Background

The Owners of the “EVERRICH 8” (the Vessel), through their subsidiary Yuanland Ltd, entered into a voyage charterparty  dated 13 August 2014 with Rakha Al Khaleej International LLC (Charterers) for the carriage of LPG on board the “EVERRICH 8”. The Charterers, in turn, sub chartered the Vessel to Indian Oil Corporation Limited (IOCL), a Government of India undertaking for the carriage of LPG from the Port of Ras-Laffan to the Ports   of Sikka, of Ennore and Haldia. The Owners discharged  part of the cargo at the Port of Ennore. The balance of the cargo of around 20,998 MT of LPG was due to be delivered to IOCL, Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) at the Port of Haldia.

The Mare Maritime Singapore Pte Ltd (Plaintiff) obtained an order for the arrest of the Vessel claiming payments due under a Ship Management Agreement dated 24 October 2014. The Vessel was subsequently arrested at the Port of Ennore, on 20 August 2015.

The Owners of the “EVERRICH 8” applied to the Court for the transfer of the Vessel under arrest, from the Port of Ennore to the Port of Haldia, to facilitate the discharge of Liquid Petroleum Gas (LPG).

The issue:

The primary issue was whether the Vessel could be allowed to sail under arrest from the Port of Ennore, to the Port of Haldia, to facilitate the discharge of the remaining cargo of LPG.

The Owners’ arguments:

The Owners submitted that the vessel should be allowed to sail for the following reasons:-

  1. The loss and prejudice caused by the delay to the Owners
  2. The Charterers and the receivers of the cargo were in urgent need of the balance of the cargo
  3. The Owners could face potential claims for late delivery and/ or short delivery of the cargo
  4. The Vessel was due to undergo repairs at the Port of Haldia

The Owners further offered to be subject to various other conditions such as allowing the Vessel to sail with a Bailiff and police personnel on-board and to bear the associated expenses.

The Respondent Plaintiff’s argument:

The Plaintiff submitted that:

  1. The proposed voyage would in all probabilities allow the Vessel to sail in international waters which would cause the Court to lose jurisdiction over the Vessel
  2. The Owners were a foreign company with the Vessel as sole asset
  3. The Owners made false representations regarding the geographic location of the Vessel so as to avoid the jurisdiction of the Court
  4. There was a risk of maritime liens being created en route (as a result of a breakdown or collision) and these would take precedence
  5. The cargo could be transshipped onto another vessel
  6. Alternatively, the receivers could take delivery of the cargo at the Port of Ennore or could purchase a similar cargo and then claim from the Owners
  7. Commercial considerations could not be grounds for allowing the application

Decision:

The Court held that the Application could not be decided on the prejudice created by the Plaintiff and had to be considered on the basis of its own merit. Further, the Court considered that the value of the Vessel far exceeded the Plaintiff’s claim, and held that the argument regarding the possible creation of maritime liens was without any foundation. As for the proposed cargo transhipment, this suggestion too seemed unrealistic.

In order to ascertain the factual position, the Court enquired from the receivers who confirmed that failure to deliver the cargo at the Port of Haldia could lead to the depletion of stock. Further, the Indian coastal guard confirmed that it was possible for the Vessel to sail from the Port of Ennore to the Port of Haldia under surveillance and if the Vessel violated any order of the Court, the Indian coast guard could pursue the Vessel and direct it back into Indian Territorial water.

The court relied on the judgement of the Bombay High Court Bombay in Lufeng Shipping Co.Ltd. Vs. M V Rainbow Ace in Appeal (L)No. 228 of 2013 in Notice of Motion No. 235 of 2013 in Admiralty Suit No.29 of 2013 wherein the court directed that the Vessel “RAINBOW ACE” under arrest be moved from the Port of Pipava to the Port of Mumbai.

The Court would allow the Vessel to sail from the Port of Ennore to the Port of Haldia, subject to the following conditions:

  • That an independent master mariner board the Vessel and supervise it at all times
  • That the armed guards be present on the Vessel
  • That at all times, the Vessel report her location/coordinates to the Indian Coast Guard
  • The Court accepted the Owners’ undertaking to bear the associated expenses
  • The Applicant would bear the costs and expenses of the armed guards and independent master mariner on board the Vessel