Holding

A claim arising out of a charter contract does not constitute a maritime lien; therefore no right in rem exists and Admiralty jurisdiction cannot be invoked.

Summary

Epoch Enterprises entered into a charter agreement, evidenced by a fixture note, with the disponent owner of the vessel M.V. Won Fu to export feldspar. The vessel failed to load the cargo, prompting Epoch to sue in rem in the Admiralty jurisdiction of the Madras High Court for arrest of the ship and damages. The trial court and the High Court division bench dismissed the suit, holding that the claim arose from a contractual breach and did not give rise to a maritime lien or a right in rem. On appeal, the Supreme Court examined whether a fixture note can create a maritime lien and whether such a lien is necessary to invoke Admiralty jurisdiction. It held that maritime liens are limited to damage by the ship, salvage, seamen’s and master’s wages, master’s disbursements and bottomry, and a charter contract does not fall within these categories. Consequently, no maritime lien existed, no right in rem arose, and Admiralty jurisdiction could not be invoked. The appeal was dismissed, leaving the parties free to pursue a personal action for breach of contract.

Issues considered

The fixture note creates a maritime lien or a right in rem enabling Admiralty jurisdiction.
Whether a claim arising from a charter/transport contract constitutes a maritime lien.
Whether an action in rem is permissible against the vessel in the absence of a maritime lien.

Legislation cited

Indian Evidence Act, 1872s. 58

Subjects

maritime lienadmiralty jurisdictionaction in remcharter partyfixture notebreach of contractship arrestdisponent owner

Judgment

EPOCH ENTERREPOTS A
v.
M.V. WON FU

OCTOBER 29, 2002
-I

[UMESH C. BANERJEE AND Y.K. SABHARWAL, JJ.] B

Maritime Law:

Suit for damages against vessel for breach of contract-Agreement for
transportation of cargo entered with disponent owner of the vessel- C
Agreement evidenced by Fixture Note-Whether Maritime Lien applicable on
the basis of the Fixture Note and whether the Fixture Note by itself would
give rise to a right in rem enabling to initiate proceedings under Admiralty
Jurisdiction-Held, a claim arising out of an agreement relating to the use
and/or hire of the ship although a maritime claim but it is not a Maritime D
Lien-It is restricted to the events of (a) damage done by a ship; (b) salvage;
(c) seamen 's and master's wages; (d) master's wage; (e) master's disbursement;
and (/) bottomry-Jn the facts of the case the contract arises de hors a
Maritime Lien, no action in rem is possible and hence Admiralty Jurisdiction
cannot be invoked-Admiralty Court Act, 1861-Jnternational Convention
for Unification of Certain Rules relating to Maritime Liens and Mortgages, E
Brussels, 1926-Brussels Arrest (of Seagoing Ships) Convention 1952-
Brussels Maritime Liens Convention 1967.

Words and Phrases:

Maritime Lien' and 'Disponent '-Meaning of in the context of mari.time F
law.

.Appellant/ plaintiff entered into a contract with defendant/ respondent's
ship disponent owner to export a cargo. Fixture Note stated of such agree.ment.
Since the respondent ship did not carry the cargo, appellant flied suit in rem G
in the Admiralty Jurisdiction of the High Court for arrest of the ship and for
recovery of damages for breach of contract by reason of loss and damages
suffered and caused by the ship. The suit was contested by the respondent
·ship without disclosing the ownership of the ship. Single Judge of the High
Court dismissed the suit on the ground that since no shipment had taken
place and as the ship was not involved for the breach of contract by the H
507
508 SUPREME COURT REPORTS [2002] SUPP. 3 S.C.R.

A disponent owner or any other party, Admiralty Jurisdiction of the Court could
not be invoked. In appeal, Division Bench of the High Court confirmed the
[_
view of the Single Judge and dismissed the appeal.

In appeal to this Court the question for consideration was the
applicability of Maritime Lien on the basis of the Fixture Note and alternatively
B as to whether the Fixture Note by itself would give rise to a right in rem thereby
enabling the appellant to initiate proceedings under Admiralty Jurisdiction
of the High Court.

Dismissing the appeal, the Court

C HELD: I.I. Admiralty Court Act, 1861, read with the International
Convention for Unification of Certain Rules relating to Maritime Liens and
Mortgages, Brussels, 1926 read with Brussels Arrest (of Seagoing Ships)
Convention 1952 and Brussels Maritime Liens Convention 1967 clearly
indicate that a claim arising out of an agreement relating to the use and/or
D hire of the ship although a maritime claim would not be liable to be classified
as maritime Hen. 1518-B, C)

1.2. Maritime lien can be said to exist or restricted to in the event of (a)
damage done by a ship; (b) salvage; (c) seamen's and master's wages; (d)
master's wage; (d) master's disbursement; and (e) bottomry; and in the event
E a maritime lien exists in the aforesaid five circumstances, a right in rem is
said to exist. Othenvise, a right in personam exists for any claim that may
arise out of a contract. The limited applicability of such a lien thus well
illustrates that not every kind of service or every kind of damage which arises
in connection with a ship gives rise to a maritime lien. This is apart from the
statutory enactments which may further list out various other forms of
F maritime claims.1518-E, F; 519-C, DJ

M. V. Elisabeth v. Harwan Investment and Trading Pvt. ltd. Goa, AIR
(1993) SC 1014 and M. V. Al Quammar v. Tsavliris Savage (International)
ltd. and Ors., 120001 8 SCC 278, referred to.

G The Bold Bucc/eugh (1851) 7 Meo P.C. 267; The Tervaete (1922 (P)
259, referred to.

Encyclopedia Britannica; Thomas on Maritime liens; Rippon city (1897)
226, 246, referred to.

H 2.1. Even, however, assuming the agreement has in fact been entered
. EPOCH ENTERREPOTS v. M.V. WON FU [BANERJEE, J.] 509

into by the disponent owner, unless sufficient evidence is laid that the charter A
was by demise, whereby the possession and control of the vessel was given to
the disponent owner, question of pursuing the cause of action against the
vessel would not arise. In the contextual facts, apart from the Fixture Note,
no other documentary support is available as to whether ownership arose
through a charter by demise and possession and control of the vessel has
already been given to the disponent owner. The facts disclose that the disponent B
was an intending charterer of the vessel from the owner and it is on
expectancy of such a contract, the Fixture Note was issued. There was as a
matter of fact no charter party or agreement with the charterer and some
eventuality in future is stated to be the basis of the cause of action. The
disponent owner was not a demise charterer but it is on the happening of such C
an event in future that such a Fixture Note has been issued. There is no
sufficient evidence available as regards the action in rem making the vessel
liable in the contract said to have been entered into, as recorded in the Fixture
Note. It is in the nature of a breach of contract and liability of the vessel would
not arise. [524-A-El
D
2.2. Inasmuch as the claim in the present case arises out of contract de
hors a maritime lien, no action in rem is permissible, neither a suit in the
original jurisdiction of the High Court can be maintained against the vessel.
[524-GI

Black's Law Dictionary (7th Edition), referred to. E

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7039 of 2002.

From the Judgment and Order dated 5.1.200 I of the Chennai High Court
in O.S.A. No. 314 of2000.
F
A.T.M. Sampath, for the Appellant.

C.A. Sundaram, Vishwajit Singh, Manu Seshadri and Ms. S. Aiyar, for
the Respondent.

The Judgment of the Court was delivered by G
BANERJEE, J. Leave granted.

Issuance of warrant for the arrest of the vessel M.V. WON FU berthed
at Madras Port has been the principal controversy before the Madras High
Court in its Admiralty Jurisdiction. H
510 SUPREME COURT REPORTS [2002] SUPP~3 S.C.R.

A The plaintiff being the appellant herein instituted a suit for recovery of
damages of 11 lakhs for breach of contract with interest at the rate of 24%
per annum by reason of loss and damages suffered and caused by breach of
contract by the defendant vessel. The factual element we will refer shortly
. here after but presently be it noted that against the refusal to entertain the
suit and the consequent dismissal of the same before the learned trial judge,
B the plaintiff moved the appellate forum in the High Court but having failed
to obtain the relief the petition for special leave under Article 136 has been
moved before this Court and this Court at the admission stage itself upon
issuance of notice and upon the grant of leave as appears herein before
proceeded to deal with the issue without much of procedural formalities.
c Turning attention to a brief reference on to the factual score it appears
that the plaintiff being a sole proprietor concern stands involved in the
business of export of mines and minerals especially in Feldspar. In the usual
course of events plaintiff entered into an agreement with Mis. SAN I. Mining
Company at Taiwan to export Feldspar and to complete the agreement between
D the parties the plaintiff entered into an agreement with said to be defendant's
sh·ip disponent owner, to export the cargo of Feldspar from Tuticorin harbour
to Taiwan. The agreement is stated to be evidenced in a fixture note dated
20. I0.1995. The relevant extract whereof are as below:

"It is this day mutually agreed between Taiyo Senpaku Kaisha, Ltd.
E Tokyo as disponent owners and Epoch Entrrepots. Madras as
charterers on the following terms and conditions-

- Vessel: XfY WONFU AS DESCRIBED.

- Cargo: XIN 8.000 MI IN IF BLS FELDSPAR UPTO VSLS FULL
F CAPACHOP

- LID Port: !SB SP Tuticorin India/I-SB I SP TAICHUNG,
TAIWAN

- Laycan: 25th Oct-5th Nov. 1995

G - LID Rate: 1.200 XT PWDSSEX BIU/1.500MT PWDSEEX W
IUARC

- Freight: VSD 25.00 PWI F!OST BSS 1/1

- Payment: 100 pe1 frt payable w/I 5 banking days acol S/BLS/L
H
EPOCH ENTERREPOTS v. M.V. WON FU [BANERJEE, J.] 511

FET-prepaid A
- Full frt TB deexed earned by ovrs CH is discountless non-returnable
whether CGO/VSL Lost or not lost.

- CGO TB loaded in unobstructed main hold only

- Demurrage: USS 4000.00/DHD Vis be B

- Agents Owners Agents be

Disponent owners Charterers
TAIYO Senpaku Kaisha Ltd. Manager c
M. Takahashi, Managing EPOCH Entrepots
Director Suguna Apartments
12-A, Lloyds Road,
Madras 600 014"
On the factual matrix the learned Senior Advocate Mr. ATM Sam path D
rather emphatically contended that the contract stands completed by the
signing of the fixture note and the plaintiff has also acted in terms therewith
by exporting stock 8400 MT of Feldspar to Taiwan through the defendant's
vessel on 26.10.1995. It has been the contention that the defendant's ship has
failed to act in terms of the fixture note by reason wherefor the plaintiff has E
not been able to send the cargo to the purchaser as per the schedule thus
exposing the plaintiff to suffer a loss of 11 lakhs by reason of a deliberate
act of default to ship the cargo on the vessel.

As detailed above the learned single Judge dismissed the suit and
recorded inter alia the following: F
"The plaintiff sought for the claim of arrest of the vessel and for
damages. The arrest of the vessel can be sought for only under the
Admiralty Jurisdiction. Nothing was performed with regard to loading
of cargo in the ship. The plaintiff states that since the contract for G
export of goods was dropped, the vessel must be arrested. Since no
shipment of the cargo has taken place, the Admiralty Jurisdiction of
this Court cannot be invoked. The fixture note Ex.Pl is between the
plaintiff and Taiyo Senpaku Kaisha Ltd. No contract has been entered
into between the plaintiff and the defendant, the owner of the vessel
WON FU. Absolutely there is no disponent to link the defendant with H
512 SUPREME COURT REPORTS (2002] SUPP. 3 S.C.R.

A the alleged contract <md that there was a concluded contract between
the plaintiff and the defendant. In the absence of any specific evidence
to prove that there was a contract between the plaintiff and the
defendant. I am quite unable_to accept the case of the plaintiff. I hold
. that there is no privity of co_ntract between the plaintiff and defendant.
If at all there was breach of contract, the plaintiff has to seek their
B remedy under the proper forum for breach of contract. Since no
shipment had taken place and as the ship is not involved for the
breach of contract by the disponent owner or any other party the
Admiralty Jurisdiction of this Court cannot be involved and arrest of
vessel cannot be sought for. The facts and circumstances of the case
c do not come under the Admiralty Jurisdiction of this Court. Further,
the suit is also not filed against the proper party. The name of the
owner of this ship is not mentioned in the short cause title. It is not
clear from the plaint as to against whom the plaintiff sought the relief.
, The suit has not been properly framed."
D It .is this conclusion and the finding of the learned Single Judge stands
accepted by the Division Bench without how1:ver much elucidation on the
same and as such we refrain ourselves from recording herein any further save
that the appeal by the plaintiffs stands rejected and the present appeal before
this Court by reason therefor.
E
Without however going to the issue of privity of contract which has
been o~e of the basic reasons for the learned single judge to come to the
conclusion, be it noted that the suit has been framed for the arrest of the
vessel MY WON FU in the Admiralty Jurisdiction of the High Court at
Madras. At this juncture however a brief historical perspective of the Admiralty
F Jurisdiction in the country may be adverted. The three erstwhile Presidency
High Courts (in common and popular parlance Chartered High Courts), namely,
Calcutta, Bombay and Madras were having the Letters Patent for the
conferment of the ordinary original civil jurisdiction and by reason of the
provisions contained therein read with the Admiralty Court Act, 1861 and
G subsequent enactment of Colonial Courts of Admiralty Act, 1890 and Colonial
Courts of Admiralty (India) Act.

The High Courts of these three Presidency towns were conferred with
the same jurisdiction as was vested in the High Court of England and the
High Courts were declared to be otherwise competent to regulate their
H procedure and practice as would be deemed necessary corresponding to the
EPOCH ENTERREPOTS v. M.V. WON FU [BANERJEE, J.] 513
Indian pffspective in exercise of the admiralty jurisdiction by way of rules A
framed in that regard. There is no manner of doubt that there existed or is
existing any fetter in regard to the exercise of admiralty jurisdiction in so far
as the three High Courts at Calcutta, Bombay and Madras are concerned.

It is in this context observations of this Court in M V. Elisabeth v.
Harwan Investment and Trading Pvt. Ltd., Goa, AIR (1993) SC 1014 seem to B
be of some assistance. This Court in paragraph 26 of the report observed:

"Assuming that the admiralty powers of the High Courts in India
are limited to what had been derived from the Colonial Courts of
Admiralty Act, 1890, that Act, having equated certain Indian High
Courts to the High Court of England in regard to admiralty jurisdiction, C
must be considered to have conferred on the former all such powers
which the latter enjoyed in 1890 and thereafter during the period
preceding the Indian Independence Act, 1947, what the Act of 1890
did was, as stated earlier, not to incorporate any English statute into
Indian law, but to equate the admiralty jurisdiction of the Indian High D
Courts over places, persons, matters and things !I) that of the English
High Court. As the Admiralty jurisdiction of the English High Courts
expanded with the progress of legislation and with the repeal of the
earlier statues, including in substance the Admiralty Court Acts of
1840 and 1861, it would have been reasonable and rational to attribute
to the Indian High Courts a corresponding growth and expansion of E
admiralty jurisdiction during the pre-independence era. But a restrictive
view was taken on the question in the decision of the High Courts
cited above."

Turning attention on to the appeal presently before us the cardinal
issue arises for consideration stands out to be the applicability of the concept F
of Maritime Lien on the basis of the fixture note as above stated and
alternatively as to whether the fixture note by itself would give rise to a right
in rem thereby enabling the plaintiff to initiate proceedings under Admiralty
Jurisdiction of the High Court at Madras.
G
Before embarking on to the discussions apropos above, certain notions
as regards the constituents of Maritime Liens ought to be noticed: the
·Encyclopedia Britannica has the following to state as regards Maritime Lien
and the same reads as below:

"Maritime liens: although admiralty actions are frequently brought H
514 SUPREME COURT REPORTS (2002) SUPP. 3 S.C.R.

A in personam, against individual or corporate defendants only, the
most distinctive feature of admiralty practice is the proceeding in rem,
against maritime property, that is, a vessel, a cargo, or "freight", which
in shipping means the compensation to which a carrier is entitled for
the carriage of cargo.

B Under American maritime law the ship is personified to the extent
that it may sometimes be held responsible under no liability. The
classic example of personification is the "compulsory pilotage" case.
Some State statutes impose a penalty on a ship owner whose vessel
fails to take a pilot when entering or leaving the waters of the State.
Since the pilotage is thus compulsory, the pilot's negligence is not
c imputed to the ship owner. Nevertheless, the vessel itself is charged
with the pilot's fault and is immediately impressed with an inchoate
maritime lien that is enforceable in Court.

Maritime liens can arise not only when the personified ship is
charged with a maritime tort, such as a negligent collision or time tmt,
D
.such as a negligent collision or personal injury, but also for salvage
services, for general awrage contributions and for breach of certain
·maritime contracts."

Incidentally, be it noted that this concept of maritime lien did come for
E judicial scrutiny before the Courts often and it is Sir John Jervis who probably
for the first time in The Bold Buccleugh (1851 (7) Moo P.C. 267) defined the
maritime lien as below :

" ....... a maritime lien is well defined ........ to mean a claim or privilege
upon a thing to be carried into effect by legal process ...... that process
F to be a proceeding in rem ...... This claim or privilege travels with the
thing into whosoevers possession it may come. It is incohate from the
moment the claim or privilege attaches, and, when carried into effect
by legal process by a proceeding in rem, relates back to the period
when it first attached."

G While the definition provided by Sir John Jervis, as above, stands
accepted in various other decisions of the English Courts, the definition by
Atkin L.J. in The Tervaete (1922 (P) 259) became subject matter of criticism
by reason of its failure to distinguish a maritime lien and its maritime right of
action in rem. Atkin L.J., however, in The Tervaete defined the maritime lien
H as below:
EPOCH ENTERREPOTS v. M.V. WON FU [BANERJEE, J.] 515

" ......... of the right by legal proceedings in an appropriate form to have A
the ship seized by the officers of the Court and made available by sale
if not released on bail."

In M. V. AL Quamar v. Tsavliris Salvage (International) Ltd. and Ors.,
[2000] 8 SCC 278: AIR 2000 SC 2826 this Court upon reference to Elisabeth's
case (supra) has the following to state as regards the attributes of maritime B
lien. Thi; Court observed in paragraphs 33 to 36 as below:

33. Be it noted that there are two attributes to maritime lien : (a) a right
to a part of the property in the res; and (b) a privileged claim upon
a ship, aircraft or other maritime property in respect of services rendered C
to, or injury caused by that property. Maritime lien thus attaches to
the property in the event the cause of action arises and remains
attached. It is, however, inchoate and very little positive in value
unless it is enforced by an action. It is a right which springs from
general maritime law and is based on the concept as if the ship itself
has caused the harm, loss or damage to others or to their property and D
thus must itself make good that loss. (See in this context 'Maritime
Law' by Christopher Hill, 2nd Edn.)

34. As regards the concept of proceeding in rem and proceeding in
personam, it should be understood as actions being related to the
same subject-matter and are alternative methods pertaining to the E
same claim and can stand side by side.

35. In this context, reference may also be made to the observations
of this Court in M. V Elisabeth's case, AIR (1993) SC 1014 (supra), as
stated below :-
F
"47. Merchant ships of different nationalities travel from port to
port carrying goods or passengers. They incur liabilities in the
course of their voyage and they subject themselves to the
jurisdiction of foreign States when they enter the waters of those
States. They are liable to be arrested for the enforcement of
maritime claims, or seized in execution or satisfaction of judgments G
in legal actions arising out of collisions, salvage, loss <>f life or
personal injury, loss of or damage to goods and the like. They
are liable to be detained or confiscated by the authorities of
foreign States for violating their customs, regulations, safety
measures, rules of the road, health regulations, and for other H
516 SUPREME COURT REPORTS [2002) SUPP. 3 S.C.R.

A causes. The coastal State may exercise its criminal jurisdiction on
board the vessel for the purpose of arrest or investigation in
connection with certain serious crimes. In the course of an
international voyage, a vessel thus subjects itself to the public
and private laws of various countries. A ship trav~elling from port
to port stays very briefly in any one port. A plaintiff seeking to
B . enforce his maritime claim against a foreign ship has no effective
remedy once it has sailed away and if the foreign owner has
neither property nor residence within jurisdiction. The plaintiff
may therefore detain the ship by obtaining an order of attachment
whenever it is feared that the ship is likely to slip out of jurisdiction,
c thus leaving the plaintiff without any security.
48. A ship may be arrested (i) to acquire jurisdiction; or (ii) to
obtain security for satisfaction of the claim when decreed; or (iii)
in execution of a decree. In the first two cases the Court has the
discretion to insist upon security being furnished by the plaintiff
D to compensate the defe9dant in the event of it being found that
the arrest was wrongful and was sought and obtained maliciously
or in bad faith. The claimant is liable in damages for wrongful
arrest. This practice of insisting upon security being· furnished
by the party seeking arrest of the ship is followed in the United
States, Japan and other countries. The reason for the rule is that
E
a wrongful arrest can cause irreparable loss and damages to the
shipowner; and he should in that event be compensated by the
arresting party. (See Arrest of Ships by Hill, Soehring, Hosoi and
Helmer, 1985)".
36. In Halsbury' s Laws of England, the nature of action in rem
F
and the nature of action in personam is stated to be as below:
310. Nature of actions in rem and actions in personam. - An
action in rem is an action against the ship itself, but the visw
that if the owners of the vessel do not enter an appearance
to the suit in order to defend their property no personal
G
liability can be established against them has recently been
questioned. It has been stated that, if the defendant enters
an appearance, an action in rem becomes, or continues also
as, an action in personam; but the Admiralty jurisdiction of
the High Court may now in all cases be invoked by an action
H in personam, although this is subject to certain restrictions
EPOCH ENTERREPOTS v. M.V. WON FU [BANERJEE, J.] 517
in the case of collision and similar cases, except where the A
defendant submits or agrees to submit to the jurisdiction of
the Court.

The foundation of an action in rem is the lien resulting from
the personal liability of the owner of the res. Thus an action
in rem cannot be brought to recover damages for injury B
caused to a ship by the malicious act of the master of the
defendant's ship, or for damage done at a time when the ship
was in the control of third parties by reason of compulsory
requisition. On the other hand, in several cases, ships allowed
by their owners to be in the possession and control of C
charterers have been successfully proceeded against to
enforce liens which arose whilst the ships were in control of
such third parties.

The defendant in an Admiralty action in personam is liable,
as in other actions in the High Court, for the full amount of D
the plaintiffs proved claim. Equally in an action in rem a·
defendant who appears is now liable for the full amount of
the judgment even though it exceeds the vale of the res or
of the bail provided. The right to recovery of damages may
however be affected by the right of the defendant to the
benefit of statutory provisions relating to limitation of E
liability."

In M.V. AL Quamar (supra) this Court spoke of two attributes of maritime
lien as noticed herein before. The International Convention for Unification of
Certain Rules relating to Maritime Liens and Mortgages at Brussels in 1967
defined the maritime lien to be as below : F
a. 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;
b. port, canal and other waterways and pilotage dues; G
c. claims against the owner in respect of loss of life or personal
injury occurring, whether on Ian~ or on water, in direct connection
with the operation of the vessel;
d. claims agairist the owner based on tort and not capable of being
based on contract, in respect of loss of or damage to property H
518 SUPREME COURT REPORTS (2002] SUPP. 3 S.C.R.

A occurring, whether on land or on water in direct connection with
the operation of the vessel;
e. claims for salvage, wreck removal and contribution in general
average.

In~identally, the Admiralty Court Act, 1861, read with the International
B Convention for Unification of Certain Rules relating to Maritime Liens and
Mortgages, Brussels, 1926 read with Brussels Arrest (Of Seagoing Ships)
Conventi<?n 1952 and Brussels Maritime Liens Convention 1967 clearly indicate
that a cla!m arising out of an agreement relating to the use and/or hire of the
ship although a maritime claim would not be liable to be classified as maritime
C lien. (See in this context Thomas on Maritime Liens).

Mr. Sampath, learned Senior Advocate with all the emphasis in his
command contended that the breach of the agreement in the facts of the
matter under consideration cannot but be ascribed to be a maritime lien,
whereas Mr. Sundaram, learned Senior Advocate appearing for the respondents
D rather strongly refuted the same and contended that even assuming that there
was in fact an agreement in existence between the respondent and the disponent
owner, question of there being a maritime lien by reason of the breach of such
an agreement does not and cannot arise. We have in this judgment herein
before dealt with the attributes of maritime lien. But simply stated maritime lien
E can be said to exist or restricted to in the event of (a) damage done by a ship;
(b) salvage; (c) seamen's and master's wages; (d) master's disbursement; and
(e) bottomry; and in the event a maritime lien exists in the aforesaid five
circumstances, a right in rem is said to exist. Otherwise, a right in personam
exists for any claim that may arise out of a contract.

F Mr. Sampath did place very strong reliance on to the fixture note and
contended that the document itself cannot but be termed to be a concluded
contract relying upon the maritime lien. Upon reliance thereon, Mr. Sampath
contended that the fixture note contains all the particulars and has been
issued after the completion of negotiations and upon acceptance of the terms
and conditions, by reason whereof the fixture note is final and the same binds
G not only the parties to the agreement but also the vessel. Incidentally, the
fixture note stands issued by the Japanese Company (Taiyo Senpaku Kaisha
Ltd.) through its agent in Malaysia, M/s Oriental Shipping Corporation.

Further on the issue, we find Thomas on Maritime Liens stated it to
H represent a small cluster of claims which arise either out of services rendered
EPOCH ENTERREPOTS v. M.V. WON FU [BANERJEE, J.] 519

to a maritime res or from damage done to a res and listed five several heads A
of maritime liens as under :

(a) Damage done by a ship
(b) Salvage
(c) Seamen's wages B
(d) Master's wages and disbursements
(e) Bottomry and Respondentia.

The limited applicability of such a lien thus well illustrates that not
every kind of service or every kind of damage which arises in connection with C
a ship give5 rise to a maritime lien. We, however, hasten to add that this is
apart from the statutory enactments which may further list out various other
forms of maritime claims. In the Ripon City [(1897) P. 226, 246], Gorrel Barnes,
J. upon appreciation of this facet of a maritime lien and also, in part, to the
surrounding policy considerations observed :
D
... "....... A maritime lien travels with the vessel into whosoever possession
it comes, so that an innocent purchaser of a ship may find his property
subject to claims which exist prior to the date of his purchase, unless
the lien is lost by laches or the cl?.im is one which is barred by the
Statutes of Limitation. This rule is stated in The Bold Buccleugh ...... to E
be deduced from the civil law, and, although it may be hard on an
innocent purchaser, if it did not exist a person who was owner at the
time a lien attached could defeat the lien by transfer if he pleased."

As regards the issue of relationship between a maritime lien and personal
liability of a res owner, Thomas has the following further to state : F
"The issue as to the relationship between a maritime lien and the
personal liability of a res owner is therefore one which may fall to be
answered differently as between individuals maritime liens. It is clear
that the various maritime liens do not, in this regard, display common
characteristics. The fact that there exists this disparity may in turn be G
a symptom of the absence of any clearly defin°ed theoretical framework
in the development of the law relating to maritime liens. It is also note-
worthy that the emphasis on personal liability is most clearly
established in relation to the damage and disbursement maritime liens
which were the last in point of time to be established."
H
520 SUPREME COURT REPORTS [2002] SUPP. 3 S.C.R.

A As regards the merits of the matter presently, Mr. A.T.M. Sampath,
commented that the factum of contract between the parties was clearly admitted
by the agent of the respondent vessel in its counter dated 24.6. I 996 in
Application No. 1147of1996. The admission of the Vessel is as follows:-

"As per the .contract between the plaintiff and the respondent
B dated 20. I 0.95 there is absolutely no provision for payment of 24%
interest in the case of any delayed shipment".

It is in this context it has been contended that the respondent vessel
never disclosed the owner of the vessel in the written statement and reply
statement and as a matter of fact till date the respondent vessel did not
C disclose who is actually contesting the case. For the first time in the cross
examination they marked the "Lloyd's Maritime Directory" of the year 1998
and in which the owner of the vessel has been shown as one Pambridge
Maritime Inc., Panama City. Only in the Additional Written Statement for the
first time it has been stated that the owner is in Hongkong, but even the name
D of the owner was not disclosed. The records depict that the respondent
vessel filed a power of attorney before the trial court. In which Skarrup ...
Management of Hongkong gave power of attorney in favour of one PC Thilak
and Venkatachalam. The above said Venkatachalam filed the counter in O.A.
No. 1147 of 1996. But P.C. Thilak the other power of attorney subsequently
filed a reply statement, in which he has stated that the admission made by
E the other power agent is without getting the instruction from the owner and
without knowing the fact that they are not the parties to the document but
yet the respondent vessel did not disclose as to the owner of the vessel.

Further reliance was placed on the decision of this Court in Nagindas
p Ramdas v. Dalpatram Ichharam alias Brijram and Ors., (1974] I SCC 242,
wherein this Court in paragraph 27 stated as regards the admissions of
pleading the following :

. " ......... Admissions in pleadings or judicial admissions, admissible
under Section 58 of the Evidence Act, made by the parties or their
agents at or before the hearing of the case, stand on a higher footing
G
than evidentiary admissions. The former class of admissions are fully
binding on the party that makes them and constitute a waiver of proof.
They by themselves can be made the foundation of the rights of the .
parties. On the other hand, evidentiary admissions which are receivable
at the trial as evidence, .are by themselves, not conclusive. They can
H be shown to be wrong."
EPOCH ENTERREPOTS v. M.V. WON FU [BANERJEE, J.] 521

In continuation of his submission as regards the fixture note it has been A
the definite submission of Mr. Sampath that the Japanese Company cannot
but be said to be the disponent owner of the vessel M. V. WON FU and,
however, thus leads us to the next issue as regards the maintainability of the
suit upon an assumption that the latter has been the disponent owner. Black's
Law Dictionary (7th Edition) illustrates the meaning of 'dispone' being available B
in Scot's Law and means to grant or to convey. It is on this score, Order XLII
Rule 2 of the Original Side Rules of the Madras High Court has been referred
to, which reads as below :

"A suit shall be instituted by a plaint drawn up, subscribed and
verified according to the provisions of the code, save that if the suit C
is in rem, the defendants may, subject to such variations as the
circumstances may require, be described as "the owners and parties
interested in the vessel" or other property proceeded against instead
of by name."

Mr. Sampath contended that the suit is filed under the admiralty D
jurisdiction in rem in the Original Side of the High Court of Judicature at
Madras and not in personam since the respondent vessel as per the fixture
note was bound to make itself available in Tuticorin Port and the laycan time
was fixed as 25th October-5th November to load 8,000 MTs and the destination
was Taiwan. The buyer of the cargo is San-I-Mining, Taiwan. The appellant
informed the same to his buyer immediately after entering of the agreement E
with Taiyo in Ex.P.2 dated 26.10.1995. Further it has been stated that in order
to avoid demurrage, the cargo was transported from the appellant's stockyard
to the local clearing and forwarding agent Mis Lotus Marine Shipping Clearing
and Forwarding Agent's stockyard near the Port and thus it is a duty incumbent
of the Charterer to be ready with the cargo near the stockyard for immediate F
shipment. It has been contended that once the contract was entered between
the parties and the ship is available for shipment of the cargo, it is the
bounden duty and obligation under the contract for the. owners and master
of the vessel to make available of the ship as agreed in the contract and any
breach, if occasioned, would entitle the Charterer to claim damages for the
loss. In the present case the ship is within the territorial water of India. The G
ship is unloading iron cargo at Madras Port as per appellant's agent's
information to the appellant. The appellant informed the same to his buyer in
Taiwan in Ex.P2 on 26.10.1995. The appellant when waited for the ship to reach
the Tuticorin Port to load his cargo, he received the message, the copy of fax
message sent to the disponent owner from his agent in Malaysia in Ex.P .3 H
522 SUPREME COURT REPORTS [2002] SUPP. 3 S.C.R.

A dated 27.10.1995 stating that the respondent vessel is dropping the business
and it contains further infonnation that if the vessel did not perform this
contract it would result in serious consequences.

Mr. Sampath contended that the appellant immediately filed the suit on
30.10.95 under the admiralty jurisdiction in rem and the order of arrest was
B passed on 1.11.1995 and the ship was arrested on 2.11.1995. One Skarupp
Management, Hongkong entered appearance through its counsel Mis King
& Patridg~. (But no affidavit of'interest was filed as enumerated in the Original
Side Rules and this came to the knowledge of the appellant only when the
appellant filed a petition to peruse the records at the time of trial.) To release
C the vessel; a bank guarantee was given and the ship left the jurisdiction of
India upon furnishing ·security for the release.

It is on this score very strong emphasis has been laid on the decision
of this Court in M V. Elisabeth (supra). Special attention has been drawn to
paragraph 44 of the Report in M.V. Elisabeth which reads as below :
D
"The vital significance and distinguishing feature of an admiralty
action in rem is that this jurisdiction can be assumed by the coastal
authorities in respect of any maritime claim by arrest of the ship,
irrespective of the nationality of the ship or that of its owners, or the
place of business or domicile or residence of its owners or the place
E where the cause of action arose wholly or in part."

In para 44 of M.V. Elisabeth (supra) it has been further observed as
follows:

": ..... In admiralty the vessel has a juridical personality, an almost
F corporate capacity, having not only rights but liabilities (sometimes
distinct from those of the owner) which may be enforced by process
and decree against the vessel, binding upon the world, for admiralty
in appropriate cases administers remedies in rem, i.e. against the party
personally."

G It is submitted that in the present case the respondent vessel entered
appearance through its counsel but the affidavit of interest by the owner of
the vessel was not filed and the respondent vessel without disclosing its
owner contested the case. Again emphasis should be made to the fact that
Skarrup ·Management of Hongkong filed a power of attorney in favour of two
H persons jointly and severally. In the course of the cross-examination of the
EPOCH ENTERREPOTS v. M.V. WON FU [BANERJEE, J.) 523
PW.I for the first time the respondent vessel produced Lloyd's Maritime A
Directory Ex.DI and claimed that one Pam bridge Maritime Inc., of Panama City
was the owner in the year 1998. But in the additional written statement filed
by the respondent vessel on 30. 7.1998 in para 2 it has been stated as follows:
(
'\ "It is submitted that the aforementioned counter affidavit was
filed in reply to the plaintiffs applications for amendment when the B
Defendant's agents in Chennai did not have complete instructions
from the defendant who is at Hongkong."

The additional written statement and the Lloyd"s Maritime Directory are
of the same year 1998. But in the additional written statement there is no C
mentioning that the respondent is at Panama City. The Lloyd's Maritime
Directory of the year 2000 did not contain the name of M.V. Won Fu. The
book is published every year. Even the author of the book did not guarantee
its authenticity.

The power of attorney of Skarupp Management after the disposal of the D
O.S.A. filed a petition seeking the permission of the High Court permitting the
respondent's counsel to withdraw the amount, for the sole reason that the
order of the High Court in C.S. No.1693 of 1995 is that the money, which is
lying in the fixed deposit in the credit of the suit, should be refunded to the
respondent vessel. As per the order of the High Court the money can be paid
only in favour of Pambridge Maritime Inc. In the application seeking the E
permission of the Court to permit the respondent's counsel to withdraw the
amount once again it has been stated that the owner is in Hongkong. Jhus,
the suit is contested without disclosing the ownership of the respondent
vessel before the Lower Court as well as before this Court. Thus the suit is
stated to be contested in rem and not in personam. F
Mr. C.A. Sundaram, Senior Advocate, appearing for the respondent, on
the other hand very strongly contended that even assuming that an agreement
had come into effect between the owner and the disponent owner, but unless
the charter was by demise, whereby the possession and control of the vessel
has to be given to the disponent owner, question of enforcing the same in G
an action in rem and against the res would be rather futile. Incidentally, this
aspect of the matter, namely, the action in personam and the action in rem has
been rather elaborately dealt with in M V. Elisabeth (supra) as also in M. V. AL
Quamar (supra).
' H
1 Even, however, assuming the agreement has in fact been entered into
l
!
t

\
524 SUPREME COURT REPORTS (2002) SUPP. 3 S.C.R.

A by the disponent owner, unless sufficient evidence is laid that the charter was
by demise, whereby the possession and control of the vessel was given to
the disponent owner, question of pursuing the cause of action against the
vessel would not arise. Needless to add that charter parties are of three kinds;
(a) Demise Charter; (b) Voyage Charter; and (c) Time Charter. Whereas in
J
B demise charter, the vessel is given to the charterer who thereafter takes (
complete control of the vessel including manning the same, in both voyage
,
charter and time charter, master and crew are engaged by the owner who act
under owner's instructions but under the charterer's directions. Simply put,
'
voyage charter is making available the vessel for use of carriage for a particular
voyag~ and the time charter correspondingly is where· the vessel is made
C available for carriage of cargo for a fixed period of time. In the contextual facts,
apart from the fixture note, no other documentary support is available as to
whether ownership arose through a charter by demise and possession and
control of the vessel has already been given to the disponent owner. The
facts disclose that the disponent was an intending charterer of the vessel
D from the owner and it is on expectancy of such a contract, the fixture note
was issued. There was as a matter of fact no charter party or agreement with
the ch~rterer and !;ome eventuality in future is stated to be the basis of the
cause of action. It is on this score we think it expedient to record that even
upon assumption of the appellant's case at its highest, no credence can be
attached thereto. The disponent owner was not a demise charterer but it is
E on the happening of such an event in futuro that such a fixture note has been
issued. In our view there is no sufficient evidence available as regards the
action in rem making the vessel liable in the contract said to have been
entered into, as recorded in the fixture note. It is in the nature of a breach
of contract and liability of the vessel would not arise, though however, we
are not expressing any opinion as regards the maintainability of an action in
F
personam or its eventual success. Inasmuch as the claim in the present case
arises out of contract de hors a maritime lien, no action in rem is permissible,
neither a suit in the original jurisdiction of the Madras High Court can be
maintained against the vessel.

G On the wake of the aforesaid, this appeal fails and is dismissed, without,
however, any prejudice to initiate further action in personam. No costs.

K.K.T. Appeal dismissed.