Case: MV "Elizabeth" (AIR 1993 SC 1014)
Outcome: discussed
evidence on Indian law was given by Ananjan Mitter, whose practise substantially involved Indian maritime law, including litigation over the arrest of vessels. Mr Mitter said that although India had not acceded to the International Convention on the Arrest of Ships 1999 ( the 1999 Arrest Convention ), it was recognised as part of the common law of India. He referred to an appellate decision MV "Sea Success I" v Liverpool and London Steamship Protection and Indemnity Association Ltd (AIR 2002 Bombay 151 at [18]-[19], [26]) which in turn cited from a decision of the Supreme Court of India that expressed this view of the common law of that nation: MV "Elizabeth" (AIR 1993 SC 1014) at [65] and [89]. Mr Mitter relied on the provisions of Art 3(2) of the 1999 Arrest Convention which provides: "2. Arrest is also permissible of any other ship or ships which, when the arrest is effected, is or are owned by the person who is liable for the maritime claim and who was, when the claim arose: (a) owner of the ship in respect of which the maritime claim arose; or (b) demise charterer, time charterer or voyage charterer of that ship. This provision does not apply to claims in respect of ownership or possession of a ship." Mr Mitter had not found any Indian judicial interpretation of s 25(c) and (d) of the Indian Act. He explained that in such situations it was usual to consider English law on similar issues. He opined that the effect of s 3(23) that the effect, under Indian law, of s 3(23) was that a person was the owner, for the purposes of enlivening jurisdiction in India to arrest a ship, if he was registered under s 25 as owner of a share, even if there were other registered shareholders. He said that the consequence of this construction of the Indian Act was that a person would be found to be the owner so as to permit a vessel to be arrested in India even if he held only one of the 10 registered shares. Mr Mitter expressed the opinion that neither West Asia nor Four M could sell separately the respective nine shares or one share that they held, no doubt because of s 25(d) of the Indian Act. But he said that the effect of s 3(23) was that under Indian law West Asia was the owner of the " Gem of Safaga " and it could be arrested in India as security for maritime claims that had arisen against West Asia irrespective of the fact that West Asia jointly owned the ship with Four M. In MV "Sea Success I " (AIR 2002 Bombay) at 184 [56] the Court held that it would follow the broad international legal consensus that the test for beneficial ownership of the shares in a ship was whether the person had a right "... to sell, dispose of or alienate the shares in the ship". The Court also refused to lift the corporate veil between parent and subsidiary companies: MV "Sea Success I" (AIR 2002 Bombay) at 181-182 [54]. Earlier, the Court quoted a passage from the reasons of the Supreme Court of India in MV "Elisabeth" (AIR 1993 SC 1014) at [64]-[65] that recognised the procedural theory of Admiralty jurisdiction in India: i.e. the action in rem overcame the difficulty of personal service on a relevant person and either compelled him to appear to furnish security for release of the res or, in default of appearance, to proceed directly against the res . Although I need not finally decide this issue, I incline to the opinion that the reasoning to which I have referred in MV "Sea Success I" (AIR 2002 Bombay), especially, at 182-183 [55]-[56] and the quotation from MV "Elisabeth" (AIR 1993 SC 1014) at [64]-[65] in (AIR 2002 Bombay) at 163-164 [18]) align the unwritten Indian maritime law with the internationally accepted concepts of the degree of beneficial ownership to justify arrest of a vessel namely that the owner must have, at least, the beneficial right to sell or dispose, not of shares in the ship, but the ship itself. I am not persuaded that Indian law would regard West Asia as having that right merely because of the definition of "owner" in s 3(23) of the Indian Act.