ORDER SHEET
IN THE HIGH COURT OF SINDH AT KARACHI
Admiralty Suit No.02 of 2009
M/s Megafeeder (Pvt.) Limited
Versus
M.V. H & H Tide & another
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Date |
Order with signature of Judge |
1. For orders as to maintainability of the pending application vide Court’s order dated 20.10.2016
2. For hearing of CMA 242/2009
3. For hearing of CMA 216/2009
4. For hearing of CMA 305/2009
Date of hearing: 30.11.2016
Mr. R.F. Virjee for plaintiff.
Mr. Shaiq Usmani for defendants.
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Mohammad Shafi Siddiqui, J.- Plaintiff has filed this suit for recovery of US $4,487,373.31 equivalent to Pak Rs.354,502,491.49 against the defendants along with interlocutory applications seeking arrest of the defendant No.1 vessel and injunction against the containers lying on the vessel.
The defendants have also filed an application under rule 743 of Sindh Chief Court Rules (OS) read with Order VII rule 11 CPC for release of the amount deposited by defendant No.2 and for release of defendant No.1 vessel. Since this application pertains to jurisdiction of this Court, I intend to dispose it off first.
Plaintiff claimed to have incorporated for carrying out extensive business of shipping along with other associated companies whereas defendant No.2 is claimed to be owner/charterer of vessel M.V. H & H TIDE, which is defendant No.1 in the suit. The plaintiff has filed this suit under admiralty jurisdiction in pursuance of Admiralty Jurisdiction of High Courts Ordinance, 1980.
It is claimed that in pursuance of a Memorandum of Understanding dated 01.07.2006 signed by Mr. Mansoor Haris of defendant No.2 and plaintiff a proposal for Joint Venture Holding Company was proposed to be formed in Dubai U.A.E. with their respective shareholdings. Business of the proposed company was to acquire and charter vessels to meet object of joint venture holding company. However, it was not materialized. It is claimed that huge investment was made by the plaintiff in acquisition and collection of large number of containers by way of acquiring/rental etc. It is claimed to have been handed over to defendant No.2 at Dubai for the exclusive use of the Joint Venture Company. It is in pursuance of such missing containers that this claim is lodged under Admiralty jurisdiction.
It is argued by counsel for the plaintiff that any claim in respect of goods or material supplied to a ship for her operation and maintenance comes within the frame of Section 3(2)((h) and (j) of Admiralty Jurisdiction of High Courts Ordinance, 1980. He further relied upon the judgment reported in NLR 1982 (Civil) 57 and highlighted the necessaries of containers for transportation of the goods. He further relied upon AIR 1988 Andhra Pradesh 331, PLD 1981 Karachi 419, AIR 1996 SC 516, AIR 1995 Bombay 281, 2012 CLD 1319.
Learned counsel for plaintiff further submitted that in view of above facts and circumstances the application filed by defendants No.1 and 2 jointly bearing CMA No.305 of 2009 for the release of the security is misconceived, malafide and is made only to deprive the plaintiff from its lawful claim. It is urged that earlier after hearing the matter at length the defense counsel has suggested to provide security to enable the Vessel to sail hence at this stage the application under consideration cannot be allowed when the vessel has already sailed.
On the other hand learned counsel for defendants submitted that no order was passed in pursuance of CMA No.216 of 2009 being an application under Rule 731 of Sindh Chief Court Rules for arrest of the vessel i.e. defendant No.1; instead this Court directed that if security in the sum of US $.3 lac is furnished, the vessel will be allowed to sail. He contended that vide order dated 04.03.2009 this Court made it clear that this arrangement is without prejudice to the defense taken by the defendants in this case. He further submitted that providing a security would not preclude the defendants from contesting their matter in accordance with law.
He further argued that for the purposes of these proceedings he is not contesting as to the necessaries as far as alleged containers are concerned but he claimed that these containers were not supplied to the vessel itself and has relied upon Section 3(2)(l) of the Admiralty Jurisdiction of the High Court Ordinance, 1980. He has also relied upon the case of House of Lords i.e. ([1998] Vol. 2) in relation to a ship “The River Rima”. He relied upon the contents of the plaint as well as the alleged agreement/Memorandum of Understanding which is executed by plaintiff with defendant No.2 and not with defendant No.1. In paragraphs 5 and 10 of the plaint these containers are claimed to have been handed over to the defendant No.2. Plaintiff also claimed to have released some containers, which were being utilized on the vessel, to defendant No.2 who was charterer or owner. However, the subject matter of this suit are 140 containers which are not returned by defendant No.2. In Para 14 as well it is claimed that defendant No.2 has no intention to return balance remaining containers to the plaintiff. Counsel for defendants in view of these submissions prayed for the grant of the application in hand.
I have heard the learned counsel and perused the material available on record.
It is necessary to first understand the admiralty jurisdiction of this Court in pursuance of claim of plaintiff as arising out of Section 3 of Admiralty Jurisdiction of High Court Ordinance, 1980. Section 3(2)(h)&(l) is relevant for the present controversy, which is reproduced as under:-
“(h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship.
(l) any claim in respect of necessaries supplied to a ship.”
Clause (h) relates to a claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship. The scope of the agreement i.e. Memorandum of Understanding would play an important role in understanding as to whether any of the clauses such as (h) and (l) of subsection 2 are within its frame. This Memorandum of Understanding in relation to a company for supply of containers was executed between plaintiff and defendant No.2 who claimed to be owner/charterer of the Vessel i.e. defendant No.1. This Memorandum of Understanding is in fact an agreement of the proposal that they would invest in the new entity as a Joint Venture Holding Company in UAE and that the capital of the Joint Venture Holding will be contributed by both the parties i.e. plaintiff and defendant No.2 in the ratio, as suggested therein. The contribution for this Joint Venture Holding is also described in the Memorandum of Understanding. The contribution by Megafeeder Pakistan does not include the fleet of containers, which is claimed to have been provided to defendant No.2. On the contrary it is H & H FZc who claimed to have contributed the available fleet of containers owned or leased for being used by MCL LLC in terms of Clause 12.2.2 of Memorandum.
Firstly this agreement is not an agreement relating to “carriage of goods” in a ship. The claim is arising out of supply of containers, which is not the scope of the clause (h) of subsection 2.
As far as the claim in pursuance of clause (l) is concerned, there is no cavil to this proposition that containers form necessaries of a ship and any claim arising out of such necessaries may form subject matter of claim under admiralty jurisdiction. However, these necessaries ought to have been supplied to a ship for exercising such jurisdiction. Admittedly the agreement/Memorandum of Understanding relied upon was executed between defendant No.2 and plaintiff and not with the ship. Expression used in clause (l) of Section 3(2) necessitated that it ought to have been supplied to ship rather than ship owner or charterer. The subject contract amongst others is for supply of goods or material to the ship owner as such does not form part of the admiralty jurisdiction. The case of Rivera Rima (supra) is perhaps the case which attracts to the facts and circumstances of the present case. The action in pursuance of such jurisdiction could only be brought against a particular ship had there been a contract of such supply of necessaries to the ship.
The order dated 04.03.2009 is also perused and it seems to be very relevant and important. For exercising admiralty jurisdiction the case is to be made out in terms of Section 3 of Ordinance 1980 and prima facie no claim appears to have been made out as against defendant No.1 under admiralty jurisdiction. The question now arises is whether defendant No.2 who was prepared to deposit US $.300,000/- with the Nazir of this Court was in lieu of the claim against defendant No1 or defendant No.2 stood surety for itself as well. The order referred above is clear in this regard. The defendant No.2 deposited the subject amount against arrested vessel and it is not a surety against defendant No.2 otherwise this amount could have been withhold. The amount that was deposited thus could only be considered as a surety for defendant No.1 vessel for which prima facie the case has not been made out.
In view of the above, I am of the opinion that the claim of the plaintiff does not fall within the admiralty jurisdiction of this Court and as a consequence thereof application (CMA No.305 of 2009) to the extent of release of surety is allowed whereas prayer of rejection of plaint is disallowed while the application for arrest of vessel filed by the plaintiff (CMA No.216 of 2009) is dismissed as having become infructuous. The suit may proceed under ordinary civil jurisdiction.
Dated: Judge