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Civil Miscellaneous Application in Admiralty Suit No.495 of 1986, decided on 10th September, 1976.

‑‑S. 3(2)(h)‑‑Admiralty jurisdiction‑‑Maintenance of claim‑‑Plaintiffs chartered defendant‑ship under a charter party which related to hire and use of defendant No.l‑‑Claim of plaintiff arising out of an agreement with defendants relating to said charter party‑‑Such agreement falling under cl. (h) of subsection (2) of S.3 of Ordinance which not only related to carriage of goods but also to use and hire of ship‑‑Claim arising from alleged breach of agreement, held, would consequently be maintainable under S. 3(2)(h).

‑‑‑Ss. 3(2)(h) & 4(4)‑‑Admiralty jurisdiction‑‑Action in rem‑‑Action in rem in‑ respect of a claim covered under S. 3(2)(h) is not excluded, same being covered by S. 4(4).

‑‑Art. 4(2)‑‑Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980), S. 3(2)(h)‑‑Claim arising as a result of fire‑‑Immunity given in cl. (2) of Art. 4 not extended where cause of fire was relatable to a fault or privity of carrier‑‑Immunity extended to carrier and ship was with regard to claim made by owners of cargo and applicable to charter party‑‑Claim of plaintiffs against defendants not relating to any contract of carriage by sea but arising under a charter party, same, held, could not be defeated on argument that immunity was provided against such claim under Art. 4 of Carriage of Goods by Sea Act, 1925.

‑‑‑S.3(2)(h)‑‑Admiralty jurisdiction‑‑Suit in rem and application for arrest of ship‑‑Plaintiff chartered defendant‑ship under a charter party and loaded a consignment‑‑Fire broke out on ship after it started duly loaded, for its destination‑‑Plaintiff contending that fire on ship was started fraudulently while defendants jointly contending that it was result of an accident‑‑Ship breaking journey from high sea berthed at port of refuge‑‑Plaintiff alleged that berthing of ship at port of refuge was deliberately and unreasonably delayed by defendants which amounted to a violation of understanding arrived at between parties resulting in loss and damages to plaintiffs which they were entitled to recover from defendants‑‑On tentative examination of material produced and contentions raised by counsel for parties, plaintiff succeeding in establishing a prima facie case in their favour‑ High Court ordered defendants to furnish security within a specified time failing which ship was ordered to be arrested.

‑‑‑S. 3(2)(h)‑‑Suit‑‑Defendants contending that plaintiff's name in suit was different to that shown as charterer and therefore, suit was not maintainable by plaintiffs‑‑Name of plaintiff was mentioned in charter party alongwith name of another party and in first counter affidavit which was filed on behalf of defendants, no such contention was raised that plaintiff was not competent to bring suit in their own name‑‑Contention repelled.

Makhdoom Ali Khan with Ahsan Zaheer Rizvi for Plaintiff.

Muhammad Naeem for Defendants Nos. 1 and 3.

Mahsoor Ahmed Khan for Defendant No.2.

I have heard detailed arguments on the application for arrest of the ship and for reasons to be recorded separately I pass the following short order:‑-----

The ship m.v. Brooklyn will not be arrested in case the defendants furnish security to the satisfaction of the Nazir of this Court equivalent to US 75,180 within two weeks from today failing which the ship will be arrested.

The plaintiffs have instituted the above suit in rem and alongwith the suit a miscellaneous application has been filed for arrest of "m.v. Brooklyn" (defendant No. l). I heard the learned counsel for the parties at length and by a short order dictated in Court after hearing them on 10‑9‑1986 directed the defendants to furnish a security to the satisfaction of the Nazir of this Court equivalent to US 75,180 within two weeks from the date of the order failing which defendant No.l was allowed to be arrested.

The plaintiff chartered the ship "m.v. Brooklyn" (defendant No.l) under a charter party dated 27‑1‑1986. After chartering the ship the plaintiffs loaded a consignment of Soyabean weighing 12,531 metric tons from the port of Kandla (India) for shipment to Constantza (Rumania). The 'defendant No.2 are the owners of the ship while defendant No. 3 claims to have entered into an agreement with defendant No.2 for purchase of the ship for the purposes of scrapping. It is common ground between the parties that a fire broke out on the ship on 6‑3‑1986 after the ship had left the Indian port Kandla and as such it could not continue its onward journey. The case of the plaintiff is that the fire on the ship was started fraudulently while defendants jointly contend that it was the result of an accident. The ship was brought from the high seas to the port of refuge (Karachi) by the owners of the ship and a general average was declared. It is urged by the plaintiffs that after the ship was brought to Karachi port they requested the defendants No.l and 2 either to declare the voyage as abandoned or to get their vessel repaired to continue its onward voyage. It is further alleged that instead of acceding to the above request of the plaintiff the defendant No.2 demanded total freight of the cargo payable under the charter party and refused to berth the ship at Karachi in order to arrange transshipment of the cargo, until and unless the freight was so paid to them. It is contended by the plaintiffs that as the consignment on board the ship was prone to decay and damage on account of heat the plaintiffs had no option but to enter into the settlement Annexure "B" to the plaint with defendants No.l and 2 in order to save the cargo from damage and decay. The plaintiff under the above arrangement agreed to deposit with M/s. M. Vogemann a sum of US 65000 for payment to defendants No. 1 and 2 and the said defendant in turn agreed to bring "m.v. Brooklyn" to a commercial berth at Karachi Port to facilitate transshipment of cargo by the plaintiffs. This arrangement as reflected in Annexure "B" to the plaint is admitted by the defendants. It is also not disputed that pursuant to the above understanding "m.v. Brooklyn" was brought to K.P.T. berth No.12 at Karachi port and the entire cargo of Soyabean was transferred from it to another vessel "m.v. Anatolia", chartered by the plaintiffs for the purposes of transshipment. However, the plaintiffs have alleged that the berthing of defendant No.l at the Karachi port was deliberately and unreasonably delayed by defendants Nos. 1 and 2 which amounted to a violation of understanding arrived at between the parties vide Annexure "B" to the plaint and this resulted in loss and damages to the plaintiffs which they are entitled to recover from defendants Nos. 1 and 2. It is also urged by the plaintiff that berth No.12 where defendant No.l was ultimately berthed was not a commercial berth as it did not have facilities like shorecrane etc. with the result the plaintiffs had to incur extra expenses for arranging transshipment of the cargo from defendant No.1 to m.v. Anatolia. The plaintiffs have accordingly claimed the following amounts in paragraph 11 of the plaint as damages from the defendants No. l and 2.

"(i) Paid to the stevedores US Dollars 1,52,770

(ii) Demurrage suffered due to the delay in

transhipment directly as a result of the

breach of the terms by the owners. US Dollars 88,000

(iii) Higher freight charges paid due to

the bench of charter party. US Dollars 75,180

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3,15, 950

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The plaintiffs contend that in relation to their above mentioned claim defendant No.l is liable to be arrested in exercise of the admiralty jurisdiction of this Court. The above claims of the plaintiffs are totally denied by the defendants. The defendants have jointly taken up the position that the admiralty suit instituted by the plaintiffs is not maintainable as the claim of the plaintiffs in the suit does not fall under any of the sub‑clauses of subsection (2) of section 3 of the Admiralty Jurisdiction of the High Courts Ordinance 1980 (for the sake of convenience I will hereinafter refer the Admiralty jurisdiction of High Courts Ordinance, 1980 as "the said Ordinance"). Alternatively it is urged by the learned counsel for the defendants jointly that even if the suit of the plaintiffs is held to be competent under the provisions of the said Ordinance the suit could not be instituted in rem in view of the provisions of section 4(2) of the said Ordinance; and in any case the ship having been declared a total loss it could not qualify the definition of the "ship" as given in section 2(k) of the said Ordinance and as such it could not be proceeded against in an action in rem under the provisions of the said Ordinance. On merits the learned counsel for the defendants jointly contend that there being nothing on record to show that the defendant No.2 was a privity to the fire which broke out on the ship on 6‑5‑1986, the allegations of the plaintiffs that the fire was fraudulently started is preposterous and in any case the plaintiffs having failed to disclose the particulars of fraud as required under the law the same cannot be taken into consideration by the Court. It is also urged that the defendants No.l and 2 are fully protected under clause (2) of Article 4 of the Carriage of Goods by Sea Act, 1925, in respect of the claim in the suit and as such the question of arrest of defendant No.l against the claim of the plaintiff does not arise at all. It is lastly urged by the learned counsel for the defendants that the suit having been brought by a person other than the "charterer" of the ship no notice of the claim by such an unauhorised person can be taken by the Court much less to arrest the ship at the instance of such a person.

I will first of all take‑ up the legal contentions advanced by the learned counsel for the defendants in opposition to the application of the plaintiffs for arrest of defendant No.l.

It is jointly contended by the defendants that the claim of the plaintiffs as disclosed in the plaint does not fall under any of the sub‑clause of section 3 of the Ordinance and as such the suit filed by the plaintiffs under Admiralty jurisdiction of this Court is not maintainable. The plaintiffs have relied on sub‑clauses (g) and (h) of subsection (2) of section 3 of the said Ordinance to contend that the suit brought by them under the admiralty jurisdiction of this Court is maintainable. However, after I heard the case for some time, the learned counsel for the plaintiffs conceded that the claim of the plaintiffs did not fall under clause (g) and therefore, he only relied on clause (h) of the aforesaid section to support his contention that the suit instituted by the plaintiffs under the admiralty jurisdiction is maintainable. The relevant clause (h) relied by the plaintiffs is as follows: ‑

"3(2) .........................

(h) any claim arising out of any agreement relating to the Carriage of Goods in a ship or to the use and hire of a ship."

Learned counsel for the defendants jointly contend that as the claim of the plaintiffs does not relate to any agreement relating to the carriage of goods, therefore, the suit instituted by them is not covered under the above referred clause of subsection (2) of section 3 of the said Ordinance. It is an admitted position that the plaintiffs chartered defendant No.l from defendant No.2 under a charter party dated 27‑1‑1986. A careful reading of the provision referred to above will show that the claim not only relating to the carriage of goods but also to the use and hire of the ship could be made under the aforesaid provisions of law. It cannot be disputed that the charter party dated 27‑1‑1986 related to the hire and use of defendant No.l and, therefore, any claim relating to the said charter party will prima facie fall under clause (h) of subsection (2) of section 3 of the said Ordinance and consequently a claim arising from alleged breach of such an' agreement will be maintainable under the aforesaid clause.

The next legal objection of the learned counsel for the defendants jointly is that the claim of the plaintiffs is based on clause (h) of subsection (2) of section 3 of the said Ordinance, while section 4(2) of the said Ordinance provides that only in respect of claim arising under clauses (a) to (d), (i) and (r) of subsection (2) of section 3 of the said Ordinance, an action in rem would lie under the Admiralty jurisdiction of this Court. It is accordingly contended that by necessary implication, filing of a suit in rem in respect of claim falling under: clause (h) of section 3 (2) of the Ordinance shall be deemed to have been prohibited. Subsection(2) of section 4 of the Ordinance relied by the learned counsel for the defendants reads as under:‑-----

"4. (2) The Admiralty jurisdiction of the High Court may in the cases mentioned in clauses (a) to (d), (i) and (r) of subsection (2) of section 3 be invoked by an action in rem against the ship or property in question."

No doubt in subsection (2) of section 4 of the Ordinance clauses (e) to (h) and (j) to (q) subsection (2) of section 3 of the Ordinance are not mentioned but the learned counsel for the defendants completely overlooked the provisions of subsection (4) of section 4 of the Ordinance which provides that an action in rem will also lie in respect of claims arising out of the above mentioned omitted sub‑clauses and in some respect such 'proceedings' were given wider scope and effect. I, therefore, do not agree with the learned counsel for the defendants that because of the provisions of subsection (2) of section 4 an B action in rem in respect of a claim covered under clause (h) is) excluded.

Another legal objection of the learned counsel for the defendants is that defendant No. l having been declared a total loss is stripped of its navigational qualities and as such it cannot be treated as a "ship" as defined in section 2(k) of the Ordinance. Accordingly it is contended that an action in rem would not lie against such a vessel. The contention of the learned counsel for the defendants primarily depends on a finding that defendant No.l is no more possessed of any navigational qualities which in turn is a question of fact and can be resolved only after evidence in the case has been recorded. At this stage, while I am considering interim application for arrest it is not possible to consider the above contentions of the learned counsel for defendants. Having dealt with the legal objections raised by the learned counsel for the defendants jointly in opposition to the arrest of defendant No. 1, I will now deal with the contentions of the learned counsel on merits. On merits the learned counsel for the defendants have jointly urged that there being no evidence on record presently to show that the defendant No.2 was a privity to the fire which broke out on 6‑5‑1986 and the allegation of the plaintiffs relating to fraudulent fire being vague and lacking in particulars the same cannot be taken into consideration by the Court. In reply to the above joint contention of the learned counsel for the defendants, learned counsel for the plaintiffs submitted that at the time the suit was instituted by them the material relating to the nature of the fire on ship was not available with them as the same was supplied later on; but nevertheless the survey reports now being part of the record could be legitimately looked into to ascertain prima facie the truth in the allegation of the plaintiffs with regard to the fraudulent fire on defendant No.l. It is contended on behalf of the plaintiffs that on examination of the two survey reports, namely, one filed by the defendants and the other filed by the plaintiffs it cannot be said that the allegations of the plaintiff regarding fraudulent fire on the ship were preposterous or unfounded. It is true that in the plaint the plaintiffs have only made allegation that the fire which started on the ship on 6‑5‑1986' was fraudulent without giving any further particulars but it cannot be ignored that the plaintiffs at the time of institution of the suit had not enough material to verify the causes of the fire. The causes of the fire have been stated in the two survey reports brought on record by the plaintiffs as well as defendants and after going through these reports, tentatively for the purposes of present application it cannot be said that the allegations of the plaintiffs regarding nature of the fire are totally unfounded. The exact nature and result of the fire is to be scrutinized only after the entire evidence is brought on record but for the purposes of the present application upon a tentative examination of the material I am satisfied that the plaintiffs cannot be non‑suited at this stage merely because they had failed to disclose the particulars of the fraud alleged against the defendants in relation to the fire. In the light of the two survey reports it is open to the plaintiffs if they so feel necessary to amend their plaint and give further particulars with regard to the allegation of fraudulent fire made in the plaint. The next contention of the learned counsel for the defendants jointly on merits is that the defendants are fully protected against the claim of the plaintiffs in the suit in view of clause (2) of Article 4 of the Carriage of Goods by Sea Act, 1925. The relevant clause (2) of Article 4 relied by the learned counsel for the plaintiffs is in the following terms:‑---

"2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from‑‑

(a) act, neglect or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship;

(b) fire, unless caused by the actual fault or privity of the carrier:"

No doubt under the aforesaid clauses both the ship and the carrier are immune against claim arising as a result of fire but this immunity is not extended where the cause of the fire is relatable to a fault or privity of the carrier. Secondly a careful reading of Carriage of Goods by Sea Act, 1925 will show that the immunity extended to the carrier and the ship is with regard to claim made by the owners of the cargo. Learned counsel for the plaintiffs rightly pointed out the provisions contained in Article 5 of Act 26 of 1925 which provides that the provisions of these rules are not applicable to charter‑party. In the present case the claim of the plaintiffs against defendants No. l and 2 does not relate to any contract of carriage by sea but is a claim arising under a charter‑party. It is true that under clause (22) of the charter‑party a reference is made to the terms of Articles 3 and 4 of the Carriage of Goods by Sea Act but such reference prima facie is only intended to cover the claim of the owner of the cargo and not the claim of the Charterer against owner arising under the charter‑party. In these circumstances the case of the plaintiffs which is based on the alleged breach of charter‑party could not be defeated on the argument that immunity is provided against such claim under Article 4 of the Carriage of Goods by Sea Act, 1925. It may be mentioned here that the examination of the contentions of the learned counsel for the parties at this stage is purely of a tentative nature for the purposes of discovering a prima facie case in favour of the plaintiffs. A deeper and full appreciation of these contentions is not possible at this stage of hearing which could only be undertaken at the trial of the suit when all the evidence will be available before the Court. It may also be mentioned here that in order to ascertain whether the jurisdiction of the court exists with relation to the claim of the plaintiffs the same is to be examined with reference to the allegations and averments made in the plaint. On a tentative examination of the averments made in the plaint I am satisfied that prima facie the claim of the plaintiffs is maintainable under the admiralty jurisdiction of this court and that the immunity claimed by the defendants No.l and 2 in respect of such claim is not claimable under the provisions of the Carriage of Goods by Sea Act, 1925. I am, therefore, of the view that on a tentative examination of the material before me and the contentions raised by the learned counsel for the parties the plaintiffs have succeeded in establishing a prima facie case in their favour. I will now proceed to examine the extent of security which may be demanded from the defendants in the circumstances of the case as an alternative to the arrest of the ship prayed by the plaintiffs. I have already reproduced in the earlier part of this order the claim of the plaintiffs made in paragraph 11 of the plaint. The first item of claim of the plaintiffs relates to the amount paid to stevedores. It is an admitted position that the consignment of Soyabean was transferred at Karachi port from m.v. Brooklyn to m.v. Anatolia for transhipment. In the process of transhipment the payment made to stevedores are incidental unless it is otherwise established by the plaintiffs. The next item of the claim relates to the alleged demurrage suffered by the plaintiffs on account of the delay in transhipment which is attributed to defendant No.2. It is alleged that firstly, the defendants did not bring in their ship for berth at the port in proper time and secondly, the berth which was made available to the plaintiffs for transhipment did not have the usual commercial facilities. The defendants alongwith one of their affidavits have placed on record the certificate issued by the K . P . T . showing that berth No.12 was allotted to them by the Authorities in the usual course and that the said berth was a commercial berth for all practical purposes. There is nothing on record at this moment to reach the conclusion that there was any default or neglect on the part of the defendants in bringing their ship promptly to berth No.12 for the purposes of transhipment. In these circumstances, in so far the items of claim 1 and 2 on the present material before me is concerned it cannot be said to have arisen directly as a result of breach of the charter party dated 27‑1‑1986. However, the position with regard to claim No.3 of paragraph 11 of the plaint is different. It is not seriously disputed before me that as a result of transshipment of the cargo the plaintiffs had to pay higher freight charges. It is not disputed that the transhipment of the cargo was the result of fire on the ship m.v. Brooklyn and, therefore, prima facie third item of claim in paragraph 11 has a direct nexus with charter party dated 27‑1‑1986. I will, therefore, for the present only direct the defendants No.l and 2 to furnish security to the satisfaction of the of this court equivalent to US 75,180 within two weeks from) the date of the short order failing which the ship m.v. Brookly will be arrested for the above claim of the plaintiffs. Before parting with the case, I may mention here that an attempt was made on behalf of the defendants No.l and 3 to contend before me that the plaintiffs in the suit for F.C.L Limited while the charterer shown in Annexure "A" are the First Consolidated Lines, Liberia. It is accordingly contended that the suit at the instance of F.C.L. Limited, is not maintainable. In the charter‑party dated 27‑1‑1986 the name of the present plaintiff is mentioned alongwith First Consolidated Lines. In the first counter‑affidavit Which was filed in the case on behalf of the defendants no such contention was raised that the plaintiff is not competent to file the suit in their own name. Apart from it Annexure "R" to the plaint which is an admitted document of the parties was sent by the plaintiffs which incorporated the subsequent agreement on the basis of which the transhipment of the consignment has taken place. In these circumstances I am not inclined to accept contention of defendants that the plaintiffs cannot maintain the suit in its own name.

The application for arrest is disposed of in terms of the above order.

M.Y.H./F‑14/K Order accordingly

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