M V SEA RENOWN Vs. ENERGY NET LIMITED

JUDGEMENT

(1.) . Instant appeal is directed against judgment dated January 15, 2003 rendered by the learned Single Judge in O.J.Civil Application No.257 of 2001 filed in Admiralty Suit No.19 of 2001 by which two prayers made by the appellants, namely; (i) that the bank guarantee dated August 16, 2001 furnished by the appellants in favour of Registrar of the High Court in order to obtain release of the vessel of the appellants be returned duly discharged; and (ii) that the respondent be directed to pay to the appellants a sum of US$ 1,43,230.28 as damages, are refused.

(2.) The respondent is a company organized under the laws of Liberia, and carries on business, inter alia, as supplier of bunkers to various vessels worldwide. The appellant No.1 is a foreign-flag vessel. According to the respondent, it was contacted on or about July 24, 2000 by brokers acting on behalf of the owner of the appellant No.1-vessel for supply of bunkers at Port Said Suez and, therefore, an order confirmation dated July 24, 2000 was issued by the respondent to the owners of the said vessel confirming the order for supply of 530 MT IFO 180 CST and 80MT MGO at a price of US$148.50 per MT for IFO and US$325.00 per MT for MGO. The case of the respondent is that in the order confirmation, the buyers were mentioned to be the vessel `SEA RENOWN' and jointly and severally the Owners/Managing Owners/ Operators/Managers/Disponant Owners/Charterers, vessel in rem and Geepee Shipping & Trading Inc. What is asserted by the respondent is that the order confirmation stated that the receipt of the confirmation signified acceptance of responsibility for payment of bunker invoice by each and all of the buyers listed in the order confirmation and that the terms of the supply of bunkers required, inter alia, that payment should be made within thirty days from the date of delivery and interest on late payment would be charged at 2% per month. It is the case of respondent that in accordance with the order confirmation, bunkers were supplied to the said vessel at Port Said through local physical supplier MISR Petroleum Company on July 30, 2000, and the supplies were duly acknowledged by the Master and the Chief Engineer of the said vessel, who endorsed the bunker delivery receipts with their seal and signatures. It is also the case of the respondent that the receipts for bunkers duly acknowledged and endorsed by the Master and the Chief Engineer of the vessel stated that the bunkers delivered/received on board were for account of the Owners and/or Managing Owners and/or Managers of the vessel as well as any other vessel managed by the same Managers as appearing in Lloyd's Register of Shipping or Greek Shipping Directory. It is maintained by the respondent that upon delivery of bunkers being made, the local physical supplier, MISR Petroleum Company, was duly paid by it and the respondent-plaintiff, in terms, had raised invoice dated August 9, 2000 in respect of the said supplies on the Master and/or owners of the vessel requiring payment of the total amount of bunkers supplied aggregating to US$104864.52 to be made within thirty days after delivery date. The grievance of the respondent is that the owners of the vessel did not make payment of the said amount despite telephonic requests and reminders from time to time although repeated promises of payment were made. The respondent has emphasised that bunkers are essential for the operation of the vessel and supply of bunkers to vessel constitutes necessaries within the meaning of Section V of the Admiralty Courts Act, 1861 ("the Act" for short), as a result of which, the respondent has a maritime claim against the appellant No.1-vessel for bunkers supplied. It is further claimed by the respondent that the bunkers were supplied on the faith and credit of the said vessel and the respondent is entitled to look to the said vessel and its owners for recovery of its dues. After asserting that a maritime lien attaches to the vessel as on the date of supply and is not defeated by any subsequent change in ownership of the vessel, the respondent has maintained that it is entitled to pursue its claim against the appellant No.1-vessel in rem, under the provisions of the Act. The respondent-plaintiff has, therefore, instituted Admiralty Suit No.19 of 2001 in the High Court and claimed following reliefs in paragraph 17 of the plaint.

(3.) The suit was listed for hearing before the learned Single Judge of this Court on August 3, 2001, and ad interim relief of warrant of arrest of the vessel in terms of paragraph 17(B) of the plaint, was granted on that day upon the respondent giving an undertaking in writing to the Registrar to pay such sums by way of damages as the Court may award as compensation in the event of the appellant No.1 and/or any other affected party sustaining prejudice by the order. It was further stipulated in the said order that in the event of the defendant (Appellant No.1) depositing in the Court a sum of US$ 1,28,032.40 towards the satisfaction of the respondent's claim in the suit and costs of the suit and on payment of the poundage, if any, or furnishing security in the said sum of US$ 1,28,032.40 towards the satisfaction of the respondent's claim in the suit together with interest at the rate of 24% per annum from the date of filing of the suit till payment and/or realisation to the satisfaction of the Registrar of the Court as security towards the satisfaction of the respondent's claim in the suit and for costs of the suit and for poundage, if any, the Warrant of Arrest shall not be executed against the vessel SEA RENOWN.