INTRODUCTION

Independent India saw its first codified legislation dealing with Admiralty law on 1st April
2018 with the enforcement of Admiralty (Jurisdiction and Settlement of Maritime Claims)
Act, 2017 (“Act”). The said Act was enacted in an attempt to modernize Indian admiralty law
and align it with the Arrest Conventions. The Act is well intentioned but suffers from errors
and omissions. Indian law makers also set out certain provisions in the Act that were apart
from the provisions that were set out in the Arrest Conventions. The deviation from the
conventions have given light to host of different interpretations given by the different High
Courts in India that exercise Admiralty Jurisdiction. One such recent Judgment that has re-
shaped the Admiralty law in India is discussed hereunder.

SIEM OFFSHORE REDRI Vs. ALTUS UBER

A Single Judge of the Bombay High Court in a recent judgement viz, Siem Offshore Redri v.
Altus Uber1 held that a claimant could arrest a ship in India as security for its claim in
arbitration without having to submit to a merit hearing in India. The court upheld the arrest of
a demise-chartered ship for a claim against another ship that was bare boat chartered by the
demise charterer.

THE DISPUTE:

The Claimant i.e. Siem Offshore Redri entered into a bareboat charter party with Marine
Engineering Diving Services (“MEDS/ Defendant”) for a vessel called Siem Marlin. MEDS
allegedly breached the demise charter. The Claimant commenced arbitration in London for
recovery of its claim against MEDS with respect to the bareboat charter party. The
Claimant’s claim arose out of inter alia unpaid charter hire under the charter party. Pending
determination of the arbitral proceedings in London, the claimant sought and obtained an ex-
parte arrest of a vessel Altus Uber in India on the ground that MEDS (Defendant) was either
the owner or demise charterer of both vessels. The Defendant entered appearance under
protest in the Bombay High Court and contended that the Act was very clear from its
provisions that the arrest of a vessel in aid of obtaining security for an arbitration was
impermissible i.e. that security pending arbitration was by itself not a maritime claim under
the Act. The Defendant also contended that Claimant cannot secure its claim in Arbitration
by filing an Admiralty Suit and obtaining an order of arrest as the Arbitration proceedings
have already commenced in London and therefore the Claimant must take necessary steps for
1
[2018 SCC OnLine Bom 2730]
securing the claim under the English Arbitration Act and therefore filed a vacating
application before the Ld. Single Judge of the Bombay High Court. Contentions of Parties:
The primary argument of the Defendant was that the claimant filed the suit only for obtaining
security until the enforcement of the arbitral award and the defendant relied upon the full
bench judgment of the Apex Court in Bharat Aluminium Co v Kaiser Technical Services Inc
(BALCO) and upon Rushab Ship International LLC v Bunkers on board Ship MV Eagle and
Freight.it was the defendants contention that the Admiralty (Jurisdiction and Settlement of
Maritime Claims) Act 2017 (the Admiralty Act) does not provide for security in foreign
arbitrations. Although Art 7 of the Arrest Convention 1999 permits such a claim, the
Admiralty Act does not include a provision similar to Art 7. The Claimant argued that, as the
arbitration was an action in personam against the Defendants and the admiralty suit was an
action in rem, both actions were maintainable and that art 7 of the Arrest Convention 1999
provides for a situation where arbitration proceedings have commenced and an action in rem
is permitted to obtain security pending arbitration. Although the Admiralty Act does not have
a similar provision, it nevertheless does not bar the provisions of the Arrest Convention 1999
being applied. The Claimant placed reliance upon JS Ocean Liner LLC v MV Golden
Progress (Golden Progress) the full bench of the High Court held that, where there is no
explicit legislation providing that an action in rem may be used to obtain and retain security,
even though the merits of the dispute are to be determined in arbitration proceedings, art 7 of
the Arrest Convention 1999 may be applied to advance the cause of justice.

COURTS’ DECISION: The question before the Ld. Single Judge of the Bombay High Court
was whether the court can order arrest of a vessel to secure a maritime claim where the
disputes have been referred to arbitration. The Ld. Single Judge held that such an in-rem
action for a claimant to obtain a security arrest in India is permissible in law and would not
amount to abuse of process. And that whilst the Act was silent and did not expressly make
provision for this, it did not prohibit an order for security pending arbitration. The Court held
that, in personam and in rem proceedings, can be pursued parallelly and not alternatively. An
in personam proceeding does not bar initiation of an action in rem. The Court ruled that a
claimant had a statutory right to initiate in rem proceedings under the Act that could not be
denied to a claimant who otherwise had a valid maritime claim. The court relying on the full
bench in Golden Progress, devised a procedure in consistence with Article VII of the 1999
Arrest Convention and stated that, “Following the arrest of a vessel in an action in rem, in the
event the disputes are to be arbitrated (whether the arbitration has commenced or is yet to be
commenced), once the retention of security method as devised by the Full Bench is adopted,
the suit is required to be stayed and the security retained for the benefit of the arbitration and
the final award that may be passed. The successful Claimant who obtains an award would
then have to satisfy the High Court that the award is enforceable under the provisions of the
Arbitration Act, 1996. Once the award is declared enforceable then the security retained by
the High Court pursuant to the action in rem will be made available to the Claimant in
satisfaction of the judgment of the High Court declaring the award enforceable as a decree of
the High Court.” Under Article 3 (2) of the Arrest Convention, a ship (other than the demise-
chartered ship) that is owned by a demise charterer can be arrested for claims against the
demise charterer. But any other ship that is demise chartered by the demise charterer, is
immune from arrest. The philosophy of this provision is to ensure that only the asset of the
debtor can be seized and not that of a third party. With regards to the arrest of a non-
offending vessel on demise charter. The Ld. Single Judge while construing section 5 of the
Act (which departs slightly in wording from Article 3 of the Arrest Convention), gave a very
wide ambit to its interpretation and upheld the arrest of Altus Uber which was another vessel
demise chartered by MEDS. It is relevant to note that the interpretation of section 5 of the Act
proceeds on a demurrer that the Vessel Altus Uber was not owned by MEDS but was
bareboat chartered to it. The said Judgment of the Ld. Single Judge of the Bombay High
Court exposes vessel owner to arrests of their vessels for claims against their bareboat
charters irrespective of whether their vessel was the offending vessel or not. The order of the
Ld. Single Judge was challenged before the Division bench of the Bombay High Court and
the Division bench has recently upheld the order passed by the Ld. Single Judge. To
summarise, the Bombay High Court ruling presents interesting opportunities for the claimant
to secure its claim whilst opting for Arbitration in a foreign land.

J.S. OCEAN LINER LLC V M.V. GOLDEN PROGRESS AND ANOTHER.

The Plaintiffs were a Dubai based company and time charterers of the “Golden Progress”.
The “Golden Progress” was chartered to the plaintiffs on Baltime 1939 form on period
charter. Disputes arose between the charterers and the owners with regard to alleged breaches
by the owners of the speed and bunker consumption warranties contained in the charterparty.
The charterparty contained the standard Baltime arbitration clause, making the disputes
arbitrable in London and subject to English Law. Shortly after the expiry of the charter
period and redelivery of the vessel to the owners at Mumbai, charterers commenced in rem
proceedings against the “Golden Progress” and her owners and obtained a warrant of arrest of
the vessel. The proceedings were filed to secure charterers’ claim for the amount due at the
foot of their final hire statement. When the charterers arrested the “Golden Progress” the
arbitration clause of the charterparty was not invoked. The owners, after obtaining release of
the vessel by furnishing cash security in the Court, took out a motion seeking that the parties
be directed to refer their disputes to arbitration in London and the suit in the meantime be
unconditionally stayed. The dispute was initially assigned to a single judge. However, in light
of conflicting Division Bench judgments on the legal issues raised, the judge directed the
proceedings to be placed before the Chief Justice for constitution of a larger Bench. The two
conflicting decisions were the “Mehrab”2 and the “IndurvaValley”3. In the “Mehrab” the
single Judge’s refusal to grant an order for arrest of the vessel to secure a future arbitration
award was overturned by the Division Bench; which held that the Court in its Admiralty
Jurisdiction had the power to arrest a vessel to secure a claim in pending or future arbitration
proceedings. As against this, the Division Bench in the “IndurvaValley” held that a suit in
Admiralty Jurisdiction for securing a claim in arbitration was not maintainable. The only
remedy available to the claimant was to make an application for interim relief under section 9
of Arbitration and Conciliation Act 1996. The reasoning was that the Arbitration and
Conciliation Act 1996 was a complete code and section 5 of the Act provided that in matters
governed by Part 1 no judicial authority could intervene except where so provided in that
Part. In light of these conflicting decisions the dispute was referred to a three-person bench
for consideration of the following questions of law:

(a) Whether an application under section 9 of the Arbitration and Conciliation Act 1996
(Indian) was maintainable for arrest of a vessel for obtaining security for an award
that may be made in arbitration proceedings?
(b) If the answer to (a) was in the negative, whether a suit solely for arresting a ship to
obtain security for an award in pending arbitration could be maintained

Section 9 of the Arbitration and Conciliation Act 1996 is akin to Article 9 of UNCITRAL
Model Law on International Commercial Arbitration and confers upon the Court powers to
grant interim measures, including interim measures for securing the amount in dispute in
arbitration. Since the above questions of law were of public importance the Court, through a

2
2002(4)Mh.LJ584
3
Lodging No. 503 of 2003
circular, invited interested parties and their advocates to intervene in the proceedings and
advance arguments to assist the Court.

Plaintiffs submitted that prior to the enactment of section 26 of the Civil Jurisdiction and
Judgements Act 1982 in England there was no specific legal provision that empowered the
English High Court to retain an arrested vessel as security for satisfaction of an arbitral
award. In the “Rena K”4 it was held that it was not the purpose of arresting a ship in rem to
provide security for an arbitration award which may be obtained, therefore the Court had no
jurisdiction to arrest a ship or keep a ship arrested for such purpose. Further, it was held that
even if a suit was liable to be stayed in favour of the arbitration clause in the charterparty, the
vessel arrested or security furnished would not be liable to be released unconditionally. It was
held that a cause of action in rem, being different in character from an action in personam,
did not merge in a judgment in personam but remained available to any person who had the
right so long as and to the extent that the judgment remained unsatisfied. Plaintiffs argued
that the “Rena K” judgment was not in accord with the scheme of the Arbitration and
Conciliation Act 1996 and was therefore inapplicable. Alternatively, it was argued that the
Arrest Conventions of 1952 and 1999 were a part of Indian Common law (despite India not
being a signatory) and under Article VII of Arrest Convention 1999 in rem actions only for
security in aid of pending arbitral proceedings were permitted. Interveners arguments were in
support of the plaintiffs’ arguments. The defendants argued that the suit itself was not
maintainable for want of jurisdiction, in view of the arbitration clause in the charterparty and
that the suit simplicitor for security pending arbitration in a foreign country was also not
maintainable. The defendants also relied on the judgment of the Supreme Court in P. Anand
Gajapati Raju5 wherein it was held that once a dispute is referred to arbitration, nothing
remains to be decided in the original action and such proceedings are required to be
terminated. Reliance was also placed on section 45 of the Arbitration and Conciliation Act
1996, which empowered the Court to refer the parties to arbitration, when a valid arbitration
agreement existed.

The Court, after hearing lengthy arguments of several Counsel, finally held that, in view of
the Arrest Convention 1999, it was not necessary to apply “Rena K” principles. It was
considered that the application of Article VII of the 1999 Arrest Convention to admiralty
jurisdiction would be purposive and preferable and would be more in line with accepted

4
(1978) Lloyd’s Rep 545
5
AIR 2000 SC 1886
international procedure, by which security obtained by the arrest of the ship in the action in
rem was retained to satisfy the judgment and award of the arbitration tribunal.

The Court accordingly articulated its conclusions as follows:

(i)An application under Section 9 of the Arbitration and Conciliation Act 1996 was not
maintainable for arrest of a vessel for obtaining security of an award that may be made in
arbitration proceedings. In finding thus the Court overruled the decision in the
“IndurvaValley”.

(ii) An action in rem for recovery of a claim and arrest of the vessel where parties had agreed
to submit their disputes to arbitration was maintainable and, in such a case, if by way of an
interim measure the vessel was arrested or security provided the matter was to proceed in
accordance with Article VII of the Arrest Convention 1999.

(iii) If the proceedings were brought within the time prescribed by the Court before the
Arbitral Tribunal, any final decision therefrom was to be enforced against the arrested ship or
the security provided in order to obtain its release provided the Defendant was given
reasonable notice of such proceedings and a reasonable opportunity to present the case for
defence in accordance with the provisions contained in the Arbitration and Conciliation Act
1996.

(iv) Retention of security under (ii) and (iii) above was to remain at the discretion of the
Court which could pass appropriate orders having taken into consideration all relevant
circumstances.

INDIA’S POSITION ON ARREST OF SHIP PENDING ARBITRATION

The interplay between Maritime Law and Arbitration has been long subsisting. The
international character of Maritime Law and the convenience of arbitration encourages
parties to resort to settle their disputes.

A valuable relief afforded by Maritime Law is the right of a claimant to arrest a ship as
security for its claims. With the paradigm shift from traditional litigation to arbitration, it has
been observed that a recurring question before Indian Courts is whether a ship can be arrested
as security pending arbitration proceedings, especially where there is a foreign seat of
arbitration and if so, what procedure ought to be followed. This article thus seeks to examine
the current position of Indian Courts. However, before doing so, one must appreciate how
this position came to be.

THE POSITION PRIOR TO THE CODIFICATION OF ADMIRALTY LAW

Indian Courts, on numerous occasions, have had the opportunity to determine various facets
of this question. One of the very first cases to address this issue was Golden Progress 6.The
Bombay High Court, by answering this question affirmatively, relied on the important
principle laid down in the famous case of M.V. Elizabeth 7wherein a distinction was drawn
between in rem and in personam proceedings, to distinguish obtaining security for arresting a
ship under Maritime Law (an action in rem) from obtaining security for an award that has
been or may be passed under Arbitration law (an action in personam).

It is to be noted here that the judgment in the Golden Progress was pronounced at a time
where no procedure for the arrest of a ship’s security existed in India. The Court in its
reasoning had stated that in the absence of any domestic law or inconsistency with the
domestic law, where a ship was sought to be arrested in order to satisfy a judgment or award
of an arbitral tribunal, the procedure followed would be that akin to Article VII of the
International Convention on the Arrest of Ships, 1999 (“the Arrest Convention”). Thus,
Golden Progress was a pivotal judgment in so far as it not only decided a very important
question relating to the arrest of a ship as security but also laid down a procedure for the
same. However, it must be highlighted that the aforesaid case dealt with a situation where
arbitration proceedings were completed and an award was obtained, leaving the question of
arrest of a ship as security for a claim pending future arbitration or ongoing proceedings
unanswered.

Likewise, in the case of M.V. Prapti 8, the Calcutta High Court whilst relying on an English
judgment held that although a claim in an arbitration and a claim in an admiralty suit were
similar, arrest of a ship to secure the said maritime claim was permissible as it is based on
common law procedure and thus, is not an abuse of process by a Court.9

Likewise, reckoning its judgment on a similar reasoning, the Bombay High Court in M.V.
Mehrab10, held that principles incorporated in various Arrest Conventions find their roots in
6
J.S.Ocean Liner LLC v M.V. Golden Progress and Anr. [2007 (2) ARBLR 104 Bom]
7
M.V. Elizabeth v. Harwan Investment and Trading Pvt. Ltd. [AIR 1993 SC 1014]
8
Alexandras Dryron S.A. v. Owners and parties interested in the vessel “M.V. Prapti” [1997 SCC OnLine Cal
331]
9
The Jalamatsya [(1987) 2 Lloyds Rep 164]
10
Islamic Republic of Iran Shipping Lines v M.V. Mehrab and Ors. [2002 SCC OnLine Bom 604]
common law and in turn, are part of common law in India. The Court even went a step further
in stating that the law ought to be looked at in a contemporary context. The Court also placed
reliance on laws of foreign states such U.S.A. and Canada to show the general international
notion, permitting the arrest of ships as security pending arbitration. Since, there was nothing
in Indian law prohibiting the use of admiralty jurisdiction to arrest a ship for this purpose, the
Court held that the same was permissible to secure a claim in a future or an ongoing
arbitration.

A vessel can be arrested through an action in rem under the admiralty jurisdiction of a High
Court. The admiralty jurisdiction of the High Court was aligned and modernized by the
Supreme Court of India in the case of mv Elisabeth v Harwan Investments Co Pvt Ltd (“mv
Elisabeth”); the Supreme Court put into perspective the position and power of the courts. The
Supreme Court held that the High Courts are competent to deal with all persons and things
found in their jurisdiction unless specifically curtailed or regulated by rules of international
law, by applying general principles of maritime law and the existing statutory law. It was
also noted that the power to arrest a foreign vessel which is in the territorial waters of a
coastal State is a demonstrable manifestation and an essential attribute of the State’s
territorial sovereignty. This is recognized by several international conventions and principles
of law recognized by the generality of maritime States and can be regarded as a part of our
common law. 20. A claimant in a pending arbitration cannot file a suit for the same relief as a
plaintiff in a court. This will go against the principles of res sub judice and res-judicata. The
applicability of these principles under the Code of Civil Procedure, 1908(“CPC”) is different
from their applicability under the Arbitration Act. Under the CPC, a court may exercise
discretion in rejecting a suit when there is another suit pending or has been decreed by a court
in a foreign jurisdiction on the same cause of action and between the same two parties. This
discretion does not extend to arbitrations; whether the arbitration is under Part-I or Part-II of
the Arbitration Act, a court must mandatorily make a reference to the arbitration. If an
admiralty suit is maintained when there is a pending arbitration between the parties, there
could be two different results between the arbitral proceedings and the suit, whether the suit
is an action in rem or in personam. The substantive issues and the subject matter between the
suit and the arbitration would be one and the same. Furthermore, a decree obtained in a suit
that is continued after the culmination of arbitration into an award will be without
jurisdiction, since the award has already brought finality to the disputes and is binding upon
the parties. In other words, the same cause of action on the same facts between the same two
parties could potentially face two different outcomes. Such a situation is not desirable.

There is no prohibition on an admiralty court to exercise jurisdiction in cases where the

disputes may also be referred to arbitration per se. The mere fact that the dispute falls within
the scope of an arbitration agreement does not preclude either party from bringing an action
in court. The mere existence of an arbitration agreement itself will not prevent a party from
procuring arrest of the ship or otherwise proceeding with an admiralty action in rem. The
Arbitration & Conciliation Act, 1996 (“Arbitration Act”) does not prohibit the filing of an
admiralty suit per se. If the filing of suits as such were prohibited under the Arbitration Act,
Parliament would have no need to enact provisions such as section 8 or section 45 thereof. By
way of section 8 and section 45, the existence of an arbitration agreement is brought to the
notice of the judicial authority. The judicial authority will then have to examine the validity
of the arbitration agreement and if it considers the clause to be valid, refer the parties to
arbitration in terms thereof. The requirement for parties to make a positive application to the
judicial authority is itself indicative of the fact that there is no bar to filing a suit. Thus,
notwithstanding the existence of an arbitration agreement or pendency of arbitration
proceedings, the Plaintiff is entitled to file an admiralty suit seeking a decree and the arrest of
the Defendant-Vessel as security for the Plaintiff’s claim in the suit. Even the Admiralty Act
does not preclude a Plaintiff from bringing an admiralty suit, if there is an arbitration
agreement. The only requirement is for the Plaintiff to satisfy the jurisdictional test. Once the
Plaintiff satisfies this test and prima facie shows that it has a maritime claim, the admiralty
court can exercise powers under section 5 of the Admiralty Act. There is little room to
dispute that the claims of a Plaintiff under charterparties, contracts of affreightment, etc. are
maritime claims; consequently, it cannot be suggested that the admiralty court cannot
exercise jurisdiction and decide the questions forming the subject matter of an arbitration
agreement as though the same are the subject matter of the admiralty suit.

The security obtained by arrest of the Defendant-Vessel is given in the suit and retained in the
suit itself. This is because a distinction has to be drawn between an action in rem (such as an
admiralty suit) and an action in personam (such as an arbitration). This distinction will not be
done away with because the effect of the court’s exercise of jurisdiction is that the Plaintiff
obtains security for the arbitration. Thus, the Plaintiff is entitled to an order of arrest against
the Defendant-Vessel. The only consequence of the existence of an arbitration agreement is
that either party may apply for a stay of the admiralty suit, prior to the Defendant-Vessel
filings its first substantive pleading in defense of the admiralty suit. If neither party applies
for a stay of the admiralty suit, the suit will continue in its ordinary course and be decreed in
favor of the Plaintiff. More controversially, on the other hand, should either party apply for a
stay of the suit, the admiralty court may exercise discretion and order the security obtained by
the Plaintiff to be retained for the duration of the stay. The security retained by the court for
the duration of the stay may be the Defendant-Vessel itself under arrest; alternately, the court
may require that bail or alternate cash security be provided by the shipowners for release of
the Defendant-Vessel. The procedure that can be followed by an admiralty court is as
follows:

a. The action in rem against the Defendant Vessel will be stayed and the merits of the dispute
will be referred to arbitration, whether such arbitration is under Part-I or Part-II of the
Arbitration Act.

b. Any final decision resulting from the arbitration will be recognized by the court and given
effect to with respect to the arrested ship or to the security provided in order to obtain its
release, provided that the Defendant-Shipowner has been given reasonable notice of such
proceedings and a reasonable opportunity to present the case for defense, in accordance with
the Arbitration Act. A conservative view is that the admiralty court should exercise
discretion, after considering all facts and circumstances. The more convincing view as one
jurist argued is that no discretion should be exercised at this stage. Once a right to arrest has
been established, there can be no reason to deprive the claimant the security, merely because
matters are capable of being referred to arbitration. Quite to the contrary, when Courts
promote arbitration. The retaining of security in the admiralty suit doesn’t mean that such
security is transferred to the arbitral proceedings. Rather, the Plaintiff will apply to the court
to continue the suit after the culmination of the arbitration proceedings into an award. Upon
such application, the Plaintiff will obtain a decree in the suit in terms of the award after
satisfying the court that the award is enforceable. Once the award is declared as being
enforceable, the Plaintiff may execute the decree against the security which was retained in
the suit.

Section 8 (applicable to Part-I arbitrations) requires a defendant to make an application to the

court to refer the dispute between the parties to arbitration and decline an exercise of
jurisdiction, prior to or at the time of filing its first substantive statement in defense of the
merits of the dispute in the suit. Section 45 (applicable to Part-II arbitrations) requires either
party to make an application to refer the merits of the dispute in the suit to arbitration. In
either case, once the reference is made by the court after a prima facie enquiry into the
validity of the arbitration agreement the underlying cause of action in the suit stands
exhausted and the Plaintiff/Claimant’s cause of action is transferred to the arbitration. The
law in India is clear that the court cannot split the cause of action between a suit and an
arbitration. The Plaintiff’s argument that the suit can be continued after the award runs
contrary to settled law that nothing will remain in a suit when a mandatory reference is made
to arbitration by the judicial authority.

The question that must then be answered is: if the court proceedings stand terminated by a
mandatory reference to arbitration, can it continue to retain security granted in the court
proceedings for the benefit of the arbitration? Sections 8 and 45 contain no provision similar
to Section 6 of the Singapore International Arbitration Act, 1995 or the American Federal
Arbitration Act, 1925, permitting the court to retain security granted in a suit when
mandatorily referring the merits of the matter to arbitration. Thus, when the underlying cause
of action in the suit comes to an end, it follows that the interim reliefs including arrest of the
vessel or deposit of security granted in favor of the Plaintiff stand vacated.

Subsequently, in M.V. Monchegorsk, the Court laid down that in personam proceedings are
no bar to admiralty actions in rem.11

The Issue with the Enactment of the Admiralty Act

A perusal of the above-mentioned judgments cements the historic position of Indian Courts to
permit arrest of a ship, whether foreign or domestic, as security; either anticipating, pending
or on the completion of admiralty proceedings notwithstanding the seat of the said
proceedings. It is noted that the reasons upon which Indian Courts based their judgments
ranged from identifying elements of common law forming the basis of ship arrest to treating
actions in rem and actions in personam on separate footings. Although the Courts based their
decisions on different reasonings, the general view was to permit the arrest of a ship as
security for arbitration.

However, this position was taken prior to the enactment of the Admiralty (Jurisdiction and
Settlement of Maritime Claims) Act, 2017 (“the Admiralty Act”). The enactment of the
Admiralty Act has been long awaited. An important provision in the Admiralty Act is the

11
M/s Crescent Petroleum Ltd. v M.V. Monchegorsk and Anr. [1999 SCC OnLine Bom 610]
codified claimant’s right to arrest a ship 12. Additionally, the Arbitration and Conciliation Act,
1996 (“the Arbitration Act”) which bestows a right upon parties to apply for interim measures
pending arbitration proceedings, was made to apply to foreign seated arbitrations. Thus, a
claimant seeking interim relief pending a foreign seated arbitration can approach Indian
Courts13 to obtain the same.

Although one may be inclined to think a ship maybe arrested as an interim measure under
Section9 of the Arbitration Act, it has been held that this falls squarely outside the scope of
interim measures as contemplated under the said Section 14.This is likely to be a result of the
lack of jurisdiction of an Arbitral Tribunal to have a ship arrested. It is well-settled law that
only a Court having admiralty jurisdiction can arrest a ship while it is also well-settled that
“no man can confer or take away jurisdiction of a Court”. Hence, one can confidently infer
that since, the Admiralty Act, 2017 bestows admiralty jurisdiction only on a handful of High
Courts15, Arbitral Tribunals lack admiralty jurisdiction and therefore, cannot arrest a ship.
Conversely, while the Admiralty Act, 2017makes no express provision permitting the arrest
of a ship to provide security in foreign seated arbitrations, the Arrest Convention permits the
same16. Therefore, this begs for the question whether the enactment of the Admiralty Act,
2017would alter the procedure of arrest laid down in Golden Progress and the line of
precedents permitting ships to be arrested despite an ongoing foreign seated arbitration?
Moreover, can Indian Courts arrest a ship as security for a claim, notwithstanding Section 5
of the Arbitration Act17? This question was recently decided by the Bombay High Court in
Altus Uber18.

THE PRESENT POSITION

In this case, the plaintiff had instituted admiralty proceedings to satisfy its claim arising out
of a bareboat charter which was identical to the claims submitted by it in its arbitration
proceedings in London. The Ld. Single Judge held that the Admiralty Act, 2017, in no
manner, affects or alters the position taken by the Court in Golden Progress. The Court based
its finding on the reasoning that the said Act merely lays down a test for jurisdiction which

12
Section 5, The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017
13
Section 2, The Arbitration and Conciliation (Amendment) Act, 2015
14
J.S.Ocean Liner LLC v M.V. Golden Progress and Anr. [2007 (2) ARBLR 104 Bom]
15
Section 3, The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017
16
Article 2 (3) read with Article 7 of the International Convention on Arrest of Ships, 1999
17
Section 5 of the Arbitration and Conciliation Act, 1996 bars judicial intervention save for instances as more
particularly set-out in the Act; section 9 being one such instance.
18
Siem Offshore Redri AS v Altus Uber [2018 SCC OnLine Bom 2730]
allowed a party to arrest a ship upon its satisfaction. The Admiralty Act, 2017, according to
the Ld. Single Judge, was silent on a procedure for arrest of a ship, especially in a situation
where an arbitration was pending or was yet to be commenced. Relying on what was laid
down in Golden Progress, the Ld. Single Judge held that the since there still existed a lacuna
when it came to the procedure for arrest of a ship, especially during arbitration, the procedure
laid down in the aforesaid case would apply i.e. the Arrest Convention would apply, ergo, the
arrest of a ship for security pending arbitration would be permissible.

When this case went to the Division Bench of the same Court in an appeal, the Hon’ble
Division Bench in upholding the Ld. 19Single Judge’s findings clarified that since a ship can
be arrested as security for a maritime claim pursuant to the institution of a suit for the said
claim, it would be incorrect to assume a claim in a pending arbitration and a maritime claim
are one in the same. It was further clarified by the Court that a ship is arrested pursuant to a
maritime claim as opposed to a claim in an ongoing or to be instituted arbitration. The two
claims, although similar, exist in different spheres. It would here be useful to emphasize on
the distinction between an action in rem versus an action in personam which would allow a
party to steer clear of the bar imposed by Section 5 of the Arbitration Act on the interference
of Courts, where there exists a reference to arbitration. The Court further went on to add that
where a suit to secure the claim in arbitral proceedings is instituted, the requirements
stipulated in the Admiralty Act, 2017 are to be fulfilled. Thus, what the Hon’ble Division
Bench sought to do was clarify the position that an arbitration claim is distinct from a
maritime claim, albeit the two maybe similar. In doing so, the Hon’ble Division Bench has
given effect to the essence of Section 5 of the Admiralty Act, 2017 which provides for the
arrest of a ship only where there exists a maritime claim, although this appears to be a slight
departure from what was held in M.V. Mehrab, supra. However, this deviation is
understandable in light of the codification of Maritime Law in India. Nonetheless, the
Hon’ble Division Bench, keeping in line with historic precedents, upheld the arrest of a ship
as security pending ongoing foreign seated arbitrations, however subject to the prerequisites
contained in Admiralty Act, 2017.

CONCLUSION

In this regard and at glimpse of the plethora of judgments, it can be seen that the Indian
Courts have maintained a consistent view. In doing so, the Courts have protected this
longstanding relief offered to aggrieved claimants under Maritime Law. It may here be
19
Altus Uber v Siem Offshore Redri AS [2019 SCC OnLine Bom 1327]
mentioned that one of the principles on which the Courts order for arrest of the ship can be
traced back to the imposition of the Mareva Injunction 20by Lord Denning, allowing for an
injunction on a party’s assets pending traditional litigation or arbitration proceedings.
Furthermore, since this view seems to be in line with foreign States such as the U.K., U.S.A.
and Canada, Indian Courts appear to be in comity with international law. Moreover, the
Courts in upholding the sanctity of a vital relief under Maritime Law have ensured that
justice is not just offered but is also seen to be done in fit cases. In conclusion, it can be said
that in India, there is no bar on arresting a ship as security pending arbitration proceedings
even where there is a foreign seat of arbitration.

20
Mareva Compania Naviera SA v International Bulkcarriers SA “The Mareva” [(1980) 1 All ER 213]