties.

Held: Motion partly allowed. The third defendant is directed to furnish security of USD 34,692.80, being the value of bunkers owned by it at date of arrest; order of arrest of freight vacated; vessel released upon furnishing of security.

The plaintiff established a prima facie case in respect of unpaid hire under the charterparty for the MV Don Raul. On bunker ownership, the Court accepted the arguments of Bulk Ship and the fifth defendant, finding that pursuant to the fixture note dated 29 December 2012 and supporting documents, including bank wire transfer records, only the bunkers required to take the vessel from the delivery port Kandla to the bunkering port Fujairah belonged to Bulk Ship, valued at USD 34,692.80 at the date of arrest; the balance belonged to MUR Shipping BV and were not liable to arrest. On freight, the Court held that freight cannot be independently arrested in admiralty without privity against, or an entitlement to proceed against, the vessel or its cargo. Applying established English authorities, the Court confirmed that no process can issue against freight simpliciter save as consequential upon process against the ship, and that none of the applicable statutes or Conventions, including the Admiralty Courts Act 1861 (UK), the Colonial Courts of Admiralty Act 1891 (UK), the Arrest Convention 1952, or the Arrest Convention 1999, conferred any entitlement to arrest freight independently.