Holding

The Bombay High Court had no jurisdiction to entertain the limitation of liability suits, and its orders, including anti‑suit injunctions, are void.

Summary

World Tanker Carrier Corp (WTCC), a Liberian company, owned the vessel New World which collided on the high seas with the Cyprus‑registered vessel YA Mawlaya, resulting in deaths and damages. Various claimants filed suits in the United States, while SNP Shipping Services (an Indian company) and Kara Mara Shipping (Cyprus) filed limitation of liability suits in the Bombay High Court, seeking to set up limitation funds and anti‑suit injunctions. The High Court entertained the suits, granting injunctions and ordering WTCC to deposit US$12.3 million, but WTCC contested the court’s jurisdiction. The Supreme Court held that the Bombay High Court lacked jurisdiction because the collision occurred abroad, the parties and vessels were foreign, and only minimal Indian connection (crew recruitment) does not confer jurisdiction; sections 2, 3(15) of the Merchant Shipping Act, Clause 12 of the Letters Patent and CPC s.20 do not apply to limitation actions. Consequently, the High Court’s orders were set aside, the appeals were allowed, and no anti‑suit injunctions were enforceable.

Issues considered

Whether the Bombay High Court has jurisdiction to entertain limitation of liability (admiralty) suits filed by foreign owners/managers of foreign vessels when the occurrence took place on the high seas.
Whether Sections 2 and 3(15) of the Merchant Shipping Act, 1958, Clause 12 of the Letters Patent and Section 20 of the CPC apply to limitation actions.
Whether the presence of a foreign vessel in Indian territorial waters or the appearance of a foreign defendant confers jurisdiction.
Whether anti‑suit injunctions issued by a court lacking jurisdiction are valid.
Whether orders passed by a court without jurisdiction must be obeyed and can give rise to contempt.

Legislation cited

Code of Civil Procedure, 1908s. 20
Colonial Courts of Admiralty Act, 1891
Merchant Shipping Act, 1958s. 2, s. 3(15), s. 352, s. 352A, s. 352C, s. 352F

Subjects

limitation of liabilityadmiralty jurisdictionMerchant Shipping Actforeign vesselanti‑suit injunctionforum shoppingjurisdictionCivil Procedure CodeLetters PatentBrussels Conventioncontempt of court

Judgment

A WORLD TANKER CARRIER CORPORATION
v.
SNP SHIPPING SERVICES PVT. LTD. AND ORS.

APRIL 20. 1998

B (SUJATA V. MANOl-IAR, S.P. KURDUKAR AND D.P. WADHWA, JJ.]

Merchant Shipping Act, 1958 : Sections 352-A 352-C and 352-F(J).

limitation of liability-Action for-By owners of sea-going vessel-
C Jurisdiction of court-Collision took place between two vessels, both of
which were foreign vessels, on the high seas off the coast of a foreign
country-The owners or charterers, managers or sub-managers were foreign
companies except onzv one of the managers which was an Indian company-
Al/ the claimants/defendants were foreigners who neither resided in India
D nor did any business in India, nor submitted to the jurisdiction of any court
in India, nor filed any liability action in India-Indian company recruited
crew of one of the vessels in India whir.h was brought to a port in India after '-<
filing of suit for limitation action-Foreign defendant appeared before Indian
court under protest to contest jurisdiction-Held: Any court in which liability
action is filed or is likely to be filed, such as a court of domicile 0/ the owner
E or of the ship has jurisdiction-In the circumstances of the case, Indian court
will have no jurisdiction-Presence of foreign defendant in Indian court
would also not confer jurisdiction on that court-Colonial Courts ofAdmiralty
Act, 1891-Admira!ty Courts Act, 1811.

Sections 2 & 3(15) and Part X-A-limitation of liability-Action for-
F By owners of sea-going vessel-Nature of-Held : The action is not against
any vessel-Hence Ss 2 & 3(15) not attracted-Part X-A confers a right in
person am on the owner of the vessel-Cl. I 2 of letters Patent has no
application because Cl. 32 governs limitation action-Similarly, S. 20 CPC
also not attracted-Letters Palen/ of Bombay High Court, C/s 12 & 32-
G Code of Civil Procedure, 1908, S.20.

The appellant, a foreign company, owned a vessel New World registered
in a foreign country which was involved in a collision in international waters
off the coast of a foreign country with a vessel, YA Mawlaya, registered in
a foreign country and owned by a foreign company. As a result of the
H collision eight crewmembers of the vessel New World died. There were
1032
WORLD TANKER CARRIER CORPN. 1-. SNP SHIPPING SERVICES PVT. LTD. 1033

injuries to some of the crewmembers and there was damage to the both the A
vessels. There was also damage to the cargo, which been loaded on the vessel
YA Malwlaya in New Orleans, USA. The owner of YA Mawlaya had entered
into a management agreement with the respondent, a company registered in
India, for had management of YA Mawlaya. Thereafter, the owner of YA
Mawlaya sold the vessel to another foreign company and became bare boat
charterers of the vessel. According to the appellant, on the sale of the said B
vessel, the owner's agreement with the respondent came to an end whereas
according to the respondent they were put in charge of recruiting crew and
officers of the said vessel. The respondent entered into a sub-contract with
a foreign company for commercial management of the vessel YA Mawlaya.

Thereafter, several proceedings were adopted by various claimants
c
ag:iinst the owners of YA Mawlaya in the District Court of New Orleans,
which included an action, by the appellant for recovery of damages for
damage to its ship New World. The legal heirs of some of the crewmembers
who died in the collision also filed civil actions for various amounts.
D
During the pendency of all these proceedings, the respondent filed an
Admiralty Suit in the High Court for limitation of the respondent's liability
in respect of the said collision. The respondent prayed i11ter a/ia for setting
up of a limitation fund, for an indemnity from the owner of YA Mawlaya and
the appellant in respect of all claims against the respondent relating to the
collision. Interim relief was also prayed for restraining those defendants E
who had 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 actions instituted by them in the U.S. Courts or elsewhere
(anti-suit injunctions).

Much after the filing of the Admiralty suit the vessel YA Mawlaya was F
brought to the port of Bombay under ballast. The vessel was arrested. Later
the owner of YA Mawlaya filed an Admiralty Suit in the High Court seeking
limitation of its liability and setting up of a limitation fund in respect of its
liability arising from the collision of its vessel with the appellants's vessel
New World. Although the appellant did not appear in the two Admiralty Suits G
initially, it later appeared under protest to contest the issue of jurisdiction
of the High Court to entertain these Admiralty Suits to be tried as a
preliminary issue on a demurer.

In the two Admiralty suits the High Court had granted anti-suit
injunctions against the appellant restraining it from proceeding with its H
1034 SUPREME COURT REPORTS [ 1998) 2 S.C.R.

A claims in the court at New Orleans, USA. Contempt proceedings were taken
out for breaches of the orders passed by the High Court in this connection.
By an order of a Single Judge of the High Court in the contempt proceedings
the defence of the appellant was ordered to be struck off. The Division Bench
of the High Court after considering the recalcitrant conduct of the appellant
and the contempt committed by it, ultimately held that the appellant could be
B given one more chance to appear and defend the proceedings on condition
that in future it complied with all the orders of the court. The Division Bench y
also held that the High Court had jurisdiction to entertain and try the suits.
Pursuant to motions filed by the owner of YA Mawlaya and the respondent,
the High Court also passed an order directing the appellant to deposit in the
C High Court a sum of US$ 12.3 million and interest accrued thereon to
secure compliance by the appellant of orders of the High Court. Hence this
appeal.
On behalf of the respondent it was contended that according to Clause
12 of the Letters Patent of the Bombay High Court, Section 20(2) of the Code
of Civil Procedure, 1908 and Section 3(15) of the Merchant Shipping Act,
D 1958 the High Court, within whose jurisdiction a part of the cause of action
arose, had jurisdiction in a limitation action; and that an order passed by a
High Court even though it might be without jurisdiction must be obeyed.

Allowing the appeal, this Court
HELD : I. I. Part X-A of the Merchant Shipping Act, 1958 does not deal
E with or contain provisions relating to vessels. It deals with the personal right
of an owner of the vessel to limit his liability in respect of claims against
him arising out of an "occurrence" to his vessel. It is a right in personam
that he seeks to enforce against the claimants. Therefore, Sections 2 and
3(15) of the Act do not apply to his action. Part X-A which deals with
F limitation actions also does not contain any express provision of the kind
contemplated by Article 7 of the Brussels International Convention, 1957.
Clause 12 of the Letters Patent of the Bombay High Court also has no
application because a limitation action is governed by Clause 32 of the
Letters Patent and not Clause 12. For the same reason, Section 20 of the
Code of Civil Procedure, 1908 will not govern the Admiralty jurisdiction of
G a chartered High Court regulated by its Letters Patent.
11049-G-H; 1050-FI
Brussels Jnternation Convention, I 19571 Article 7, referred to.
1.2. A limitation action as in the present case, falls under the High
Court admiralty jurisdiction. But a limitation action, though filed in admiralty,
H is not against a vessel. It is a protective action against claims. which may
+
WORLD TANKER CARRIER CORPN. 1·. SNP SHIPPING SERVICES PVT. LTD ] 035

be filed by others against owner of the vessel in admiralty jurisdiction. A
Therefore, a plea of limitation can be taken as a defence by the owner in an
-.:. action in admiralty filed against him by the claimant against him and his
ship. Hence, the court having jurisdiction to entertain an admiralty action
against the vessel of the owner has jurisdiction to set up a limitation found
for the owner. Similarly, if the owner initiates the "defensive" action in
limitation, the court, which has jurisdiction to entertain a liability claim, will B
have jurisdiction to entertain the limitation action. If a liability claim is
already filed, that court will have jurisdiction over limitation action also. But
claims may be several, and they may be actually filed or may be apprehended.
Any court where such a claim is filed or is likely to be filed will have
jurisdiction to entertain a limitation action. The court of domicile of the C
owner and the ship is a court where such a claim is likely to be filed.
Therefore, that court will also have jurisdiction. Out of these, the owner has
the option of choose his court for filing a limitation action. A limitation
action in admiralty jurisdiciton cannot be filed in a court where part of the
cause of action arises when all claimants who are defendants to the action
are foreigners who reside outside India, who do not carry on business in D
India and who have not submitted to the jurisdiction of any court in India,
and have not filed a liability action in India and are not likely to do so.
[1050-A-D; G]
British India Steam Navigation Co. Ltd, v. Shanmughavilas Cashew
Industries, [1990] 3 sec 481, relied on. E
Volvox Hollandia, {1988] 2 Lloyds 'Law Reports 36/, Baer. "Admiralty
Law of the Supreme Court" p.154 and Cheshire and North: Private
International Law, 12th Edn. p. 213, referred to.

2.1. In the present case the collision which gave rise to the owner's F
liability has occurred on the high seas off the coast of a foreign country.
Neither of the vessels 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 Mawiaya is an Indian company. And the only act of
management in Bombay is said to be the recruitment of the crew. This factor G
alone will not confer jurisdiction. [1051-G-H]

/ 2.2. Moreover, when the right to set up a limitation found is a right
which is common to all persons coming within the category of "owner"
under Section 352-F of the Act and a common limitation fund has to be set
up, an act of management only by one of the "owners" when all the other H
1036 SUPREME COURT REPORTS [ 1998] 2 S.C.R.

A owners and their acts are outside the jurisdiction of the High Court, will not
be sufficient of confer jurisdiction. It is difficult to consider the High Court
as the domiciliary court of the owners of YA Mawlaya when the persons/
companies to whom the vessel belongs are doniiciled outside India and out
of the entire body of persons/companies falling within the term "owner",
B under Section 352-F, only one manager is an Indian company, and the vessel
is registered in a foreign country. (1052-A-C)
2.3. 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 YA Mawlaya in the courts of the United
C States prior to the filing of the Admiralty Suit in India. The High Court,
therefore, ought not to have entertained the Admiralty Suit brought by the
respondent. [1052-D)
3. In the case of the owner of YA Mawlaya, which is a foreign company,
no part of the cause of action has arisen within the jurisdiction of the High
D Court. The vessel, which met with the collision, given rise to liability, is a
foreign vessel. The collision took place in the high seas off the coast of a
foreign country. All the claims against the owner of YA Mawlaya have been
filed in foreign courts and the claims, which have now been filed before the
High Court, are not the claims, which can be subjected to limitation.
[1052-E-F)
E 4.1. A limitation action is not directed against the ship nor can the
action be instituted by the arrest of the foreign vessel present in the territorial
waters of the country where the action is instituted. It is an action by the
owner acting personally against his claimants who are seeking damages in
respect of the loss or injury caused by the owner's vessel. Therefore, the
p presence of a foreign vessel in the territorial waters will not give the court
jurisdiction to entertain a limitation action by its owner unless the presence
of the foreign vessel has given rise to an admiralty action by a claimant in
the court, which claim is subject to limitation, or the presence of the vessel
has created a likelihood of such action being taken there, or the court is a
domiciliary court of the owner attracting such claims there. That is not the
G case here. In fact, at the time when the owner of YA Mawlaya filed the suit
all claims were already filed against it in the foreign court at New Orlens,
U.S.A. No doubt the owner of YA Mawlaya had challenged the jurisdiction of -\..,
that court and had succeeded in the first round. But that was by no means
a final adjudication. Nor can one legitimately conclude from this the likelihood
H of claims being filed in Bombay. In the present case, the High Court is not
WORLD TANKER CARRIER CORPN.,. SNP SHIPPING SERVICES PVT. LTD. 1037
the domicilary court of the owner of YA Mawlaya or the vessel. Nor is any A
claim for liability, which can be limited, filed against the owner of YA
Mawlaya in the High Court. None of the defendants to the suit it within the
jurisdiction of the High Court. The fortuitous presence of the ship in the
Bombay harbour will not entitle the owner to file a limitation action in the
High Court in the absence of any claim being made or apprehended against
him or the vessel in that Court. Therefore, bringing the ship to the Indian
B
port, in order to confer jurisdiction on the High Court, has the character
\'
of forum shipping, rather than anything else. [1052-H; 1053-A-E)
4'

4.2. The presence of a defendant, who appears under protest to contest
jurisdiction, cannot be considered as conferring jurisdiction on the court to
c
take action. Unless a foreign defendant either resides within jurisdiction or
voluntarily appears or has contracted to submit to the jurisdiction of the
court, it is not possible to hold that the court will have jurisdiction against
a foreign defendant . The High Court, therefore, should not have entertained
the two Admiralty Suits. [1053-F)
D
R. Viswanathan v. Rukn-ul-Mu/k Syed Abdul Wajid, [1963) 3 SCR 22
and Raj Rejendra Sardar Ma/oji Marsingh Rao Shitole v. Sri Shanker Saran,
[1963) 2 SCR 577, relied on.

5. It is true that an order passed by a High Court even though it may
be without jurisdiction must be obeyed. If such an order is disobeyed it E
amounts to contempt of court and proceedings can be taken in that connection
against the contemnor. There is no doubt tha.t the conduct of the appellant
in the various proceedings which have taken place before the High Court
leaves much to be desired. Had the appellant initially filed appearance under
protest to contest jurisdiction, all these problems would not have arisen. The
F
High Court itself, however, after severely commenting on the conduct of the

- "'
appellant, has allowed the appellant to defend the proceedings on condition
that the appellant would, in future, obey the orders of the High Court. It is,
therefore, not necessary to examine the questionable conduct of the appellant
in the proceedings before the High Court. The High Court has no jurisdiction
to entertain the two admiarlty Suits and; therefore, the future conduct of the G
appellant in these proceedings now becomes irrelevant. [1054-A-D)

Tayabbhai M.Bagasarwa/la v. Hind Rubber Industries Pvt. Ltd, [1997)
3 sec 443, relied on.

CIVIL APPELLATE JURISDICTION: Civil appeal No. 8534 of H
1038 SUPREME COURT REPORTS [ 1998] 2 S.C. R.

A 1997Etc.

From the Judgment and Order dated 4.12.97 of the Bombay High Court
in A.S. No 26 of 1995.

K.K. Venugopal, S. Venkiteswaran, R.F. Nariman P.H. Parekh, Sameer
B Parekh, Amit Dhingra, Ms. S. Priya and V. Subramanian for the Appellant.

Soli J. Sorabjee, S.P. Chinoy, George, A.Rebello, z. Bhaurcha and N.
Ganpathy for the Respondents in S.N.P. Shipping.

C.A. Sundaram, A.M. Vernkar, Ms. Madhavi Divan, Rajiv Dutta and
C Uday Kumar for the Respondents in Kara Mara Shipping.
The Judgment of the Court was delivered by

MRS. SUJATA V. MANOHAR,J. Leave granted.

World Tanker Carrier Corporation (hereinafter referred to as the 'WTCC'
D 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" in international
waters 200 nautical miles off the coast of Portugal. YA Mawlaya is a vessel
E 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. On 20th October, 1994, Kara Mara sold the
vessel YA Mawlaya to Vestman Shipping Company Ltd., a company registered
in Cyprus. Kara Mara thereafter became bare boat charterers of YA Mawlaya.
F Prior to the sale of the said vessel, Kara Mara had entered into a management
agreement dated I Ith of April , 1994 with SNP Shipping Services 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 Mara's agreement with SNP came to an end. On
G 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 the 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
H Company is a company registered in the United Kingdom. Its holding company
WORLD TANKER CARRIER CORPN ,. SNP SHIP SER\"ICES PVT.LTD. [SUJATA \' MANOllAR. J] J039

Holbud Ltd. is also a company registered in England. Thus in respect of the A
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.
B
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 and there was damage to both the vessels. There was also
damage to the cargo . At the time of collision YA Mawlaya was carrying a C
cargo of soyabeans belonging to the Italian firm of Cereo I 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 WTCC's P & I Club Britannia on 18th January, 1995. D
Between 30th of 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 damages for
damage to their ship New World. Cereo! also filed a civil action against both E
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 l 7 and 20, 1995 got two sister vessels of YA Mawlaya, YA Latf and
YA Jaleel arrested in the action brought by the appellant in the United States F
of America. These vessels were pleased on the issue of a letter of undertaking
for U.S. $ 20 Million by P & l Club of Kara Mara and SNP the New Castle
Protection and Indemnity Association (hereinafter referred to as 'New Castle').
Kara Mara thereafter filed an action for limitation of liability in the
Supreme Court of Hong Kong against WTCC and all possible claimants. The G
court at Hong Kong has, however, stayed the writ in Hong Kong on the
~round 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 and all YA
Maw laya interests have filed a common defence, inter alia, pleading that the
court at new Orleans lacks jurisdiction and the actions should be dismissed H
1040 SUPREME COURT REPORTS [I 998] 2 S.C.R.

A on the ground of forum non conveniens. This issue is under examination
there.

During the pendency of all these proceedings, on I 2th of May, I 995,
SNP filed Admiralty Suit No. 26 of I 995 in the Bombay High Court. The suit
which has been filed in the admiralty jurisdiction of the Bombay High Court
B is for limitation ofSNP's liability in respect of the said collision. Prayers (a)
to (e) in the Admiralty Suit No. 26of1995 pertain to setting up ofa 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 c:ollision, Interim reliefs prayed for in prayers (h)
C 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 actions instituted by them in
the U.S. courts or elsewhere (anti-suit injunctions).

Originally, the only plaintiff in the Admiralty Suit No. 26 of I 995 was
D SNP. Subsequently, Holbud Ship Management Ltd., Holbud Ltd., H. Merali
and Shaukat Merati, Directors of Holbud Ship Management Ltd. have got
themselves transposed as plaintiffs 2 to 5.

On 15/16th of November, 1995, much after the filing of Admiralty Suit
E 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 Engineer of YA Mawlaya in respect of their claim for
wages and loss of future wages. The vessel YA Mawlaya has been arrested
F in these three suits also. One Galaxy Multimodal Ltd. filed an application in
the pending admiralty suit of SNP for a fresh arrest of the same vessel on the
ground of non-payment for supply of necessities. And in that application also
the ship has been arrested.

On 22nd of March, 1996 Kara Mara filed Admiralty Suit No. 28 of 1996
G 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 appear in the two admiralty suits initially, it has now
appeared under protest to contest the issue of jurisdiction of the Bombay
High Court to entertain these admiralty suits to be tried as a preliminary issue
H on a demurer.
WORLD TANKER CARRIER CORPN. , .. SNP SHIP SERVICES PVT LTD [SUJATA \' MANOHAR, J.) I Q4 !

In the two admiralty suits, the Bombay High Court has also granted A
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 breaches of the orders., passed by the Bombay
High Court in this connection. By an order of a !earned Single Judge of the
High Court in the contempt proceedings the defence of WTCC was ordered
to be struck off. We are not referring to these proceedings in detail because
B
y·
of what has subsequently transpired on appeal before the Division Bench. On
the question of the jurisdiction, the Single Judge 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/
2 lst of August, 1997 in Appeal No. 556of1997, after considering the recalcitrant c
conduct of WTCC and the contempt committed by it, ultimately held that
WTCC can 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 and try the suits. Civil Appeal D
No. 8534 of 1997 filed before us by WTCC is against the order of 2I.8.1997
~ holding that the Bombay High Court has jurisdiction to entertain and try the
suit. Civil Appeal No. 8535 of I 997 is from the order dated 20/21.8. I 997 in
contempt proceedings.

Kara Mara and SNP also filed motions to compel WTCC to deposit in E
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 leassrs. Haight Gardner Holland and Knight under certain arrangements,
and until further orders of the Bomllay High Court. The High Court, by its
order dated 2I.11. 1997 in appeal in these Motions taken out in Admiralty Suit F
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.
8536of1997 has been filed by WTCC against this order of 21st of November,
1997.
G
The High Court has passed a further order dated 4. 12. 1997 in Admiralty
..
.I' Suit No. 26 of 1995 as also as Admiralty Suit No. 28 of 1996. Posting these
suits for ex parte hearing in January, 1998 . Civil Appeals arising out of
S.L.P.(C) Nos. 3 and 4of1998 have been filed against these orders. By interim
orders in these S.L.P.s,, the ex parte hearing of the two suits has be::n stayed. H
1042 SUPREME COURT REPORTS [1998] 2 S.C.R.

A We have heard all these appeals together since common questions of
law arise in all these appeals. The first question that requires consideration
is the question of jurisdiction. In order to consider the question of jurisdiction
it is necessary first to examine the nature of a limitation action.

Describing the nature of a limitation action, Baer in his book "Admiralty
B Law of the Supreme Court" at page 154 traces the historic origins of limitation
of liability as follows:-
f

"[M]en would be deterred from employing ships, if they lay under
the perpetual fear of being answerable ·for the acts of their masters to
an unlimited extent." Thus wrote the renowned Dutch jurist, Hugo
c Grotius, in 1625. To impose liability on shipowners for acts of their
masters would be "neither consonant to natural equity ... nor ....
conducive to the public good." Referring to the law of his own nation,
Grotius continued, "[J]t is an established rule that no action can be
maintained against the owner for any greater sum than the value of
D the ship and cargo."

Although by no means uniform, some sort of rule of limited
liability on the part of the shipowner has been the law of the leading
maritime nations of continental Europe since the middle ages
"
E
In I 924 several leading nations adopted the International Convention
for the' Unification of certain .Rules relating to the limitation of liability of
owners of sea-going vessels. This is commonly referred to as the Brussels
Convention of I924. In 1957 a new convention on Limitation of Liability of
Sea Going Vessels was drafted to replace the Brussels Convention of 1924.
F The new convention, commonly referred to as the Brussels Limitation
convention of 1957 was signed by many leading maritime nations of the
world. It is also signed by India. The Convention fixes the limit of liability of
an owner of a sea-going vessel on the basis of the tonnage of the vessel
without regard to the vessel's value. It was to incorporate this Convention
G in our statute law that Part XA was inserted in the Merchant Shipping Act,
1958.

The right of an owner to bring a limitation action is governed by Part
XA of the Merchant Shipping Act, 1958. The whole purpose of limitation of
.
...,.

liability is to protect an owner against large claims, far exceeding the value
H of the ship and cargo, which can be made against him all over the world in
WORLD TANKER CARRIER CORPN. •·. SNP SHIP. SERVICES PVT.LTD. [SUJATA V MANOHAR. J] JQ4J

case his ship meets with an accident causing damage to cargo, to another A
vessel or loss of personal life or personal injury. A limitation action, though
it is normally filed in the admiralty jurisdiction of a court, is somewhat
different from an ordinary admiralty action which normally begins with the
arrest of the defaulting vessel. The vessel itself, through its master is a party
in the admiralty suit, and the plaintiff must have claims provable in admiralty B
against the vessel. In the case of an action for limitation of liability, it is the
personal right of the owner of the vessel lo file a limitation action or to use
it as a defence to an action against him for liability. It is a "defensive" action
against claims in admiralty filed by various claimants against the owner of the
vessel and the vessel. A limitation action need not be filed in the same forum
as a liability action. But it must be a forum having jurisdiction to limit the C
extent of such claims and whose decree in the form of a limitation fund will
bind all the claimants.

In the case of Vo/vox Hollandia, (1988) 2 Lolyds' Law Reports Page
361, the English Court describing the nature of a limitation action observed D
that the purpose of limitation proceedings is, of course, to obtain a decree
,,· in ram against all claimants for a single sum limited to the amount of a
limitation fund. Referring to the Brussels Convention of 1957, the court
referred to Article 4 which provides that the Rules relating to the constitution
and distribution of the limitation fund, if any, and all Rules of procedure shall
be governed by the national law of the State in which the fund is constituted. E

The Brussels Convention 1957 does not specify the appropriate forum
in which a limitation action properly so called, may be instituted by the ship
owner, However, Article 7 0f the Brussels Convention, 1957 gives to a
Contracting State the right to exclude certain persons from the benefit of its F
provisions. Thus persons not ordinarily resident in a contracting State nor
having their principal place of business in the Contracting State and ships not
flying the flag of the Contracting states can be excluded.

Article 7 is as follows
G
"This convention shall apply whenever the owner of a ship, or any
other person having by virtue of the provisions of Article 6 hereof the
same rights as an owner of a ship, limits or seeks to limit his liability
before the court of a contracting State or seeks to 'procure the release
of a ship or other property arrested or the bail or other security given
within the jurisdiction of any such State. H
1044 SUPREME COURT REPORTS [1998] 2 S.C.R.

A Ne1wtheless, each Contracting Stale shctll have the right to
exclude. 11huily, or partially, fi-0111 the benefits of this Convent ion any
non-Co/1/racting State. or any person who, at the time when he seeks
to limit his liability or to secure the release of a ship or other property
arrested or the bail or other security in accordance with the provisions
of Article 5 hereof, is not ordinarily reside111 in a Contracting State,
B or does not have his principal place of business in a Contracting
State or any ship in respect of ll'hich !imitation of liability or release
is sought which does not at the time specified above fly !he flag of
a Contracting State. "

(underlining ours)
c
Under principles of Private International Law, a court cannot entertain
an action against a foreigner resident outside country or a foreigner not
carrying on business within the country, unless he submits to the jurisdiction
of the court here. This principle applies to actions in personam.
D
Regarding actions in rem, Cheshire and North in Private International
Law, Twelfth Edition, explain the position with reference to admiralty actions.
It is stated (P. 213):

" ... the only action in rem known to English law is that which lies in
E an Admiralty court against a particular res, namely a ship or some
other res, much as cargo, associated with the ship.

The Supreme Court Act 1981 lists the claims that lie within the
Admiralty Court and goes on to make detailed provision as to when
an action in rem may be brought. To take one instance, the rule has
F long been that a maritime lien attaches to and remains enforceable
against a ship that collides with and damages another ......

That the ship is the defendant in an action brought to enforce the
lien is underlined by the legal process available to the plaintiff. After
obtaining the issue of a summons in rem, he may procure a warrant
G for the arrest of the ship which is then affixed by the Admiralty
Marshal of a short time on any mast of the ship or on the outside of
any suitable part of the ship's superstructure, being later replaced by
a true copy. There is no alternative method.

H The person is the ship, and therefore it is essential that it should
WORLD TANKER CARRIERCORPN 1· SNP SHIP SERVICES PVT LTD [SUJATA V MANOHAR. J] J045

be ' so situated as to be within the lawful control of the State under A
the authority of which the court sits' . In short. the court is competent
to entertain the action if the ship lies within the territorial waters of
England ........"

This is also the basis on which chartered High Courts exercise admiralty B
i jurisdiction. Clause 32 of the Letters Patent of the Bombay High Court defines
~ its admiralty jurisdiction with reference to preceding letters patents which
derive jurisdiction under the Colonial Courts of Admiralty Act, 1891 and the
Admiralty Courts Act, 1811.

This court had an occasion to deal with the question of jurisdiction with C
reference to foreign vessels and foreign owners of such vessels. In the case
of British India Steam Navigation Co. ltd. v. Shanmughavi/as Cashew
Industries & Ors., [ 1990) 3 SCC 481 this Court examined the effective operation
of the statutes of a country in relation to foreigners and foreign ships. This
court said (p. 492): "In general , a statute extends territorially, unless the
contrary is stated, throughout the country and will extend to the territorial D
waters, and such places as. intention to that effect is shown. A statute extends
to all persons within the country if that intention is shown. The Indian
Parliament, therefore, has no authority to legislate for foreign vessels or
foreigners in them on the high· seas. Thus a foreign ship on the high seas,
or her foreign owners or their agents in a foreign country, are not deprived E
of rights by our statutory enactment expressed in general terms unless it
provides that a foreign ship entering an Indian port or territorial waters and
thus coming within the territorial jurisdiction is to be covered ............. Without
anything more Indian statutes are ineffective against foreign property and
foreigners outside the jurisdiction." It is this principle whkh is reflected in
Section 2(2) of the Merchant Shipping Act, 1958. F
Section 2 of the Merchant shipping Act, 1958 deals with the application
of the Act. It states that the provisions of the Merchant Shipping Act which
apply to a vessel, will apply to those vessels which are specified in that
section. Section 2 is as follows:-
G
"Section 2 :

,. (I) Unless otherwise expressly provided, the provisions of this Act
whic~ apply to.

(a) any vessel which is registered in India: or H
1046 SUPREME COURT REPORTS [1998] 2 S.C.R.

A (b) any vessel which is required by this Act to be so registered;
or

(c) any other vessel which is owned wholly by persons to each
of whom any of the descriptions specified in clause (a) or in
clause (b} or in Clause (c) as the case may be , of section 21
B applies,

shall so apply wherever the vessel may be.

(2) Unless otherwise expressly provided, the provisions of this Act
which apply to vessels other than those referred to in sub-
C section (1) shall so apply only while any such vessel is within
India, including the territorial waters thereof."

(underlining ours)

In section 2(1Xc), the reference to persons specified in clauses (a), (b) and
D (c) of Section 21 is to:" (a) a citizen of India; or (b) a company or a body
established by or under Central or State Act which has its principal place of
business in India; or (c) a Co-operative society which satisfies the following
requirements, namely; (I) the co-operative society is registered or deemed to
be registered under the Co-operative Societies Act, 1912, or any other law
relating to Co-operative Societies for the time being in force in any State; (ii)
E every individual who is a member of the Co-operative society and where any
other co-operative society is member thereof, every individual who is a
member of such other co-operative society, is a citizen of India" . Thus a
vessel falling under Section 2(1) (c) is a vessel owned wholly by Indian
citizens/Indian Companies/Indian Co-operative S.Jcieties.
F Section 3(15) defines "High Court" in relation to a vessel. It is as
follows:

"Section 3(15):

High Court, in relation to a vessel, means the High Court within
G the limits of whose appellate jurisdiction -

(a) the port of registry of the vessel is situate; or

(b) the vessel is for the time being or;

H (c) the cause of action wholly or in part arises; "
WORLD TANKER CARRIER CORPN "· SNP SHIP SERVICES PVT LTD. [SUJATA V MANOHAR. J.) ) 047

Both these sections apply to those provisions of the Act which apply A
to a vessel. Section 2 provides that those provisions of the Merchant Shipping
Act which apply to vessels falling in Section 2( I). shall apply wherever such
a vessel may be. Those provisions which apply to vessels falling in Section
2(2) i.e. foreign vessels, shall apply only while the vessel is in Indian territorial
waters. There are several sections and/or parts of the Merchant Shipping Act B
which apply to vessels. e.g. Part V of the Merchant Shipping Act, 1958
y (Sections 20 to 74) deals with Registration oflndian Ships. Part VIII deals with
passenger ships and so on. In relation to litigation regarding vessels the High
-.. Court having jurisdiction is specified in Section 3(15).

The provisions regarding a limitation action have been reduced to a C
statutory form in part XA of the Merchant Shipping Act, 1958. Part XA was
introduced in the Merchant Shipping Act, 1958 by Amending Act 25 of 1970,
in order to give effect to the Brussels International Convention of 1957
relating to the limitation of liability of the owners of sea-going ships, to which
India is a signatory. Part XA consists of Sections 352, 352A to 352F. Under
Section 352A the owner of a sea-going vessel may limit his liability in respect D
of any occurrence to his vessel resulting in loss of life of personal injury or
-" loss of property or damage to cargo either in respect of persons or property
carried on his vessel or on another vessel as also any liability in respect of
damage to a vessel. The owner is entitled to limit his liability in respect of
all such claims arising from one occurrence, in the manner provided in Section
3528 provided that the occurrence giving rise to the claims did not result from E
the actual fault or privily of the owner. The burden of proving that the
occurrence which has given rise to a claim against the owner of a vessel did
not result from his actual fault or privity, shall be on the owner. Thus Section
352A(l) and (2) provide as follows:

"Section 352A: F

(I) The owner of a sea-going vessel may limit his liability in
accordance with the provisions of section 3528 in respect of any
claim arising from any of the following occurrence unless the
occurrence giving rise to the claim resulted from the actual fault G
or privily of the owners -

la) loss of life of or personal injury to, any. person being carried in
the vessel, or loss of, or damage to any property on board the
vessel;

(b) loss of life of, or personal injury to, any other person (whether H
1--
1048 SUPREME COURT REPORTS [ 1998] 2 S.C.R.

A on land or on water), loss of or damage to any other prope11y
or infringeme~t of any rights-
,_.
(i) which is caused by the act, neglect or default or any person
on board the vessel for whose act, neglect or default the owner
is responsible ; or
B
(ii) which is caused by the act neglect or default or any person
on board the vessel for whose act, neglect or default the owner r
is responsible :
~
Provided that the owner shall be entitled to limit his liability in
c respect of any claim arising out of any act, neglect or default as
is referred to in sub-clause (ii) only when the act neglect or
default is one which occurs in the navigation or the management
of the vessel or in the loading, carriage or discharge of cargo or
in the embarkation, carriage or disembarkation of the passengers.

D (2) The burden of providing that the occurrence giving rise to a
claim against the owner of a vessel did not result from his actual
fault or privily sl1all be on the owner".\... ""-
Under Section 3528, the limit of liability is fixed on the basis of
the tonnage of the vessel.
E Under Section 352C, sub-sections (I), (2) and (3) are as follows:-

"Section 352C:
(I) Where any liability is alleged to have been incurred by the
owner of a vessel in respect of claims arising out of an occurrence
F and the aggregate of the claims exceeds or is likely to exceed the
limits of liability of the owner under Section 3528, then the
I_
owner may apply to the High Court for the setting up of a
limitation Fund for the total sum representing such limits of
liability.

G (2) The High Court to which the application is made under sub-
section (I) may, determine the amount of the owner's liability
and require him to deposit such amount with the High Court or
.I..
furnish such security in respect of the amount as in the opinion
of the High Court is satisfactory and the amount so deposited
"
or secured shall constitute a limitation Fund for the purposes of
H the claims referred to in sub-section (I) and shall be utilised only
WORLDT"""L\llRIERCORPN ,. SNP SHIP SERVICES P\l LTD \SUJATA \' MANOHAR. J] I049

for the payment of such claims. A
(3) After the Fund has been constituted, no person entitle to claim
against it shall be entitled to exercise any right against any other
assets of the owner in respect of his claim against the Fund. if
that Fund is actually available for benefit of the claimant.
B

Under Section 352F, for the purposes of Part XA, the provisions
relating to limitation of liability of an owner of a vessel shall apply also to
a charterer, manager and operator of the vessel and to the master, members C
of the crew and other servants of the owner, charterer, manager or operator
acting in the course of their employment. Section 352F (I) is as follows:

"Section 352F :
(l) Subject to the provisions of sub-section (2), the provisions of D
this Part relating to limitation of liability of an owner of a vessel
in respect of claims arising out of an occurrence shall apply to
the charterer, manager and operator of the vessel and to the
master, member of the crew and other servants of the owner,
charterer, manager or operator acting in the course of their
employment in the same manner as they apply in relation to the E
owner.
Provided that the total limits of liability of the owner and all
other person:. referred to in this sub-section in respect of personal
claims arising on a distinct occasion shall not exceed the amounts
determined in accordance with the provisions of section 352B". F

Part XA does not deal with or contain provisions relating to vessels.
It deals with the personal right of an owner qf the vessel to limit his liability G
in respect of claims against him arising out of an "occurrence" to his ve:;sel.
It is a right in personam that he seeks to enforce against the claimants.
Therefore, Sections 2 and 3(15) of the Act do not apply to his action. Part
XA which deals with limitation actions also does not contain any express
provision of the kind contemplated by Article 7 of the Brussels Convention,
1957. H
1050 SUPREME COURT REPORTS [I 998] 2 S.C.R.

A A limitation action as in the present case, falls under the High Court's
Admiralty jurisdiction. But a limitation action, though filed in Admiralty, is not
against a vessel. It is a protective action against claims which may be filed
by others against owner of the vessel in admiralty jurisdiction. Therefore, a
plea of limitation can be taken as a defence by the owner in an action in
B admiralty filed against him by the claimant against him and his ship. Hence,
the court having jurisdiction to entertain an admiralty action against the
vessel of the owner has jurisdiction to set up a limitation fund for the owner.
· Similarly, if the owner initiates the "defensive" action in limitation, the court
which has jurisdiction to entertain a liability claim will have jurisdiction to
entertain the limitation action. If a liability claim is already filed, that court will
C have jurisdiction over limitation action also. But claims may be several, and
they may be actually filed or may be apprehended. Any court where such a
claim is filed or is likely to be filed will have jurisdiction to entertain a
limitation action. The court of domicile of the owner and the ship is a court
where such a claim is likely to be filed. Therefore, that court will also have
jurisdiction. Out of these, the owner has the option to choose his court for
D filing a limitation action.

Is there any other court which will have jurisdiction? Learned counsel
for SNP drew our attention to Clause 12 of the Letters Patent, Section 20(2)
of the Civil Procedure Code and Section 3(15) of the Merchant Shipping Act
E and submitted that the court within whose jurisdiction a part of the cause of
action arises is a court having jurisdiction in a limitation action.

As earlier stated, Section 3(15) has no application to a Limitation action.
Clause 12 of the Letters Patent also has no application because a limitation
action is governed by Clause 32 of the Letters Patent and not Clause 12. For
F the same reason, Section 20 of the Civil Procedure Code will not govern the
admiralty jurisdiction of a chartered High Court regulated by its letters patent.
A limitation action in admiralty jurisdiction cannot be filed in a court where
a part of the cause of action arises when all claimants who are defendants
to the action are foreigners who reside outside India, who do not carry on
G business in India and who have not submitted to the jurisdiction of any court
in India, and have not filed a liability action here and are not likely to do so.

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
H subsequently, transposed as plaintiffs are foreign companies or foreigners.
WORLDTANKERCARRIERCORPN ...SNPSHIP SERVICES PVT LTD [SlJJATAV MANOHAR,J.] 1051

The claimants are some of the defendants. They are all foreigners. Other A
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 B
Mwlaya 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 filed there since all claims are
already filed before the courts in the U.S.A. The Bombay High Court has, C
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 D
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 E
the vessel YA Maw la ya 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, F
this does not confer jurisdiction on the High Court in an admiralty action of
the present type.

In the present case the collision which gave rise to the owner's liability
has occurred on the high-seas off the coast of Portugal. Neither of the vessel G
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 confer jurisdiction. H
1052 SUPREME COURT REPORTS (1998) 2 S.C.R.

A More(\)ve~, when the right to set up a limitation fond 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
B 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
C country.

The entire course of conduct appears to be a deliberate attempt on the
pa1t 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 YA mawlaya in the Courts of the United States prior
D 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 others.

Admiralty Suit No. 28 of 1996 is filed by Kara Mara for the purpose of
E setting up a limitation fund and to obtain an anti-suit injunction in respect
of all pending litigations against it in foreign courts. In the case of Kara Mara
which is a foreign company registered in Cyprus, no part of the cause of
action has arisen within the jurisdiction of the Bombay High Court. The
vessel which met with the collision giving rise to liability is a foreign vessel.
The collision took place in the high seas off the port of Portugal. All the
F claims against Kara Mara have been filed in foreign courts and the claims
which have now been filed before the Bombay High Court are not the claims
which can be subjected to limitation.

Kara Mara, however, claims jurisdiction on the ground that its vessel
YA Mawlaya was in the Bombay harbour at the time when it filed its suit for
G limitation. Reliance is placed on Section 2(2) of the Merchant Shipping Act
for this purpose. Section 2(2), however, has no application to a limitation
actic.n per se, as stated earlier. A limitation action is not directed against the
ship nor can the action be instituted by the arrest of the foreign vessel
present in the territorial waters of the country where the action is instituted.
H It is an action by the owner acting personally against his claimants who are
WORLD HNKERC•RRIER CORPN. dNP SHIP SERVICES PVT LTD [SUJATA V MANOHAR, J] 1053

seeking damages in respect of the loss or injury caused by the owner's A
vessel. Therefore, the presence of a foreign vessel in the territorial waters will
...... notl give the court jurisdic~lon to entert11in a limitation action by its owner
uni ss the presence of the foreign vessel has given rise to an admiralty action
by a cl!imant in that court. which claim is subject to limitation, or the presence
,
of the vessel has created· a likelihood of such action being taken there, or the
court is a domi~iliary court of the owner attracting such claims there. That is B
y not the case here. In fact, at the time when Kara Mara filed the suit all claims
were already filed against it in the foreign court at New Orleans, U.S.A. No
doubt Kara Mara had challenged the jurisdiction of that court and had
succeeded in the first round. But that was by no means a final adjudication.
Nor can one legitimately conclude from this the likelihood of claims being filed c
in Bombay. Jn the present case, the Bombay High Court is not the domiciliary
court of Kara Mara or its vessel. Nor is any claim for liability which can be
limited, filed against Kara Mara in the Bombay High Court. None of the
defendants to the suit is within the jurisdiction of the Bombay High Court.
The fortuitous presence of the ship in the Bombay harbour will not entitle the
owner to file a limitation action in the Bombay High Court in the absence of D
_/ any claims being made or apprehended against him or the vessel in that court.

Therefore, bringing the ship to the Bombay port, in order to confer
jurisdiction on the Bombay High Court, has the character of forum shopping,
rather than anything else.
E
The presence of a foreign defendant who appears under protest to
contest jurisdiction, cannot be considered as conferring jurisdiction on the
court to take action. Unless a foreign defendant either resides within jurisdiction
or voluntarily appears or has contracted to submit to the jurisdiction of the
court, it is not possible to hold that the Court will have jurisdiction against F
a foreign defendant. See in this connection R Viswanathan v. Rukn-u/-Mulk
""' Syed Abdul Wajid, [1963] 3 SCR p. 22 at p. 51, and Raj Rajendra Sardar
Maloji Marsingh Rao Shitole v. Sri Shankar Saran & Ors. [1963] 2 SCR at
p.77 at pp. 587-588. This factor also, therefore, is against the respondents in
the present appeals.
G
The Bombay High Court, therefore, should not have entertained the two
admiralty suits.
,~
C.A. Nos. 8535 and 8536 of 1997 pertain to contempt proceedings taken
against the appellant in the Bombay High Court. The respondents have
strongly contended that an order passed by a High Court even though it may H
1054 SUPREME COURT REPORTS [1998] 2 S.C.R.

A be without jurisdiction must be obeyed. If such an order is disobeyed it
amounts to contempt of court and proceedings can be taken in that connection
against the contemnor. The respondents cite in support, the decision of this
Court in Tayabbhai M. Bagasanrnlla & Anr. v. Hind Rubber Industries Pvt.
ltd. & Ors., [1997] 3 SCC 443. There is no doubt that the conduct of the
B appellant in the various proceedings which have taken place before the
Bombay High Court leaves much to be desired. Had the appellant initially filed
appearance under protest to contest jurisdiction, all these problems would not
have arisen. The Bombay High Court itself, however, in its order dated 20/
21-8-1997, after severely commenting on the conduct of the appellant, has
allowed the appellant to defend the proceedings on condition that the appellant
c would, in future, obey the orders of the Bombay High Court. We, therefore,
do not find it necessary to examine the questionable conduct of the appellant
in the proceedings before the Bombay High Court. In view of our finding that
the High Court has no jurisdiction to entertain the two admiralty suits, the
future conduct of the appellant in these proceedings now becomes irrelevant.
D
The impugned order of 21st of November, 1997 which is the subject-
matter of Civil Appeal No. 8536 of 1997 is also for the purpose of securing
the compliance by the appellant of the orders of the High Court which may
be made against the appellant. The Division Bench had a justified apprehension
E about the appellant not complying with the orders of the High Court in view
of the past conduct of the appellant. The Division Bench, therefore, felt that
the best way of securing compliance of its orders by the appellant in future
would be to direct the appellant to bring into the court the money which it
had received from New Castle, the insurers of Kara Mara. As the question
F of the appellant's obeying any further orders of the court will not now arise.
the order of 21-11-1997 also now becomes purposeless.

We, therefore, allow Civil Appeal Nos. 8535 of 1997 and 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
G are necessary in that connection. We, however, make it clear that if the
respondents 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
H in accordance with law.
WORLD TANKER CARRIER CORPN. "· SNP SHIP SERVICES PVT LTD. [SUJATA V. MANOHAR, J] \ 055

In view of the above, the appeals arising from S.LP.(C) Nos. 3 and 4 of A
1998 are also allowed and the impugned order of 4th of December, 1997 in
both the admiralty suits is set aside. All the appeals are accordingly allowed.
Looking to the conduct of the appellant and the totality of circumstance, there
will, however be no order as to costs.

v.s.s. Appeals allowed.
B