Siem Offshore Redri AS (the plaintiff) obtained an order of arrest on 1 June 2018 against Altus Uber, an offshore supply vessel registered in Liberia. At the time of the arrest, Altus Uber was at the port of Mumbai.

The plaintiff was the owner of the motor vessel Siem Marlin and had bareboat chartered Siem Marlin to Marine Engineering Diving Services (MEDS) for a period of five years with an option to purchase at the end of the five year period. Subsequently, MEDS repudiated the charterparty. The plaintiff accepted its repudiation and commenced arbitration proceedings in London on 26 April 2016.

In November 2017, the plaintiff learned that MEDS had purchased Altus Uber and filed an admiralty suit in the High Court of Bombay for the same claim made in the arbitration proceedings in London. The plaintiff claimed that, notwithstanding the arbitration proceedings in London, it was entitled to arrest Altus Uber as security for its claim in the High Court or alternatively as security for the arbitration proceedings in London.

MEDS took out a notice of motion to vacate the order of arrest. MEDS claimed that the plaintiff, having commenced arbitration, could not file a suit for the same relief. If the plaintiff wanted security for its claim, it should rather take steps under the English Arbitration Act.

MEDS claimed that it was the bareboat charterer and not the owner of the Altus Uber. The owner was Swordfish Shipco Ltd. MEDS also argued that the suit was filed only for security until the enforcement of the arbitral award. In light of the judgments in Bharat Aluminium Co v Kaiser Technical Services Inc MANU/SC/0722/2012 and Rushab Ship International LLC v Bunkers on board Ship MV Eagle and Freight MANU/MH/0651/2014, MEDS submitted the suit was not maintainable. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 (the Admiralty Act) does not provide for security in foreign arbitrations. Although art 7 of the Arrest Convention 1999 permits such a claim, the Admiralty Act does not include a provision similar to art 7.

The plaintiff argued that, as the arbitration was an action in personam against MEDS and the admiralty suit was an action in rem, both actions were maintainable. It submitted that art 7 of the Arrest Convention 1999 provides for a situation where arbitration proceedings have commenced and an action in rem is permitted to obtain security pending arbitration. Although the Admiralty Act does not have a similar provision, it nevertheless does not bar the provisions of the Arrest Convention 1999 being applied. In JS Ocean Liner LLC v MV Golden Progress MANU/MH/0026/2007 (Golden Progress) the full bench of the High Court held that, where there is no explicit legislation providing that an action in rem may be used to obtain and retain security, even though the merits of the dispute are to be determined in arbitration proceedings, art 7 of the Arrest Convention 1999 may be applied to advance the cause of justice.

Held: Notice of motion is dismissed.

The Full Court in the Golden Progress said that an action in rem where the parties have agreed to submit the dispute to arbitration is permitted in accordance with art 7 of the Arrest Convention 1999. In the absence of any domestic law, and provided there is no inconsistency with domestic law, art 7 of the Arrest Convention 1999 should be applied so as to be consistent with international procedure and to advance the cause of justice. The Full Court therefore evolved a procedure which is neither prohibited nor inconsistent with domestic law. The Admiralty Act does not affect the view taken by the Full Court in the Golden Progress as the Act is silent on the procedure following the arrest of a ship.

Commencement of in personam proceedings is no bar to an action in rem. The two sets of proceedings are cumulative and not in the alternative. Arbitration is in personam and not a bar to the commencement of an action in rem even though both actions may arise from the same facts. Thus, even though the plaintiff has commenced in personam proceedings by way of arbitration against MEDS, it can nonetheless commence in rem proceedings against MEDS’ vessel Altus Uber to obtain security for its maritime claim. Such an in rem action is permissible in law and is not an abuse of process.

Whether MEDS is the owner or the demise charterer of Altus Uber is irrelevant. On a plain reading of s 5(2) of the Admiralty Act, the plaintiff is entitled to arrest Altus Uber. Section 5(2) permits the arrest of any other vessel in lieu of the vessel against which the maritime claim has been made. Section 5(2) is subject to s 5(1) which permits the arrest of a ship for a claim against the owner or demise charterer.