LIVERPOOL AND LONDON STEAMSHIP PROTECTION AND INDEMNITY ASSOCIATION LIMITED Vs. M T SYMPHONY EX ARABIAN LADY

JUDGEMENT

(1.) THE 4th defendant has taken out this motion for the following reliefs:

(2.) THE plaintiffs have described themselves as a foreign organization incorporated under foreign laws and having their registered office as shown in the cause title, sought arrest of vessel m. t. symphony for insurance premia dues. The case of the plaintiff was that second defendant a foreign company are owners of the first defendant vessel. The third defendants are also a foreign company and/or owners/managers of the first defendant vessel. Various vessels are being operated by the third defendant including defendant No. 1 earlier known as Arabian Lady as set out in paragraph 4 of the plaint. It is the case of the plaintiffs that by contract of insurance made in or about 1998-99, the plaintiffs agreed to insure vessels against P and I (Protection and Indemnity) risks on the terms as set out in the plaintiffs Rules, in consideration of a payment by the defendants of calls which are also called premia. It is the case of the plaintiffs that defendants are due and liable to pay insurance premia amounts quantified in paragraph 9 of the plaint. The plaintiffs have invoked arbitral clause. The second defendants are participating in the arbitration proceedings. The present suit is an action in rem by invoking the admiralty jurisdiction for security pending arbitral proceedings and to secure the amount that would be awarded by the Award to be made in the proceedings. In fact Prayer Clause (a) reads as under: that the first defendant vessel m. t. SYMPHONY-1 (ex-ARABIAN LADY) along with her hull, tackle, engines, machinery, boats, apparel and other paraphernalia at present lying in port and harbour Bombay be ordered to be arrested with a view to secure the plaintiffs claim in the arbitration proceedings instituted in London. " the amount as claimed and or cause shown, is that policy of insurance was made on the terms that the vessels and each of them should be deemed to form part of "fleet" for the purpose of Rules 5 (e) and 9 of the plaintiffs Rules, 1998, pursuant to which the second and third defendants were and remained jointly and severally liable to pay all the amounts due to the plaintiffs by way of calls or otherwise in respect of all the vessels within the fleet for the relevant policy years and i. e. under "fleet entry" principle. The compilation of documents which have been filed before this Court it is contended would indicate that even in respect of said vessel m. t. SYMPHONY there are unpaid premia. The 4th defendant had taken out motion for the reliefs as set out earlier. It is their contention as set out in the affidavit of Mehernoosh R. Khajotia, constituted Attorney of the 4th defendants, who has earlier intervened for the release of ship and have subsequently to be added as defendants that they are the mortgagees of the first defendant vessel. It is their case that the owners of the first defendant vessel have executed in favour of the 4th defendants, two deeds of mortgage dated 8-7-2002 and 11-7-2001 which have been duly registered with the registry of the St. Vincent and the Grenadines. The 4th defendants have filed a suit being Admiralty Suit No. 30 of 2002 for the enforcement of the said mortgages and for the recovery of the mortgage debt of the amount as set out therein. It is their case that the claim for insurance premia is not a maritime claim. It is their further contention that the present suit is founded on a right/entitlement to seek security, for the satisfaction of the plaintiffs claim in arbitration. In the suit as presently filed, no money claim or decree has been sought and the suit merely seeks security for the award that may be passed in arbitration proceedings. It is therefore, contended that considered the nature of the plaintiffs claim whether it be maritime claim or maritime lien, the same has to be determined in accordance with Lex Loci and not lex fori. The plaintiffs are based in United Kingdom and claims are required to be determined by arbitration in accordance with the Arbitration Act (United Kingdom), 1996 and the Rules applicable thereto. The English law does not recognise insurance premia as maritime claim and considering that the suit is misconceived and not maintainable. Considering the mortgage in favour of defendant No. 4, their claim ranks higher in priority over that of the plaintiffs. In paragraph 10, it is set out that even considering for argument that P and I Club premium, constitutes a maritime lien, it is settled law that this maritime lien is confined to the vessel alone and will not extend to sister ships. Hence, at best, the plaintiffs claim is for US $ 16,373. 09. It is specifically set out that the first defendant vessel is not the sister ship vessel considering as to when a ship can be said to be a sister ship. Mr. Cesar Pareira as constituted attorney of the plaintiffs has filed a reply. Various objections have been raised in paragraph 2 which need not be adverted to. It is then contended that the motion for dismissal of the suit is not maintainable as the suit is for security pending adjudication of the claim before the Arbitral Tribunal. The claim of the 4th defendant that there are mortgages in their favour is denied. It is then contended that the plaintiffs have sought order of arrest on the basis of the entitlement conferred by the international convention on arrest of ships 1999 as well as the law laid down by the Division Bench of this Honble Court in the m. v. Mehrab case. It is further averred that the dictum in the m. v. Mehrab case does not stipulate that an arrest pending arbitration can be granted only when the arbitration is in respect of a "maritime claim". The claim for unpaid P and I premia, is recognized to be Maritime Claim in India, in light of the judgment passed by the Appellate Bench of this Honble Court, in the case of S. E. A. SUCCESS 1. Various other contentions including priority of claims which is pointed out cannot be decided at this stage.

(3.) CONSIDERING the above, the issues which arise for consideration in this Notice of Motion may be formulated as under: