Gujarat High Court Orders Arrest of Bulk Carrier at Kandla Port in Maritime Dispute
The Gujarat High Court has issued a significant order directing the Port Officer and Customs Authorities at Kandla Port to arrest and keep under arrest until further orders a bulk carrier vessel involved in a maritime dispute concerning short delivery of cargo to a Vadodara-based pharmaceutical company. This directive comes as part of an Admiralty Suit filed by Nandesari Drugs and Pharmaceuticals Pvt. Ltd.
Substantial Costs Imposed to Prevent Arrest Execution
In a crucial development, the High Court has imposed a total cost of Rs 2.89 crore on the defendants who have an interest in the vessel. This financial imposition serves as a mechanism to ensure that the warrant of arrest for the vessel is not executed. The court specified that if this amount is deposited, the arrest warrant against the defendant vessel shall not be carried out.
Justice N R Mehta delivered an oral order on Friday, instructing the court Registrar to issue a warrant for the arrest of the vessel MV Nikator (IMO 9544372). The comprehensive arrest order covers the vessel along with her hull, engines, gears, tackles, bunkers, machinery, apparel, plant, furniture, equipment, and all appurtenances currently located at Kandla Port within Indian territorial waters.
Detailed Breakdown of the Imposed Costs
The court order provides a meticulous breakdown of the Rs 2.89 crore amount:
- Principal amount of Rs 1,98,93,800 towards short delivery of cargo
- Rs 15,69,222 towards customs duty, social welfare surcharge, and taxes
- Rs 75,00,000 towards legal costs
The order further stipulates that this amount must be accompanied by additional interest at the rate of 18 percent per annum from the date of the suit until payment, as per the particulars of the claim.
Background of the Cargo Dispute
The maritime dispute originated when Vadodara-based Nandesari Drugs and Pharmaceuticals Pvt. Ltd, a manufacturer of quality APIs, purchased Bright Yellow Crude Sulphate in Bulk from Komoditas Trading FZC LLC. The cargo was loaded at Sohar Port, Oman, in three separate sets with original bills of lading dated January 21.
According to court documents, the bills of lading evidenced carriage of:
- 3,250 metric tons (Bill of Lading No. 1)
- 3,250 metric tons (Bill of Lading No. 2)
- 3,300 metric tons (Bill of Lading No. 3)
The total cargo loaded on the defendant vessel was confirmed as 9,800 metric tons by the Master of the vessel through the issuance of bills of lading. The plaintiff company completed payment and formalities based on this confirmed quantity.
Discovery of Cargo Shortage and Legal Proceedings
Upon the vessel's arrival, when the plaintiff submitted the bills of lading to obtain delivery and weighed the cargo at the shore, they discovered a shortage of 407.3 metric tons. The plaintiff immediately sought clarification by sending an email to the vessel's agents on January 28 regarding this shortage.
Senior Advocate Devang Nanavati, representing the plaintiff, argued that the short delivery of cargo directly resulted in the suit and claim. The plaintiff submitted to the court that the defendants were in flagrant breach of their obligations, causing significant losses that the vessel owners must compensate.
Court's Administrative Directions
The Gujarat High Court has directed its Registry to send the order to the Port and Customs authorities at Kandla Port via email for immediate implementation. Additionally, the court has issued a notice to the defendants, making it returnable on February 6, thereby setting a timeline for further proceedings in this maritime legal matter.
This case represents a significant application of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, highlighting how Indian courts are addressing complex international maritime disputes involving commercial cargo transactions and vessel arrests as security for maritime claims.
