Case: World Tanker Carrier Corpn Vs. Snp Shipping Services Pvt Ltd

World Tanker Carrier Corporation (hereinafter referred to as the WTCC ) is the appellant in these appeals. WTCC is a foreign company registered in Monrovia, Liberia. It is the owner of a vessel m.t. "New World". The vessel is registered in Hong Kong. On 21st of December, 1994, New World was involved in a collision with a vessel m.v. "YA Mawlaya" international waters 200 nautical miles off the coast of Portugal. YA Mawlaya is a vessel registered in Cyprus. It is owned by M/S. Kara Mara Shipping Company Ltd. (hereinafter referred to as "Kara Mara), a company registered in Cyprus. The said company is referred to variously in these proceedings as disponent owner/charterer of ya Mawlaya to Vestman Shipping Company Ltd., a company registered in Cyprus. Kara Mara thereafter became bare boat charterers of Ya Mawlaya. Prior to the sale of the said vessel, kara mara had entered into a management agreement dated 11th of April , 1994 with SNP Shipping Ser vices P. Ltd. (hereinafter referred to as SNP), a company registered in India for the management of the vessel Ya Mawlaya. According to the appellant, on the sale of the said vessel, Kara Maras agreement with SNP came to an end. On the other hand, it is claimed by SNP that under the said management agreement they were put in charge of recruiting crew and officers of the said vessel. SNP entered into a sub-contract with one Holbud Ship Management Company Ltd. for the commercial management of t he said vessel, under this agreement, Holbud Ship Management Company Ltd. were in charge of booking cargo and collection of freight in respect of the said vessel Holbud Ship Management Company is a company registered in the United Kingdom. Its holding company Holbud ltd. is also a company registered in England. thus in respect of the vessel Ya Mawlaya which is a foreign vessel registered in Cyprus, all persons and/or companies claiming ownership rights either as owners or as charterers, managers or sub-managers are foreign companies save and except SNP which is a company registered in Bombay, India. The vessel New World with which it collided and its owners are also foreigners/foreign companies.As a result of the collision which took place between New World and Ya Mawlaya off the coast of Portugal on 21st of December, 1994, eight crew members of the vessel New World died. There were injuries to some of the crew members was damage to both the vessels. There was also damage to the cargo . At the time of collision Ya Mawlaya was carrying a cargo of soyabeans belonging to the Italian firm of Cereol Italia SRL which had been loaded on the vessel in new Orleans, United States of America, new Orleans was the last port of call of Ya Mawlaya before the collision. On 3rd January, 1995 Kara Mara took proceedings in Lisbon, Portugal in which New World was arrested. It was released on a letter of guarantee for US $ 10, 073, 000 by WTCCs P &I Club Britannia on 18th January,30th on December, 1994 and 31st of January. 1995, several proceedings were adopted by various claimants against the owners of Ya Mawlaya in the District Court of New Orleans, Lousiana, united States of America. These included an action by WTCC for recovery of damage for damage to their ship New World. Cereol also filed a civil action against both the vessels and against the owners of both the vessels for damage to their cargo. The legal heirs of some of the crew members who died in the collision also filed civil actions for various amounts. The appellant WTCC, between January 17 and 20, 1995 get two sister vessels of Ya Mawlaya, Ya Latf and Ya Jaleel arrested in the action brought by the appellant in the United States of America. These vessels were pleased on the issue of a letter of undertaking for U.S. $ 20 Million by P &I Club of Kara Mara and SNP the New Castle Protection and Indemnity Association, (hereinafter referred to as NewMara thereafter filed an action for limitation of liability in the Supreme Court of Hong Kong against WTCC and all possible claimants. The court at Hong Kong has, however, stayed the writ in Hong Kong on the ground of Hong Kong being a forum non conveniens by an order dated 6th September, 1995. Kara Mara also made a conditional application for limitation of its liability before the District court at New Orleans. Kara Mara an d all Ya Mawlaya interests have filed a common defence, inter alia, pleading that the court at new Orleans lacks ground of forum non conveniens. This issue is under examination there.During the pendency of all these proceedings, on 12th of May, 1995, SNP filed Admiralty Suit No. 26 of 1995 in the Bombay High Court. The suit which has been filed in the admiralty jurisdiction of the Bombay High Court is for limitation of SNPs liability in respect of the said collision. Prayer s (a) to (e) in the Admiralty Suit No. 26 of 1995 pertain to setting up of a limitation fund and other connected reliefs. Prayer (f) is for an indemnity from Kara Mara, Vestman Shipping Company Ltd. and WTCC, in respect of all claims against SNP relating to the collision, Interim reliefs prayed for in prayers (h) and (i) are to restrain those defendants who have instituted suits in the U.S. courts or elsewhere from, in any manner proceeding with the pre-trial proceedings or hearing of the complaints/civil action instituted by them in the U.S. Courts or elsewhere (anti-suitthe only plaintiff in the Admiralty Suit No. 26 of 1995 was SNP. Subsequently, Holbud Ship management ltd., HOlbud Ltd., H. Merali and Shaukat Merali, Directors of Holbud ship Management Ltd. have got themselves transposed as plaintiffs 2 to15/16th of November, 1995, much after the filing of Admiralty Suit No. 26 of 1995, the vessel Ya Mawlaya was brought to the port of Bombay under ballast. On the application of SNP in the Bombay High Court, the vessel was arrested on 17th of November, 1995 in the said suit. In January/February, 1996, three other admiralty suits were filed by the Second officer, the Third Officer and the Chief chief Engineer of Ya Mawlaya in respect of their claim for wages and loss of future wages. The vessel Ya Mawlaya has been arrested in these three suits also. One Galaxy Multimodal ltd. filed an application in the pending admiralty suit on SNP for the a fresh arrest of the same vessel on the ground of non-payment for supply of neceassities. And in that application also the ship has been arrested.On 22nd of March, 1996 Kara Mara mara filed Admiralty Suit No. 28 of 1996 seeking limitation of their liability and setting up of a limitation fund in respect of their liability arising from the collision of Ya Mawlaya with New World. Although WTCC did not appeal in the two admiralty suite initially, it has now appeared under protest to contest the issue of jurisdiction of law Bombay High Court to entertain those admiralty suits to be tried as a preliminary issue on athe two admiralty suits, the Bombay High Court has also granted anti-suit injunctions against WTCC restraining it from proceeding with its claims in the Court at New Orleans in the State of Lousiana, U.S.A contempt proceedings were taken out for breached of the orders passed by the Bombay High Court in the connection. By an order of a learned single judge of the High Court in the contempt proceedings the defence of WTCC was ordered to the struck off. We are not referring to these proceedings in detail because of what has subsequently transpired on appeal before the Division Bench. On the question of the jurisdiction, the Single Judges held that the court has jurisdiction. From both these orders appeals were filed before a Division Bench of the Bombay High Court. The Division Bench, by its order dated 20/21st of August, 1997 in Appeal No. 556 of 1997, after considering the recalcitrant conduct of WTCC and the contempt committed by it, ultimately held that WTCC car be given one more chance to appear and defend the proceedings on condition that in future in complies with all the orders of the court. On the question of jurisdiction, the Division Bench by a Separate order of 21.8.1997 held that the court had jurisdiction to entertain an d try the suits. Civil Appeal No. 8534 of 1997 filed before us by WTCC is against the order of 21.8.1997 holding that the Bombay High Court has Jurisdiction to entertain and try the suit. Civil Appeal No. 8535 of 1997 is from the order dated 20 /21./.1997 in contempt proceedings.Kara Mara and SNP also filed motions to compel WTCC to deposit in India US $ 15 million said to be received by WTCC from New Castle in settlement of its claim. According to WTCC, this amount was held in escrow by leasers. Haight Gardner Holland and Knight under certain arraignments, and until further orders of the Bombay High Court. The High Court, by its order dated 21.11.1997 in appeal in these motions taken out in Admiralty Suit No. 28 of 1996, has passed an order directing WTCC to deposit in the Bombay High Court a sum of US $ 12.3 million and interest accrued thereon to secure compliance by WTCC of orders of the Bombay High Court. Civil Appeal No. 8536 of 1997 has been filed by WTCC against this order of 21st of November,High Court has passed a further order dated 4.12.1997 in Admiralty suit No- 26 of 1996 as also as Admiralty suit No. 28 of 1996. Posting these suits for experts hearing in January, 1998 . Civil Appeals arising out of S.L.P.(c) Nos. -3 and 4 of 1998 have teen filed against these orders. By interim orders in these S.L.P.S the ex parts hearing of the two suits has been stayed.

Court's reasoning:
Admiralty Suit no. 26 of 1995 is filed by SNP, a company registered in India, claiming to be the managers of the vessel Ya Mawlaya and hence falling within the definition of owner under Section 352F. Others who are subsequently, transposed as plaintiffs are foreign companies or foreigners. The claimants are some of the defendants. They are all foreigners. Other defendants are other owners, all of whom are foreigners or foreign companies. None of the claimants in respect of whose claims a limitation fund is sought to be set up, is within the jurisdiction of the Bombay High Court; nor do they carry on business within the jurisdiction of the Bombay High Court, nor have they filed claims before it in respect of the occurrence in question or have submitted to the jurisdiction of the Court. some claims in respect of Ya Malaya have been lodged, no doubt, in the Bombay High Court by SNP. itself, and by some crew members of Ya Mawlaya and others. But these claims do not fall within Section 352A and are not capable of being limited. There is also no likelihood of any claim being filedhere since all claims are already filed before the courts in the U.S.A. The Bombay High Court has, therefore, no jurisdiction in respect of Admiralty suit No. 26 of 1995. There is also misjoinder of causes of action in the suit looking to the prayers in the suit. But we need not examine this aspect since in any event the Bombay High Court has no jurisdiction to entertain the limitation action. Of course, in theory, if in future any liability action is at all filed there which is capable of limitation, SNP would be entitled to set up limitation as a defence or file an independent limitation action. But the present suit is without jurisdiction.SNP has claimed that the Bombay High Court has jurisdiction because a part of the cause of action has arisen within its jurisdiction. SNP, under its management agreement with Kara Mara, claims to have recruited the crew of the vessel Ya Mawlaya in Bombay. since the owner is required to establish "no fault or privity" on his part in respect of the "occurrence", one of the relevant factors for this purpose is recruitment by the owner of a competent crew. Since recruitment was in Bombay, SNP claims that a part of the cause of action has arisen in Bombay. Therefore, SNP contends that the Bombay High Court has jurisdiction. However, in view of what we have held above, this does not confer jurisdiction on the High Court in an admiralty action of the presentthe present case the collision which gave rise to the owners liability has occurred on the high-seas off the coast of Portugal. Neither of the vessel involved in the collision is an Indian vessel. The owners of both these vessels are also foreigners. The charterers and sub-managers are also foreign companies. Only one out of several managers/sub-managers of Ya Mawlaya in and Indian Company. And the only act of management in Bombay is said to be the recruitment of the crew. For reasons already stated, this factor alone will not conferwhen the right to set up a limitation fund is a right which is common to all persons coming within the category of "owner" under Section 352F and a common limitation fund has to be set up, an act of management only by one of the "owners" when all the other owners are outside the jurisdiction of the Bombay High Court and all their acts are outside the jurisdiction of the Bombay High Court, will not be sufficient to confer jurisdiction. It is difficult to consider the Bombay High Court as the domiciliary court of the owners of Ya Mawlaya when the persons/companies to whom the vessel belongs are domiciled outside India and out of the entire body of persons/companies falling within the term "owner" under Section 352F, only one manager is an Indian company, and the vessel is registered in a foreign country.The entire course of conduct appears to be a deliberate attempt on the part of the plaintiffs to bring the limitation action in Bombay with a view to obtain anti-suit injunctions against all the claimants who have filed proceedings against the owners and Yamawlaya in the Courts of the United States prior to the filing of the admiralty suit here. The Bombay High Court, therefore, ought not to have entertained Admiralty Suit No. 26 of 1995 brought by SNP and othertherefore, allow Civil Appeal No.s 8535 of 1997 an d 8536 of 1997 to the extent of setting aside the impugned order of 21.11.1997. The order dated 20/21-08-97 has now become infructuous and hence no further orders are necessary in that connection. We however, make it clear that it the respondent s or any of theme have any right to proceed against New Castle or the appellant in respect of the said sum of US $ 15 millions paid by New Castle to the appellant and held in escrow as stated earlier, the respondents or any of them shall be free to adopt appropriate proceedings in that connection in accordance with law.