DIRECTORATE GENERAL OF SHIPPING ““““ FLOOR stakeholders on 04.12.12 in the Directorate...

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On DGS Website

भारत सरकार / / / / GOVERNMENT OF INDIA

पोत प�रवहन मंऽालय / / / / MINISTRY OF SHIPPING

नौवहन महािनदेशालय / DIRECTORATE GENERAL OF SHIPPING

““““�बटा �ब��डंग””””, 9 वी मं�जल //// ““““BETA BUILDING”, 9th FLOOR

आय-िथंक टे' नो कॅ) पस / I-THINK TECHO CAMPUS

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ई-मेल/ E-mail: [email protected] मुंबई-400 042/MUMBAI–400 042 वेब//// Web: : : : www.dgshipping.gov.in

F.No.MSL-11(9) 99 - VII Dated: 18.08.2014

Notice inviting comments from the stakeholders concerned

The Directorate is considering a proposal for an enactment of the Admiralty (Jurisdiction

and Settlement of Maritime Claims) Bill which consolidates and amends the laws relating to the

Admiralty Jurisdiction of Courts, legal proceedings in connection with vessels, their arrest,

detention, sale and matters connected therewith or incidental thereto.

The said draft Bill [first working draft dated 09.02.12] has already been discussed with

the stakeholders on 04.12.12 in the Directorate General of Shipping, GOI. However, recently

the Ministry of Law & Justice, GOI, has prescribed a new pre-legislative consultation policy to be

followed while making legislations by the respective Departments/Ministries.

Accordingly, in order to meet the said requirement an explanatory note along with the

proposed draft Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill, is placed here

on the official website of the Directorate [www.dgshipping.gov.in] for valuable comments /

suggestion of all stake holders concerned, on the proposed draft Bill.

The comments may kindly be sent to the Directorate at the earliest or latest by

18.09.2014 to the following e-mail IDs;

[email protected] & [email protected].

Yours faithfully,

(Ash Mohomad)

Assistant Director General of Shipping (MSL)

To

All the stake holders concerned through DGS Website.

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Explanatory Note

1.0 Introduction:

1.1 The Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill, 2012 is proposed to be

a comprehensive legislation on Admiralty Law of India, which intended to covers all the claims

against the ship owner or the ship.

1.2 The enactment of this proposed Admiralty Bill will help to codify and clarify the admiralty

laws of the country in accordance with the observations of the Supreme Court in the case of

M.V. Elizabeth & Others Vs Harwan Investment & Trading Pvt. Ltd. JT 1992 (2) SC 65. The

Admiralty Bill once enacted will also repeal the outdated and obsolete laws made during the

British period on admiralty jurisdiction.

2.0 Background and Scope:

2.1 The Supreme Court in the case of M.V. Elizabeth & Others Vs Harwan Investment &Trading

Pvt. Ltd. JT 1992(2) S.C. 65, while stressing on the need to codify and clarify the admiralty laws

of the country had observed that:

“Admiralty jurisdiction, an unfamiliar branch of jurisprudence, was the subject of illuminating

debate in this appeal directed against judgment of the Andhra Pradesh High Court. But what

was surprising to hear, even in 1991, that the admiralty jurisdiction by the High Courts in Indian

Republic is still governed by the obsolete Acts of 1861, 1890 & 1891. Yet there appeared no

escape from it, not withstanding its unpleasant echo in ears. The shock was still greater when it

transpired that this state of affairs is due to lack of legislative exercise. Various provisions in

1890, Act have been rendered not only anomalous but even derogatory to the sovereignty of

the state. Nothing further need be said except the hope that the unfortunate state of affairs

shall be bought to an end at the earliest.”

2.2 Pursuant to the above directions of the Hon. Supreme Court the whole question of

admiralty jurisdiction was examined by the Law Commission of India. Based on the

recommendations of the Law Commission of India the Admiralty Bill, 2005 was drafted.

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Thereafter the Admiralty Bill was revised and the Admiralty (Jurisdiction & Settlement of

Maritime Claims) Bill, 2009 was circulated to various Ministries. However due to the dissolution

of the 14th

Lok Sabha, the said Admiralty Bill was lapsed.

2.3 Later on, a revised draft Note for the Cabinet enclosing inter alia the revised draft Admiralty

(Jurisdiction & Settlement of Maritime Claims) Bill, 2009 with required explanation for changes

made was again referred to the Legislative Department. Finally the Legislative Department of

the Ministry of Law sent the First Working Draft of the Admiralty (Jurisdiction & Settlement of

Maritime Claims) Bill, 2012 along with the Draft Cabinet Note to the Ministry of Shipping which

was sent to the Directorate General of Shipping. This revised draft Admiralty Bill, 2012

incorporates the recommendations of the Parliamentary Standing committee and extensive

consultations with other Departments /stakeholders. This draft Bill [first working draft dated

09.02.12] was discussed with the stakeholders on 04.12.12 in the Directorate General of

Shipping, GOI & corrected/revised version was sent to the Ministry of Shipping on 14.01.13.

Later on a revised version of explanation to section 2 (1) (j) of the proposed bill [as written in

the enclosed draft Bill] was also sent to the Ministry of Shipping on 04.07.13.

2.4 The extent of the proposed draft Admiralty (Jurisdiction and Settlement of Maritime Claims)

Bill, 2012 relates to the jurisdiction of courts, legal proceedings in connection with the vessels,

their arrest, detention and sale and matters connected therewith or incidental to shipping.

3.0 Features of the proposed draft Admiralty (Jurisdiction & Settlement of Maritime Claims) Bill:

3.1 The proposed draft Admiralty Bill seeks to consolidate and amend the existing laws relating

to admiralty jurisdiction, vests civil jurisdiction with High Courts in admiralty cases and lastly

lays down the scope of admiralty jurisdiction in India.

3.2 The Bill also seeks to repeal the (a) the Admiralty Court Act, 1840 (b) Admiralty Offences

(Colonial) Act, 1849, (c) Admiralty Jurisdiction (India) Act, 1860, (d) Admiralty Court Act, 1861,

(e) Colonial Courts of Admiralty Act, 1890, (f) Colonial Courts of Admiralty (India) Act, 1891, and

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(g) the provisions of the Letters Patent, 1865 applicable to the admiralty jurisdiction of the

Bombay, Calcutta and Madras High Courts.

3.3 In addition, the Admiralty Bill also specifies when the court can proceed in personam (i.e.

against a person rather than property for enforcing a liability) and when admiralty jurisdiction

can be invoked by an action in rem (i.e., against the ship or property rather than a person).

3.4 The Admiralty Bill also clearly specifies the order of priority in settling claims in admiralty

proceedings when a ship is sold in an action in rem. It also lays down the principles that shall

apply while determining the priority of claims.

3.5 Lastly, the proposed Admiralty Bill lays down provisions relating to maritime lien. The ship

or its property can be used to settle claims for compensation for services rendered while saving

life or the ship, wages due to master or crew of the ship, claim for loss of life or injury due to

operation of ship, pilotage dues, port, canal or other waterway dues, claim arising out of

physical damage caused by ship. However, it cannot be used to settle claims arising out of

damage in connection with carriage of oil or other hazardous or noxious substances or

radioactive matter etc.

4.0 Pre-legislative Consultative Policy:

4.1. The Ministry of Law & Justice, GOI vide its D.O. letter No. 11 (35)/2013-L1 dated 05.02.14

has prescribed a pre-legislative consultation policy to be followed while making legislation.

Although the said draft Bill has already been discussed with the stakeholders on 04.12.12 in the

Directorate General of Shipping, GOI. However, in order to meet the new procedure prescribed

by the Ministry of Law,GOI, the draft Bill is placed on the official website of the DG Shipping,

GOI [www.dgshipping.gov.in] for minimum 30 days for the comments of the stakeholders.

5.0 Proposed draft Admiralty (Jurisdiction & Settlement of Maritime Claims) Bill:

5.1 The proposed draft Bill under consideration is placed below for comments of the

stakeholders:

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First working Draft

[Legislative Department]

9th

February, 2012

[Revised proposed draft Bill, based on the discussions held in the meeting with

stakeholders 04.12.12]

THE ADMIRALTY (JURISDICTION AND SETTLEMENT

OF MARITIME CLAIMS) BILL, 2012

A

BILL

to consolidate and amend the law relating to the admiralty jurisdiction of

courts, legal proceedings in connection with vessels, their arrest, detention and sale and matters connected therewith or incidental thereto;

BE it enacted by Parliament in the Sixty-third Year of the Republic of India

as follows:-

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Admiralty (Jurisdiction &

Settlement of Maritime Claims) Act, 2012.

(2) It shall come into force on such date as the Central

Government may, by notification in the Official Gazette, appoint.

Short title and

commencement

2. (1) In this Act, unless the context otherwise requires, -

(a) “admiralty jurisdiction” means jurisdiction exercised by a

court on any matter referred to in section 5;

(b) “admiralty proceeding” means any proceeding pending

before a court, exercising admiralty jurisdiction, on or after the

commencement of this Act;

(c) “charge” means any due with reference to port or pilotage,

Definitions

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but does not include any charges in respect of light dues,

lighthouses, buoys or beacons;

(d) “court” means the High Court or any other court exercising

admiralty jurisdiction under section 3;

15 of 1908

15 of 1908

44 of 1958

(e) “goods” means any property including live animals,

containers, pallets or such other articles of transport or packaging

supplied by the consignor, irrespective of the fact whether such

property is to be carried on or under the deck;

(f) “High Court” in relation to Admiralty proceedings, means

any of the High Court of Calcutta, High Court of Bombay, High

Court of Madras, High Court of Karnataka at Bangalore, High Court

of Gujarat at Ahmedabad, High of Orissa at Cuttack, High Court of

Kerala at Cochin and High Court of Andhra Pradesh at Hyderabad

in India;

(g) “inland waters” includes all waters that are in fact

navigable, irrespective of whether they are affected by tides or are

land-locked or open or contain salt or fresh waters, and any part of

the sea adjacent to the coast of India notified by the Central

Government to be inland waters for the purposes of this Act;

(g) “limits of the port” shall have the meaning assigned to this

expression in the Indian Ports Act, 1908;

(h) “maritime lien” means the maritime lien specified in section

13;

(i) “port” shall have the meaning assigned to it in the Indian

Ports Act, 1908;

(j) “vessel’ includes any ship, boat, sailing vessel or other

description of vessel used in navigation.

[Explanation: Save and except the claims of the Master,

Officer and other Members of the Vessel’s complement, in respect of

their employment or arising out of direct connection with the

operation of the vessel, during the course of their employment,

including, but not limited to claims by such Master, Officer and

other Members of the Vessel’s complement for wages, cost of

repatriation, social insurance, contributions, loss of life or personal

injury and disbursements, a vessel ceases to be a vessel for the

purpose of a court exercising its admiralty jurisdiction on such

vessel, once, (a) permission for beaching for the purpose of

breaking and/or demolition of the said vessel has been obtained

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from the relevant authority, (b) Bill of Entry for home consumption

for the purpose of breaking and/or demolition of the said vessel has

been filed, and (c) total duty assessed by the Customs authorities

for an import of the said vessel for breaking and/or demolition has

been paid to the Custom’s authorities.”

(2) The words and expressions used herein but not defined and

defined in the Merchant Shipping Act, 1958 shall have the meanings

respectively assigned to them in that Act.

CHAPTER II

JURISDICTION OF COURTS

[definition of

exclusive

economic

zone may be

required]

3. (1) Subject to the provisions of sub-section (2), the civil

jurisdiction in respect of all claims under this Act shall vest in the

High Court and be exercisable over the waters upto and including

the territorial waters and inland waters of their respective

jurisdiction and Exclusive Economic Zone of India be in accordance

with the provisions contained in this Chapter.

(2) If at any time, the High Court is of the opinion that the

number of cases filed under this Act is unduly large, it may, by

notification in the Official Gazette, confer admiralty jurisdiction in

such matters, wholly or to the extent it considers necessary, on such

of the principal civil courts of the State as may be specified in the

notification.

(3) Any notification referred to in sub-section (2) may also contain

such supplemental, incidental and consequential provisions as the

High Court may deem necessary.

Jurisdiction of

courts

4. The Supreme Court may on application of any party, transfer, at

any stage, any admiralty proceeding from one High Court to any

other High Court and the latter High Court shall proceed to try, hear

and determine the matter from the stage at which it stood at the time

of transfer.

Provided that no such proceeding shall be transferred unless

parties to the proceeding have been given an opportunity of being

heard in the matter.

Transfer of

proceedings by

Supreme Court

5. (1) The court shall have jurisdiction-

(a) to hear and determine any of the questions and claims by or

against vessel mentioned in sub-section (2);

(b) in relation to any of the proceedings mentioned in section 7;

Admiralty

jurisdiction

(2) For the purpose of clause (a) of sub-section (1), a court may

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44 of 1958

exercise jurisdiction to hear and determine any of the following

questions or maritime claims, namely:-

(a) any claim to the possession or ownership of a vessel or to

the ownership of any share therein;

(b) any question arising between the co-owners of a vessel as

to its possession, employment, operation or earnings of that vessel;

(c) any claim in respect of a registered mortgage or of charge

on a vessel or any share therein;

(d) any claim for damage caused to a vessel during her stay, or

voyage;

(e) any claim for damage caused by a vessel including civil

liability for damage caused by pollution covered under the

Merchant Shipping Act, 1958;

(f) any claim for loss of life or personal injury sustained in

consequence of any defect in a vessel or in her apparel or

equipment or in its operation, or in its operation, or in consequence

of the wrongful act, neglect or default of-

(i) the owners, charterers or persons in possession or

control of a vessel; or

(ii) the master or crew of a vessel, or any other person for

whose wrongful act, neglect or default—the owner, charterer

or person in possession or control of a vessel is responsible,

being an act, neglect or default, in the navigation or

management of the vessel, in the loading, carriage or

discharge of goods on, in or from the vessel, or in the

embarkation, carriage or disembarkation of persons on, in or

from the vessel;

(g) any claim for loss of or damage to goods carried on board a

vessel;

(h) any claim arising out of any agreement relating to the

carriage of goods and passengers on board in a the vessel or to

the use or hire of a the vessel whether contained in a charter party

or otherwise;

(i) any claim in respect of services rendered for salvage in

saving life from a vessel or in preserving the vessel, cargo,

equipment, apparel or of any other property of the vessel or wreck;

(j) any claim in the nature of towage, pilotage in respect of a

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44 of 1958

vessel;

(k) any claim in respect of goods, materials, provisions, bunker,

insurance premiums or other necessaries supplied to a vessel or

any services rendered to a vessel for her operation or maintenance;

(l) any claim in respect of-

(i) the construction of a vessel;

(ii) the alteration, repair or equipping of a vessel,

(iii) any liability for any port, harbour, canal or light tolls,

charges, dues, tolls, charges or dues of similar kind in relation

to a vessel;

(m) notwithstanding anything contained in the provisions of

sections 150 and 151 of the Merchant Shipping Act, 1958, any

claim by a master or member of the crew of a vessel or their heirs

and dependants for wages or any sum allotted out of

wages or adjudged to be due which may be recoverable as

wages or cost of repatriation or social insurance contribution

payable on their behalf or any amount an employer is under an

obligation to pay to a person as an employee,

whether the obligation arose out of a contract of

employment or by operation of a law (including operation of a law

of any country) for the time being in force, and includes any

claim arising under a manning and crew agreement,

relating to a vessel;

(n) any claim by a master, shipper, charterer or agent in respect

of disbursements made on account of a vessel;

(o) any claim arising out of an act which is or is claimed to be in

the nature of general average;

Explanation- For the purposes of this clause, “general average”

means any extraordinary sacrifice or expenditure voluntarily and

reasonably made or incurred in time of peril for the purpose of

preserving the vessel or property imperiled in the common

adventure;

(p) any claim arising out of bottomry. Any dispute arising out of

a contract for the sale of the vessel.

(3) While exercising jurisdiction under clause (b) of sub-section

(2), the court may settle any account outstanding and unsettled

between the parties in relation to a vessel, and direct that the vessel,

or any share thereof, shall be sold, or make such other order as the

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court thinks fit.

(4) The provisions of this section shall apply to–

(a) in relation to all vessels whether Indian or not irrespective

of the residence or domicile of owners thereof;

(b) in relation to all maritime claims, wherever arising

(including, in the case of cargo or wreck salvage, claims in

respect of cargo or wreck found on land); and

(c) all registered mortgages or charges, whether legal or

equitable, including mortgages and charges created under any

foreign law.

6. (1) The admiralty jurisdiction of the court shall not be invoked

by an action in rem by arrest of a vessel, in the case of a vessel

registered in India as an Indian vessel, unless four two clear working

days’ notice in writing is served upon the registered owner or the

master of the vessel intended to be proceeded against, stating the

cause of action and the quantum of claim and the date and time or

application of the court for arrest and calling upon the owner or

master to provide security for the claim to the satisfaction of the

admiralty court in lieu of the arrest and where such a security is

provided, the court shall entertain the action without arresting the

vessel and shall order the arrest of the vessel only in the event of

failure to provide such security. (it should be ensured here that the

four days cannot be used for action with illegal intention to beat the

system)

(2) Notwithstanding anything contained in this Act or any other

law for the time being in force, the admiralty jurisdiction of the High

Court shall not be invoked by action in rem unless the vessel against

which the proceedings have been commenced is within the territorial

or inland waters of India at the time of commencement of the

proceedings and as such is within the jurisdiction of that High Court;

Provided that no such vessel shall be arrested unless there is

failure to provide security.

Conditions in

respect of

Indian Vessels

and vessels

presence for

invoking

admiralty

jurisdiction in

rem.

[here it may

be personam] 7. (1) The jurisdiction of the court may be invoked by an action in

rem in the cases,-

(i) referred to in clauses (a) to (c), (e) and (p) of sub-section

(2) of section 5; or

(ii) of maritime lien or charge on any vessel or its property

including bunker.

Mode of

exercise of

admiralty

Jurisdiction

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(2) In the case of any such claim as is mentioned in clauses (d),

and (f) to (o) of sub-section (2) of section 5, where–

(a) the claim arises in connection with a vessel; and

(b) the person who would be liable on a claim in an action in

personam (hereinafter referred to as the ‘the relevant person’)

was, when the cause of action arose, the beneficial owner, or

charterer of, or in possession, or in control of the vessel,

admiralty jurisdiction may be invoked (whether or not the claim gives

rise to a maritime lien on that vessel) by an action in rem against,-

(i) that vessel, if at the time when the action is brought the

relevant person is either the beneficial owner of that ship as in

respects all the shares in it or the charterer of it under a charterer

by demise; or

(ii) any other vessel of which, at the time when the action is

brought, the relevant person is the beneficial owner as in respects

all the shares in it.

(3) Where, in the exercise of its admiralty jurisdiction, the court

orders any vessel or other property to be sold, the court shall have

jurisdiction to hear and determine any question arising as to title to

the proceeds of sale.

8. (a) A court may in the exercise of its admiralty jurisdiction

order the arrest of any vessel for the purpose of providing security for

a claim which is or may be the subject of an arbitration or any

proceedings contemplated, pending or proceeding, either in India or

elsewhere, and whether or not it is subject to the law of India, if the

person seeking the arrest has a claim enforceable by an action in

personam against the owner of the vessel concerned or an action in

rem against such vessel or which would be so enforceable but for any

such arbitration or proceedings.

(b) Any vessels so arrested or any security for, or the proceeds of,

any such vessel shall be held as security for any such claim or

pending the outcome of any such arbitration or proceedings.

(c) Unless the court orders otherwise any vessel so arrested shall

be deemed to be vessel arrested in an action in terms of this act.

89 (1) This section applies to any claim for damage or loss of life or

personal injury arising out of-

(i) a collision between vessels; or

Restrictions on

entertainment

of actions in

personam in

collision and

other similar

cases.

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(ii) the carrying out of or omission to carry out, a manoeuvre

in the case of one or more vessels; or

(iii) non-compliance, on the part of one or more vessels, with

the collision regulations.

(2) While exercising admiralty jurisdiction, a court shall not

entertain any action in personam against any defendant unless-

(a) such defendant, at the time of commencement of the

action, actually and voluntarily resides or carries on business

or personally works for gain in India;

Provided that an action may be entertained in any case,

where there are more defendants than one if the defendant

who does not actually and voluntarily reside or carry on

business or personally work for gain in India is made a party

to such action either with the leave of the court, or each of

such defendants acquiesces in, such institution; or

(b) the cause of action, wholly or in part, arises in India,

including inland waters of India or within the limits of a port

of India;

(3) A court shall not entertain any action in personam against

any defendant-

(a) if an action arising out of the same incident or series of

incidents is pending in a court or has been heard and

determined by such court or

(b) if a vessel is beneficially owned or chartered by demise

by the defendant and such vessel has been arrested and

proceedings are pending in respect thereof.

(4) The court shall not entertain any action in personam to

enforce a claim to which this section applies until any proceedings

previously brought by the plaintiff in any court outside India against

the same defendant in respect of the same incident or series of

incidents have been discontinued or have otherwise come to an end.

(5) The provisions of sub-sections (2), (3) and (4) shall apply to counter-claims (except counter-claims in proceedings arising out of the same incident or series of incidents) as they apply to actions, and a reference to the plaintiff and the defendant for this purpose shall be construed as reference to the plaintiff in the counter-claim and the defendant in the counter-claim respectively.

(6) The provisions of sub-sections (2), (3) and (4) shall not apply

to any action or counter-claim if the defendant submits or agrees to

submit the jurisdiction of the court.

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(7) Subject to the provisions of sub-section (4), the court shall

have jurisdiction to entertain an action in personam to enforce a claim

to which this section applies whenever any of the conditions

specified, in clauses (a) and (b) of sub-sections (2) and (3), are

satisfied and where applicable, the rules of the court relating to the

service of process outside the jurisdiction shall apply.

910. Notwithstanding anything contained in section 5, it shall be

open to the court in its discretion, at any stage of the proceedings to

treat proceedings in rem or in personam, either in whole or in part,

and to grant such reliefs and make such directions and orders

(including amendments to the pleadings) as it may consider

appropriate and just.

Directions by

Court.

101. On the sale of a ship by the court in exercise of its admiralty

jurisdiction, the vessel shall vest in the purchaser free from all

encumbrances.

Vesting of

rights on sale

of vessels

11. (1) In an action in rem, where the court has ordered the

property proceeded against to be sold-

(a) a notice in the manner provided in sub-section (2) shall

be given by the court; and

(b) any party which obtains a decree or order against the said

property may claim such reliefs as are provided in sub-section (3).

(2) For the purposes of clause (a) of sub-section (1), a notice

shall be given in one international and one national newspaper as the

court may specify containing following particulars, namely:-

(a) number of the action;

(b) names of the parties to an action;

(c) gross sale proceeds; and

(d) the order of priority of the claim to the sale proceeds.

(3) Any party referred to in clause (b) of sub-section (1) may

apply to the court by a notice of motion for an order determining the

order of priority of the claims against the proceeds of the sale of the

property.

(4) The court shall determine order of priority of the claim to

the sale proceeds on expiration of period of ninety days from the

publication of notice under sub-section (2):

Distribution of

sale proceeds

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Provided that any party having a claim to the property or the

proceeds of sale thereof may apply to the court before the expiry of

period of ninety days for leave to intervene and prove claims by

filing an action before it or by filing a suit before any other

appropriate court before the expiration of that period.

(5) The court may extend period of ninety days on the

application of any party which has instituted proceedings before any

other court as provided in sub-section (4) or before the court of

competent jurisdiction in India for obtaining a decree against the

property or proceeds of sale and the said court shall not disburse the

sale proceeds or determine priority until thirty days after the disposal

of the said suit or action and any appeal therefrom.

(6) Notwithstanding the provisions contained in sub-section

(3) above, the court may determine priority among the parties and

direct payment out of the sale proceeds on an application by any

party which has obtained a decree or order against the vessel or its

property if the court is of the opinion that the claim of the applicant is

entitled to priority over the claim in respect of which a suit or action

has been instituted.

Provided that the court shall give an opportunity of hearing

to all parties which may have made claims and filed suit or action

against the property or sale proceeds within the specified period of

ninety days or such other period which may be extended by the court

before determining priority and directing disbursement out of the sale

proceeds.

12.-(1) Where in an action in rem against a vessel the court has

ordered the vessel to be sold, any party who has obtained or obtains

judgment against the vessel or proceeds of sale of the vessel may-

a) in a case where the order for sale contains the further order

referred to in paragraph (2), after the expiration after period specified

in the order under paragraph (2) (a);

or

b) in any other case, after obtaining judgment,

apply to the Court by summons for an order determining the order of

priority of the claims against the proceeds of sale of the vessel.

(2) Where in an action in rem against a vessel the court orders the

vessel to be sold, it may further order-

(a) that the order of priority of the claims against the proceeds of sale

of the vessel shall not be determined until after the expiration of 90

days, or of such other period as the court may specify, beginning with

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the day on which the proceeds of sale are paid into court;

(b) that any party to the action or to any other action in rem against

the vessel or the proceeds of sale thereof may apply to the court in the

action to which he is a party to extend the period specified in the

order;

(c) that within 7 days after the date of payment into court of the

proceeds of sale the sheriff shall send for publication in the Gazette

and such newspaper or publication, if any, as the court may direct, a

notice complying with paragraph (3).

(3) the notice referred to in paragraph (2) (c) must state –

(a) that the vessel (naming her) has been sold by order of the court in

an action in rem, identifying the action;

(b) that the gross proceeds of the sale, specifying the amount thereof,

have been paid into court;

(c) that the order of priority of the claims against the said proceeds

will not be determine until after the expiration of the period

(specifying it) specified in the order for sale; and

(d) that any person with a claim against the vessel or the proceeds of

sale thereof, on which he intends to proceed to judgment should do so

before the expiration of that period.

(4) The Sheriff must lodge in the Registry a copy of each newspaper

or publication in which the notice referred to in paragraph (2) (c)

appeared.

(5) The expenses incurred by the Sheriff in complying with an order

of the court under this Rule shall be included in his expenses relating

to the sale of the vessel.

(6) The court shall determine order priority of the claim to the sale

proceeds on expiration of period of ninety days from the publication

of notice under sub-section (3):

Provided that any party having a claim to the property or the proceeds

of sale thereof may apply to the court before the expiry of period of

ninety days for leave to intervene and prove claims by filing an action

before it or by filing a suit before any other appropriate court before

the expiration of that period.

(7) The court may extend period of ninety days on the application of

any party which has instituted proceedings before any other court as

provided in sub-section (4) or before the court of competent

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jurisdiction in India for obtaining a decree against the property or

proceeds of sale and the said court shall not disburse the sale

proceeds or determine priority until thirty days after the disposal of

the said suit or action and any appeal therefrom.

(8) Notwithstanding the provisions contain in sub-section (3) above,

the court may determine priority among the parties and direct

payment out of the sale proceeds on an application by any party

which has obtained a decree or order against the vessel or its property

if the court is of the opinion that the claim of the applicant is entitled

to priority over the claim in respect of which a suit or action has been

instituted.

Provided that the court shall give an opportunity of hearing to all

parties which may have made claims and filed suit or action against

the property or sale proceeds within the specified period of ninety

days or such other period which may be extended by the court before

determining priority and directing disbursement out of the sale

proceeds.

123. (1) The order of claims determining inter se priority in an

admiralty proceeding shall be as follows:-

(a) a claim on any vessel or its property including bunker

where there is a maritime lien and action is proceeded against

ship or its property;

(b) mortgages and charges on a vessel or its property where

an action is proceeded against vessel or its property;

(c) all other claims.

(2) The priority among the claims inter se with respect of

clause (a) of sub-section (1) shall be as follows:-

(a) claims for wages of crew member of the salvaged ship,

and claims for salvage of life, vessel or its property provided that

salvage of life shall take priority over other salvages;

(b) wages and other sums due to the master or members of

crew of the vessel in respect of their employment on the ship;

(c) (i) claims in respect of loss of life or personal injury

having a direct connection with the operation of the vessel or

in and out of his course of employment;

(ii) claims for contribution for general average;

(iii) claims based on tort arising out of physical damage

Order of

priority of

claims.

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caused by the operation of the vessel other than loss or

damage to cargo containers and passengers’ effects carried

on the vessel;

(iv) claims out of bottomry;

(d) port, canal and other waterway dues and pilotage dues.

(3) The following principles shall apply in determining the

priority of claims inter se –

a) prior claims shall exclude subsequent ones;

b) if there are more claims than one in any category of priority,

they shall rank pari passu;

c) claims for various salvages shall rank in inverse order of time

when the claims secured thereto accrue;

d) claims for salvage, and wages and claims in the nature of

general average shall take priority over all other claims

mentioned in clause (c) of sub-section (2) notwithstanding the

fact that the claims arose earlier.

143. (1) Each of the following claims against the owner, demise

charterer, manager or operator of the vessel shall be secured by a

maritime lien on the vessel, namely:-

(a) claims for wages and other sums due to the master,

officers and other members of the vessel’s complement in

respect of their employment on the vessel, including costs of

repatriation and social insurance contributions payable on their

behalf;

(b) claims in respect of loss of life or personal injury

occurring, whether on land or on water, in direct connection with

the operation of the vessel;

(c) claims for reward for the salvage of the vessel;

(d) claims for port, canal, and other waterway dues and

pilotage dues;

(e) claims based on tort arising out of physical loss or

damage caused by the operation of the vessel other than loss or

damage to cargo, containers and passengers’ effect carried on the

vessel;

(2) No maritime lien shall attach to a vessel to secure a claim

Maritime lien

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which arises out of or results from-

(a) damage in connection with the carriage of oil or other

hazardous or noxious substances by sea for which

compensation is payable to the claimants pursuant to an

international convention providing for strict liability,

compulsory insurance or any other means of securing such

claim;

(b) the radio-active properties or a combination of radio-

active properties with toxic, explosive or other hazardous

properties or nuclear fuel or radio-active products or waste.

(3) The maritime liens set out in sub-section (1) shall be

extinguished after expiry of a period of one year unless, prior to the expiry of such arrest or seizure leading to a forced sale.

(4) The period of one-year referred to in sub-section (3) shall

commence-

(a) in relation to the maritime lien under clause (a) of sub-section (1), upon the claimant’s discharge from the vessel;

(b) in relation to the maritime liens under clauses (b) to (e) of

sub-section (1), when the claims secured thereby arise. and shall not be subject to suspension or interruption:

Provided that time shall not run during the period that the

arrest or seizure of the vessel is not permitted by law.

Explanation.-‘Nothing in this Section shall prevent or bar

any claimant’ from initiating any action in personam where such

claim is not otherwise barred by the Limitation Act 1963.

?

14. (1) In all actions under this Act, the nationality of the vessel

proceeded against shall be stated in the plaint, and if the vessel is a

foreign vessel, notice or institution of the suit shall be given to the

Consulate of the State to which the vessel belongs.

(2) A statement of service of such notice or a statement that

there is no such Consulate in the City, shall be made in the affidavit

in support of any application for arrest of the vessel.

(3) If a notice is served on the Consulate, a copy of the said

notice shall be annexed to the affidavit.

(4) For the purposes this section, it shall be sufficient

service of notice if it is served on a Consul or any other officer in the

Consulate.

Procedure in

respect of

foreign ships.

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1545. (1) The Court may, as a condition of arrest of a vessel, or

for permitting an arrest already effected to be maintained, impose

upon the claimant who seeks to arrest or who has procured the arrest

of the vessel an obligation to provide such security and upon such

terms as may determine, for any loss or damage which may be

incurred by the defendant as a result of the arrest, and for which the

claimant may be found liable, including but not restricted to the

following, namely:-

(a) the arrest having been wrongful or unjustified; or

(b) excessive security having been demanded and provided.

(2) Where pursuant to sub-section (1), the security has been

provided, the person providing such security may at any time apply to

the Court to have the security reduced (increased), modified or

cancelled.

Protection of

owner, demise

charterer,

manager or

operator of

ships arrested.

CHAPTER III

PROCEDURE AND APPEALS

5 of 1908.

1656. (1) The provisions of the Code of Civil Procedure, 1908

shall apply in all the proceedings before the court in so far as they are

not inconsistent with or contrary to the provisions of this Act or the

rules made there under.

(2) The admiralty court shall have all the powers of a civil

court in dealing with any application before it and of passing such

interim and other orders as it may consider necessary and appropriate

to protect the interests of the parties before it.

Code of Civil

Procedure to

apply.

5 of 1908

1767. (1) In pursuance of the provisions of section 140 of the

Code of Civil Procedure, 1908, the Central Government shall appoint

and publish in the Official Gazette a list of assessors with such

qualifications or experience in admiralty and maritime matters as may

be prescribed.

(2) The appointment of assessors shall not be construed as a

bar to the examination of expert witnesses by any of the parties in any

admiralty proceeding.

(3) The Central Government may prescribe the qualifications

for assessors, the nature of duties to be performed by them and the

fees to be paid, to them and other ancillary and incidental matters.

Assistance of

assessors.

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18. Notwithstanding anything contained in the provisions of any

other law, it shall be open to the High Court in admiralty proceedings

to refer, with the written consent of the parties, the entire dispute

before it or such questions of law or fact raised thereby as the court

may consider necessary, to arbitration and dispose of the dispute or

the questions, as the case may be, in conformity with the award

unless modified by the court for reasons to be recorded in writing.

Reference to

arbitration

19. An appeal shall lie from any judgement, decree or final order

or interim order of a Single Judge of the High Court or any other

court exercising admiralty jurisdiction under this Chapter to a

Division Bench of the High Court.

Appeal.

CHAPTER IV

MISCELLANEOUS

20. (1) The Central Government may, by notification in the

Official Gazette, make rules for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of

the foregoing power, the Central Government may regulate by rules,

the practice and procedure of admiralty jurisdiction under this Act

including fees, costs and expenses in such proceedings.

(3) Until rules are made under sub-section (2) by the Central

Government, the existing rules governing the exercise of admiralty

jurisdiction in the High Courts shall be applicable.

(4) Every rule made, or notification issued, under this Act

shall be laid as soon as may be after the rule is made or notification

issued before each House of Parliament, while it is in session for a

total period of thirty days comprised in one session or in two or more

successive sessions and if, before the expiry of the session

immediately following the session or the successive sessions

aforesaid both Houses agree in making any modification in the rule or

notification or both Houses agree that the rule or notification should

not be made or issued, that rule or notification shall thereafter have

effect, only in such modified from or be of no effect, as the case may

be, so however, that any such modification or annulment shall be

without prejudice to the validity of anything previously done under

that rule or notification.

Power to make

rules.

12 & 13 Vict.

c.96.

23 & 24 Vict.

c.88.

21. (1) The following enactments are hereby repealed-

(a) the Admiralty Court Act, 1840;

(b) the Admiralty Offences (Colonial) Act, 1849;

(c) the Admiralty Offences Jurisdiction (India) Act, 1860;

Repeal and

savings.

of 21

24 & 25 Vict.

c.10.

16 of 1891

(d) the Admiralty Court Act, 1861;

(e) the Colonial Courts of Admiralty Act, 1890

(f) the Colonial Courts of Admiralty (India) Act, 1891

(g) the provisions of Letters Patents, 1865 in so far they

apply to the Admiralty Jurisdiction of the Bombay, Calcutta

and Madras High Courts.

(2) Notwithstanding anything contained in of any other law

for the time being in force, High Courts shall not exercise any

jurisdiction in Admiralty save and except as provided under this Act

and all admiralty jurisdiction hence-before enjoined on the High

Courts are hereby repealed.

(3) Notwithstanding the repeal under sub-section (1) or sub-

section (2)-

(a) anything done or any action taken, under the provision

of the repealed enactments, shall in so far as such thing or

action is not inconsistent with the provisions of this Act, be

deemed to have been done or taken under the corresponding

provisions of the Act as if the said provisions were in force

when such thing was done or such action was taken and shall

continue to be in force accordingly until superseded by

anything done or any action taken under this Act or rules

made thereunder;

(b) any rule, regulation, by-law made or order or notice

issued under the repealed enactments, shall so far as it is not

inconsistent with the provisions of this Act or rules made

thereunder be deemed to have been done or taken under the

corresponding of this Act.

22. (1) If any difficulty arises in giving effect to the provisions

of this Act, the Central Government may, by order published in the

Official Gazette, make such provisions, not inconsistent with the

provisions of this Act as may appear to it to be necessary for

removing the difficulty.

Provided that no such order shall be made after the expiry of a

period of two years from the commencement of this Act.

(2) Every order made under this section shall be laid, as soon

as may be after it is made before each House of Parliament.

----------------------------------

Power to

remove

difficulties.

DIRECTORATE GENERAL OF SHIPPING ““““ FLOOR stakeholders on 04.12.12 in the Directorate...

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