MARITIME LIEN

A “maritime lien” is a claim or privilege upon a maritime res1 in respect of service

done to it or injury caused by it. It does not require possession of the res , for it is a claim or
privilege on the res to be carried into effect by legal process. A maritime lien travels with the
res into whosoever possession it may come, that is, it exists independently of the possession
of the object over which it is claimed but it is attached to it in the sense that it is unaffected
by change of ownership or registration. There can be no maritime lien upon a res which is not
a ship or her apparel or cargo. A maritime lien only attaches to the particular res in respect of
which the claim arises and not to any other property of the owner. Maritime Lien is very
unique it is very different from contractual lien. It is known as the right in rem i.e. a right
enforceable against the whole world as opposed to right in personam i.e. against a particular
person (or the owner).
The concept of maritime lien has its origin in the peculiar character of the ship both in
her capacity as an asset to the owner and with regard to the events that she may encounter in
the course of her career. A ship as a rule represents an unusually large proportion of the
owner’s general property; it may frequently cause unforeseeable damage by collision or
otherwise and nobody can forecast when the ship might need unexpected assistance from
strangers when encountering perils of the sea. Besides, a ship is an evasive sort of property
which may slip out of the hands of a person. The owner may be far way, his financial
standing unknown and the courts of the country of registry may be inefficient or expensive to
approach. All these factors have led to the concept of “maritime lien” by which the injured
party is enabled to make the vessel herself available as security for his claim.
A maritime lien takes precedence over the claim of a mortgagee in respect of a
mortgaged ship.2 The claims which are usually accepted as maritime lien are wages and other
sums, (due to the officers and crew of a vessel in respect of their employment on the vessel)
public charges, (like the tonnage dues, harbour dues and pilotage dues etc.) salvage,
contribution to general average contribution, claims in respect of loss of life or personal
injury, claims for damage etc arising out of tort. The seller of a ship may have a possessory
lien for the unpaid purchase price and a ship repairer may have a similar lien for repairs done
on the vessel.
1
In the civil law, the term res signify a thing or an object. (Conscise Law Dictionary, 2007)
2
Making the ship available as a security for money borrowed is mortgage. This is a charge or encumberance
which the borrower of money, the mortgagor, creates in favour of the lender, the mortgagee. It allows the
mortgagor to continue his business as a going concern and at the same time subjects the mortgaged property to
some sort of control by the mortgagee which enables him to take possession and realize the security as soon as
the owner (mortgagor) defaults in the payment of debt.
 Maritime lien is a common law concept and in many countries including India there is
no specific legislation dealing with maritime liens. India has been following the laws of the
UK in this respect and courts in India, having admiralty jurisdiction, are competent to deal
with cases pertaining to maritime liens.
The municipal laws of the maritime countries on maritime liens and mortgages differ
from country to country. Attempts have been made at international level to unify the
customary rules relating to maritime liens and mortgages. An international convention on the
unification of certain rules relating to maritime liens and mortgages was adopted in 1926. It
has not been ratified by India and also not ratified by major maritime countries like the UK,
US, Japan, W.Germany, Netherlands and USSR (Nagendra singh, 1979 p. 35). An amended
convention was adopted at Brussels in 1967, this also was not ratified and not in force.
A ship may be arrested under an authority of a court for any maritime claim. Maritime
lien attaching to the vessel at the time of the arrest have priority over other claims for which
the ship is arrested.
Lien for Salvage: Certain claims have automatic maritime lien as soon as they arise
e.g. salvage. The lien for salvage is created by the rendering of salvage service to a maritime
res or in certain circumstances, by saving of life from the ship. The lien attaches to the ship,
freight and cargo severally but not jointly, and each is liable to contribute towards the salvage
in proportion to its value. The lien accrues immediately upon the performance of the salvage
services and attaches to the salved vessel, her cargo and freight. It is unaffected by any
change in the ownership or possession of the salved property, and the benefit of it can be lost
only by the laches of the salvor. Among themselves if there are more than one set of salvors,
they rank inversely to their order of rendering service. The second salvors claim should take
precedence over the first ‘salvors’ claim, if there are two sets of salvors to the ship, because it
is the services of the last set of salvors, which has conserved the ship and saved the
adventure.
Lien for General Average Contribution: The jettisoned3 cargo has a lien on the ship
for any general average contribution4 due to the cargo from the ship. General Average loss is
a loss voluntarily and reasonably incurred in time of peril for the safety of the joint adventure

3
The defense of jettison is opened to the ship-owner where the goods have been intentionally sacrificed in order
to preserve the safety of the ship and cargo. In this case the ship-owner is not liable to the owner of the goods
for the damage, but the matter is governed by the law of general average.
4
The principle of the law of General Average is that when any part of the cargo or of the ship is deliberately
sacrificed in order to preserve the ship and cargo as a whole, all the parties whose goods were preserved by the
sacrifice shall contribute to the loss suffered by the owner of the goods sacrificed. The loss is known as general
average loss and the contribution is known as general average contribution.
which is contributed to by the owners of all property saved, e.g. ship, freight and cargo. The
general average loss would include (i) sacrifices (ii) expenditure.
The losses admissible in general average are assessed and apportioned over the net
arrived values of the property saved plus the value of the sacrificed property and a final
balance due to or from each party is arrived. This process is called the general average
adjustment and is generally governed by York Antwep Rules which have received
international acceptance and which are being followed by the leading shipping and insurance
interests throughout the world.
Lien for wages: The crew has a lien on the ship for their wages. The lien for the
wages of the master and seamen attaches to the ship and freight and every part thereof,
provided their wages have been earned on board the ship under an ordinary mariner’s
contract. This lien does not dependent on the earning of freight. For a lien on freight is
consequential to the lien on the ship. The lien on wages travels with the res into whosoever
possession it may come.
Lien for damage done by a ship: The lien for damage done y a ship arises when
damage is done by the ship to another ship or property, whether on the high seas or in the
body of a country, through some wrongful act of navigation of ship from want of skill or
from negligence of the persons by whom she is navigated. The moment the damage is done
by the ship the lien attaches to her hull, tackle, apparel, furniture and freight. It does not
originate in possession and it follows the ship into whosesoever possession it may pass, and
continues even after the ship is wrecked, and may be enforced against the wreckage. The lien
on freight can however, only be enforced in company with the enforcement of a lien on the
ship, being consequential to that lien.
The damaged cargo has lien against the ship if, under the appropriate statute
governing the relationship between the owner and the shipper, the owner is not exempt from
liability from the particular damage.
These liens have priority over mortgages on the vessel, which are contractual in
nature. The theory is that the mortgaree is at best only an assignee of the rights of the owner.
The lien arises as a result of maritime adventure, which the owner undertakes with the
consent and knowledge of the mortgagee. Liabilities arising out of such an adventure should,
therefore, have precedence over the rights of the mortgagee.
The terminology used in Admiralty Courts is different from the terminology used in
civil courts. A complaint is called “libel”, plaintiff is the “libellant” and the defendant is the
respondent. Most of the Admiralty libels are “libels in rem”. An in rem proceeding is
proceeding against a thing. In Admiralty cases the thing involved is the vessel. Any person
who has a proper lien on the ship can file a libel in the Admiralty Court and take a vessel into
constructive custody. Generally the owner of the ship appears before the court in such cased
and by giving a bond to the satisfaction of the Court gets the ship released from custody. In
case where an owner is not able to do so, the ship will be sold in public auction after the lien
is established. Such sale by the court transfers to the ship the title “good against the world”. A
judicial sale by Admiralty court makes the ship free of all liens even if other claimants did
not have proper notice. Such sale may take place in any part of the world. By convention, all
Maritime Courts of the world recognize such sale as valid.
Admiralty Court do nor rule out libels in personam, i.e suits against a named
corporation or person asserting personal liability. Because there is difficulty in the case of
Maritime claims to get jurisdiction over the owners who might live in foreign lands. It is
comparatively easier to get jurisdiction over the vessel in rem proceedings as long as the
vessel is within the territorial waters of the particular Admiralty Court. Libels in rem can be
filed only in respect of claims that have a maritime lien. There is a maritime lien even in
respect of claims for damages arising out of breach of provisions of a Charter Party. It is
important that persons with maritime lien should enforce their claims immediately. Otherwise
persons with subsequent lien may take priority over them owing to the peculiarities of
maritime law. If the ship passes into the hands of bonafied third party purchaser, unless the
lienor acts with extreme diligence, his lien may become unenforceable.
ARREST OF SHIP
The arrest could be effected in respect of claims arising out of normal commercial
transactions. The purpose of the arrest is only to secure the continued presence of the ship
and to prevent her from slipping away. There is an international convention relating to the
arrest of ship which was signed in Brussels in 1952. This convention deals with the right of
coastal states to arrest seagoing ships registered in other countries for maritime claims. The
convention lists the claims in respect of which a ship can be arrested. The ship to be arrested
may either be the same ship in respect of which the claim arose or any other ship belonging to
the same owners which happens to be in the jurisdiction of the court. But in respect of claims
arising out of construction repairs, or equipment of any ship or dock charges and dues,
disputes as to the title or ownership, possession, employment or earnings of the ship or
mortgage or hypothecation, only the ship in respect of which the claim arose can be arrested.
India has not yet ratified this convention but arrest of ship could be effected in India
by courts having Admiralty Jurisdiction. The Colonial Courts of Admiralty (India) Act 1861
vests admiralty jurisdiction in the High Courts of Bombay, Calcutta and Madras. But in UK
the Admiralty Act was repealed with the enactment of the Administration of Justice Act,
1956, the Admiralty Law has been brought in line with the modern law and practices
followed by most countries, India is still following the antiquated law made by England.
A foreign vessel, no matter what flag she flies, owes temporary and local allegiance to
the sovereign of any port to which she comes. Moreover, the persons in such a vessel
likewise must obey the laws and regulations of the port. Such jurisdiction is discretionary.
Once a foreign vessel passes out of territorial waters, she owes no further duty to the place,
which she has left, unless there is a hot pursuit. However, her conduct on the high seas or in
foreign ports may subject her to penalties on returning on a subsequent visit.
All foreign merchant ships and persons thereon fall under the jurisdiction of a coastal
State as they enter its waters. Subject to the right of "innocent passage", the coastal State is
free to exercise its jurisdiction over such ships in respect of matters on which the
consequences extend beyond the ships. Such ships are subject to the local jurisdiction in
criminal, civil and administrative matters. This jurisdiction is, however, assumed only when,
in the opinion of the local authorities, the peace or tranquility of the port is disturbed, when
strangers to the vessel are involved or when the local authorities are appealed to. Questions
which affect only the internal order and economy of the ship are generally left to the
authorities of the flag State. Coastal States are entitled to assume jurisdiction in respect of
maritime claims against foreign merchant ships lying in their waters. These ships are liable to
be arrested and detained for the enforcement of maritime claims. The courts of the country in
which a foreign ship has been arrested may determine the cases according to merits, provided
they are empowered to do so by the domestic law of that country or in any of the cases
recognised by the International Convention relating to the Arrest of Seagoing Ships, Brussels,
1952.The maritime claims in respect of which the power of arrest is recognised in law
includes claims relating to damage caused by any ship either in collision or otherwise; claims
relating to carriage of goods in any ship whether by charter party or otherwise, loss of or
damage to goods etc. These principles of international law, as generally recognised by
nations, leave no doubt that, subject to the local laws regulating the competence of courts, all
foreign ships lying within the waters of a State, including waters in ports, harbour,
roadsteads, and territorial waters, subject themselves to the jurisdiction of the local authorities
in respect of maritime claims and they are liable to be arrested for the enforcement of such
claims.
3.1.1. SHIP-OWNERS OBLIGATION TO PROVIDE SEAWORTHY SHIP
 A ship is deemed to be unseaworthy if she is in such a state as to imperil lives or
cargo at sea. A vessel may be rendered unseaworthy due to variety of causes among which
the British Merchant Shipping Act, 1894, names three principal ones: 1) overloading or
improper loading; 2) defective condition of the hull, equipment or machinery; 3) under-
manning of the ship.
The most vital aspect with regard to seaworthiness, however, is undoubtedly the
obligation of the ship-owner himself, and of his agents, to ensure that his vessels are
seaworthy at the commencement of a voyage. It was to be their duty to send their ships to sea
in a seaworthy state and any unjustifiable negligence in the discharge of this duty would
amount to an offence.
The following paragraph peeps into the historical background of the development of
laws with respect to unseaworthy ships.
In the mid nineteenth century there were few rules and regulations and there were
virtually no rules governing construction and safety standards, crews and their employment
conditions, pollution etc. Many ships were badly built, ill found and grossly overloaded.
These ‘coffin’ ships ‘frequently took their unfortunate crew to the bottoms of the oceans of
the world’ (Stopford).
In due course other laws were introduced as they became necessary, and Great Britain
built up a body of maritime law, which was specifically geared to tackling the problems that
arise when a nation state operates an extensive merchant shipping fleet. Other countries
developed their own laws on a piecemeal basis, though because Britain dominated the
maritime scene it was common for countries with a developing maritime interest to adopt
British law as a basis for drafting their own legislation. Thus, British rules and regulations
came to apply much more widely.
Merchant Shipping Acts 1871-1873
The early years of steam cargo vessels resulted in the loss of many lives. By 1855,
seamen of the UK were petitioning the Crown for protection in those cases where they
refused to serve on unseawrothy ships so that they might not be held liable in law for having
committed a breach of service. Their petition brought to the notice of Parliament the fact that
seafarers were exposed to the risk of loss of their lives due to the then prevalent use of
unseaworthy ships. There was a claim that had much evidence to support it. The Admiralty
Register of Wrecks and other Casualties to vessels which occurred on the seas and on the
shores of the UK during the 1854 showed that the causes of shipping causalities were mostly
related to unseaworthiness of ships. Further, the reports of prison authorities showed that
seamen were being imprisoned for deserting the ships although in many cases they were
justified in doing so on account of their ships being unseaworthy.
It was not easy for the seamen to fight for their rights and get an enactment passed
against their employers. The seamen’s’ cause was taken up by Mr. Samuel Plimsoll, a
commercial representative, pressurized the Board of Trade to introduce a Bill in 1870 in the
House of Common, it was not considered in that year5 again the Bill was introduced in 1871
but was not considered.6 Having failed to win over the House of Common to his proposal,
now sought to appeal to public opinion. His book entitled Our Seamen in 1873 cited the sorry
figures of loss of lives of seamen7 and claimed that number of such losses could be prevented
by implementing his proposals.8 The proposal of compulsory State survey of ship by
Mr.Plimsoll was rejected because it was not easy task to define the obligation of the owner to
send his ship to sea in seaworthy ship and to load her upto safe limits. There were many
touchy issues such as: a) the limiting of the loading of shipment meant less money in the
pockets of the ship-owners; b) an arrangement for a compulsory state survey would mean a
lot of harassment to ship-owners. Though there were system of compulsory State survey was
in force in France, Belgium and Italy. His proposal was rejected mainly because of the ship-
owners protest and their deputation met the Prime Minister on this subject. Agarwal, 1973
p.170). The immediate effect of the book was to render the subject of unseaworthy ships a
simmering public issue. His presentation of facts was not disputed and it was accepted that
there was considerable foundation of truth in the general statements of is book.(Agarwal 1973
p.162).
Under the Circumstances, a public inquiry into the subject of unseaworthy ships was
rendered necessary and the Government decided to appoint a Royal commission. The Royal
Commission on Unseaworthy Ship began their sitting at Easter, 1873. Pending their Report,
the Government strengthened the powers of the Board of Trade respecting unseaworthy ships
by enacting the Merchant Shipping Act 1873.
The 1873 Act authorized the Board of Trade to survey a ship on the grounds of it
being dangerous to the safety of persons on her board, due to defects in her hull, machinery,

5
The House of Common sympathized with the motives of Samuel Plimsoll but did not agree that there was any
urgency so as to call for legislation on unseaworthy ships in the 1870 Session. (agarwal, 1973 p.159)
6
It was stated that the Board of Trade neither had the powers to survey the overloaded ship nor stop them from
proceeding to sea. Moreover, the Board had no powers to survey upon the information of the ships own officers
but upon a formal complaint. No seamen would comeforward and launch a formal complaint against his
employer for fear of losing his job. Hence the proposal was not considered by the House of Commons. Agarwal,
1973 p.162
7
In 1871 more than 13,000 wrecks and casualties occurred, and 2040 persons died. Agarwal, 1973 p. 162.
8
His proposals were 1) compulsory survey of all merchant ships 2) provision for compulsory load lines.
equipment and to overloading. Further, the Board of Trade were empowered to survey such
ships on the information of their own officers without waiting for a complaint. The exercise
of such power helped check negligence and punish culpable ship-owners. The detention of
notoriously overloaded or otherwise seaworthy ships would gradually compel negligent ship-
owners to be more attentive or to abandon the trade; worthless vessels would be broken up
and the eventual weeding out of such ships would not only add to the safety of seafaring life,
but would be beneficial to the careful shipowners by way of an increase in business and a
reduction in insurance premiums.
Sending Unseaworthy Ship to Sea a Misdemeanour
And later the British Merchant Shipping Act 1873 was amended by 1876 Act which
provided that all persons who sent or participate in sending an unseaworthy ship to sea shall
be guilty of misdemeanour.9 This misdemeanour was punishable by fine or by imprisonment
not exceeding two years, with or without hard labour. In practice it was difficult for the
prosecution to prove that the ship was sent to sea in such an unseaworthy state. There was a
gap in the law as the law did not say that overloading itself rendered a vessel unseaworthy as
to prosecute under this law hence the law on this matter was changed in the Merchant
Shipping Act 1937 which made the act of sending or taking an overloaded ship to sea
punishable on indictment. (Agarwal, 1973 p. 173).

Power to detain unsafe ships

Under the British Merchant Shipping Act 1876 and 1894 the Board of Trade had
powers to detain unsafe ships and prevent them from proceeding to sea when the ship was by
reason of the defective condition of her hull, equipment or machinery or by reason of
overloading or improper loading. The Merchant shipping Act 1897 added another ground for
detention i.e. by reason of under-manning. This power was extended both to British as well
as foreign ships.
A ship is deemed to be unseaworthy if she is in such a state as to imperil lives or
cargo at sea. A vessel may be rendered unseaworthy due to variety of causes among which
the British Merchant Shipping Act, 1894, names three principal ones: 1) overloading or
improper loading; 2) defective condition of the hull, equipment or machinery; 3) under-
manning of the ship.

9
Misdemeanour means all indictable criminal offence causing public injury.
 The most vital aspect with regard to seaworthiness, however, is undoubtedly the
obligation of the ship-owner himself, and of his agents, to ensure that his vessels are
seaworthy at the commencement of a voyage. It was to be their duty to send their ships to sea
in a seaworthy state and any unjustifiable negligence in the discharge of this duty would
amount to an offence.
The following paragraph peeps into the historical background of the development of
laws with respect to unseaworthy ships.
In the mid nineteenth century there were few rules and regulations and there were
virtually no rules governing construction and safety standards, crews and their employment
conditions, pollution etc. Many ships were badly built, ill found and grossly overloaded.
These ‘coffin’ ships ‘frequently took their unfortunate crew to the bottoms of the oceans of
the world’.
In due course other laws were introduced as they became necessary, and Great Britain
built up a body of maritime law, which was specifically geared to tackling the problems that
arise when a nation state operates an extensive merchant shipping fleet. Other countries
developed their own laws on a piecemeal basis, though because Britain dominated the
maritime scene it was common for countries with a developing maritime interest to adopt
British law as a basis for drafting their own legislation. Thus, British rules and regulations
came to apply much more widely.
The early years of steam cargo vessels resulted in the loss of many lives. By 1855,
seamen of the UK were petitioning the Crown for protection in those cases where they
refused to serve on unseawrothy ships so that they might not be held liable in law for having
committed a breach of service. Their petition brought to the notice of Parliament the fact that
seafarers were exposed to the risk of loss of their lives due to the then prevalent use of
unseaworthy ships. There was a claim that had much evidence to support it. The Admiralty
Register of Wrecks and other Casualties to vessels which occurred on the seas and on the
shores of the UK during the 1854 showed that the causes of shipping causalities were mostly
related to unseaworthiness of ships. Further, the reports of prison authorities showed that
seamen were being imprisoned for deserting the ships although in many cases they were
justified in doing so on account of their ships being unseaworthy.
It was not easy for the seamen to fight for their rights and get an enactment passed
against their employers. The seamen’s’ cause was taken up by Mr. Samuel Plimsoll, a
commercial representative, pressurized the Board of Trade to introduce a Bill in 1870 in the
House of Common, it was not considered in that year10 again the Bill was introduced in 1871
but was not considered.11 Having failed to win over the House of Common to his proposal,
now sought to appeal to public opinion. His book entitled Our Seamen in 1873 cited the sorry
figures of loss of lives of seamen12 and claimed that number of such losses could be
prevented by implementing his proposals.13 The proposal of compulsory State survey of ship
by Mr.Plimsoll was rejected because it was not easy task to define the obligation of the owner
to send his ship to sea in seaworthy ship and to load her upto safe limits. There were many
touchy issues such as: a) the limiting of the loading of shipment meant less money in the
pockets of the ship-owners; b) an arrangement for a compulsory state survey would mean a
lot of harassment to ship-owners. Though there were system of compulsory State survey was
in force in France, Belgium and Italy. His proposal was rejected mainly because of the ship-
owners protest and their deputation met the Prime Minister on this subject. Agarwal, 1973
p.170). The immediate effect of the book was to render the subject of unseaworthy ships a
simmering public issue. His presentation of facts was not disputed and it was accepted that
there was considerable foundation of truth in the general statements of is book.(Agarwal 1973
p.162).
Under the Circumstances, a public inquiry into the subject of unseaworthy ships was
rendered necessary and the Government decided to appoint a Royal commission. The Royal
Commission on Unseaworthy Ship began their sitting at Easter, 1873. Pending their Report,
the Government strengthened the powers of the Board of Trade respecting unseaworthy ships
by enacting the Merchant Shipping Act 1873.
The 1873 Act authorized the Board of Trade to survey a ship on the grounds of it
being dangerous to the safety of persons on her board, due to defects in her hull, machinery,
equipment and to overloading. Further, the Board of Trade were empowered to survey such
ships on the information of their own officers without waiting for a complaint. The exercise
of such power helped check negligence and punish culpable ship-owners. The detention of
notoriously overloaded or otherwise seaworthy ships would gradually compel negligent ship-
owners to be more attentive or to abandon the trade; worthless vessels would be broken up

10
The House of Common sympathized with the motives of Samuel Plimsoll but did not agree that there was any
urgency so as to call for legislation on unseaworthy ships in the 1870 Session. (agarwal, 1973 p.159)
11
It was stated that the Board of Trade neither had the powers to survey the overloaded ship nor stop them from
proceeding to sea. Moreover, the Board had no powers to survey upon the information of the ships own officers
but upon a formal complaint. No seamen would comeforward and launch a formal complaint against his
employer for fear of losing his job. Hence the proposal was not considered by the House of Commons. Agarwal,
1973 p.162
12
In 1871 more than 13,000 wrecks and casualties occurred, and 2040 persons died. Agarwal, 1973 p. 162.
13
His proposals were 1) compulsory survey of all merchant ships 2) provision for compulsory load lines.
and the eventual weeding out of such ships would not only add to the safety of seafaring life,
but would be beneficial to the careful shipowners by way of an increase in business and a
reduction in insurance premiums.
Load Line Laws
Overloading was the most common cause of rendering a cargo ship unseaworthy.
Although the Board of Trade had this power, they were not provided with any rules by which
they should be guided at the time of taking a decision that the ship was unsafe by reason of
overloading and therefore should be detained. The British law provided marking of a line
beyond which the ship will not be loaded, if loaded it would render the unsafe, and would be
considered to be overloaded, such marking of line came to be known as load line. This was
proposed by Plimsoll hence it was also know as “Plimsoll Mark”. The load line was not a
fixed line but there were a table of line. Initially it was left to the ship-owner to decide the
load lines for different product themselves but later the Board of Trade came up with its table
of loadline which led to controversy. Whenever a ship was detain by the officers of the Board
on the ground that she was overloaded, differences of opinion arose between the ship-owners
and the officers as to the interpretation of proper loading and the measure of load line. To
settle this issue in 1884 a committee set up consisting of all interested parties.14 The
members of the committee jointly visited the principal ports and made observations relating
to the practice of loading. The members being professional persons closely acquainted with
the technical aspects of the question of safe loading, were able to observe the points at which
the general practice of loading lost sight of safety. Their visits to the ports also afforded them
an opportunity to confer with ship-owners, managers, masters, seamen and others connected
with shipping and to ascertain the general consensus as to what depths of safe loading should
be. Thus the Load Line Committee came up with the ‘Table of Freeboards’ which
recommended three load lines: one for summer, one for winter and one for North Atlantic
winter voyages. The duties of the Board of Trade in respect of overladen ships were very
much simplified with the Table of Freeboard at their disposal and indeed the difference of
opinion as to the safe load line between themselves and the ship-owners thus came to an end.
Although the Load Line question was settled and the Board acted in accordance with the
Table of Freeboards prepared by the committee, there provisions had to be incorporated into
a legislative enactment. Consequently, on the recommendation of Board of Trade and further

14
The committee consited of representative from the Board of Trade, Lloyds Registries, Liverpool Registries,
the Institute of Naval Architects, the Admiralty, ship-builders and ship-owners. The Committee was chaired by
one of the most distinguished naval architects of that time, Sir E.J. Reed, an MP from Cardiff, and an ex-Chief
Constructor of the Navy. Agarwal 1973 p. 183.
recommendation by the Royal Commission on Loss of Life at Sea 1874, the Parliament
enacted the Merchant Shipping Act 1890 which was “an Act to amend the Merchant Shipping
Acts relating to Load-Line.” Under this Act a British ship could not proceed to sea until steps
were taken by the owners to have her marked with a load-line approved by the Board of
Trade.
The fixing of a safe load line for cargo vessels was indeed a big event in the history of
merchant shipping. It provided a remedy to the age-old problem of dangerous overloading
and above all equipped the State with a Table of Freeboards with which it could secure the
obligation of ship-owners to load their ships in relation to their seaworthiness and not merely
in relation to a desire to earn freight. With respect to passenger ships, too, the load line was
fixed by the Board of Trade in 1891.
With the advent of new technology in the science of naval architecture added to the
structural strength of vessels. The ships built in twentieth century contained a higher degree
of seagoing efficiency and seaworthiness than that found in the vessels built in about 1885
when the Tables of Freeboards were adopted. This improvement in the vessels suggested that
some modifications might be made in the 1885 Table of Freeboards. Another factor which
stimulated such a modification was that in 1903 Germany adopted Tables of Freeboards
which differed from the British.
Beside modifying the Table of Freeboards to allow new types of steamers to load
more deeply, the Merchant Shipping Act 1906 widened the scope of application of Load Line
Regulation. This Act subjects foreign ships in the ports of the UK to comply with law relating
to marking of load lines. As a result, the master of the ship was required to mark his ship in
accordance with the British law and was liable to be fined upto ₤100 for committing any
offence in relation to such marking.
In the interest of safety, foreign ships were subjected to British Rules as to Load
Lines, but these rules were not applicable to British Ships when in foreign ports. In
otherwords, if a foreign court were to decide whether a British ship were overloaded or not,
the court would not determine this on the basis of the British Rules. (Case: veritas –(1931),
53 F. (2d) 847 at 851; 60 F. (2d) 273), Agarwal (1973) p. 188)
Hence it was felt appropriate to adopt an international convention on this matter. The
International Convention on the load line was first adopted in 1930.
The subject of fixing a ‘Uniform maximum Load-Mark’ was first given some
attention by the International Marine Conference held at Washington in 1889 but this
conference did not go into detail stating that it ought to be left to the negotiations to be
carried on between the Governments of maritime nations. In about 1913-14 an International
Convention on the subject of load lines was due in London, but it could not be held because
of the outbreak of First World War. After this it was not until 1930 that this Conference could
be held. The Conference adopted the first convention on load lines which was signed by forty
States on July 5, 1930 in London. The Convention applied to all merchant ships both
passenger and cargo vessels. It provided for the surveying and marking of merchant ships by
their respective State who should thereupon issue “International Load Line Certificates”. The
Convention came into force on January 1, 1933 between fifteen countries. The UK amended
its law and incorporated the convention in its Merchant Shipping Act 1932.
It required that the load line ship should not be so loaded as to submerge in salt water
the appropriate load line indicating the maximum depth to which she was for the time being
entitled to be loaded under the Load Line Rules. It made it an offence to take or send a ship to
sea when so loaded that her load line was submerged.
The Act of 1932 place absolute liability on the ship-owner and the master for
submersion of the load line with the fine of ₤100 “for every inch or fraction of an inch by
which the appropriate load line on each side of the ship was submerged, or would have been
submerged if the ship had been in salt water and had had no list.”
In the course of time the above penalty was found to be very low and did not operate
as a deterrent to overloading. It was observed that despite these penal provisions, overloading
was done because of extra freight so earned exceeded the amount of fine.
The International Load Line Convention 1966
It was adopted to bring the 1930 Convention up to date. The constant technical
progress in the art of ship-building stimulated a revision of conditions for assignment of
freeboards. In modern times ships are constructed by the process of welding and not by the
process of re-vetting, as a result of which hulls are made stronger than ever before. Further,
the old wooden hatches are now replaced by steel hatces which add to the strength of the ship
and also render them watertight. Beside this, the scientific approach to the question of load
line suggested that the load line should not depend on the tonnage of the ship but on its
length. Thus the 1930 convention needed to be up-dated. The Tables of Freeboards laid down
under it were required by the shipping industry to be revised.
In March 1966, the Inter-Governmental Maritime Consultative Organisation (IMCO)
called for a conference in London to study and revise the 1930 Convention. The Conference
approved and adopted the International Convention on Load Lines, 1966. The representatives
of sixty nations signed the Convention on 5 April 1966 in London. It came into force on 21st
July 1968.
The State can make legislation and punish the guilty in an effort for securing
seaworthiness of the vessels but it is the ultimate responsibility of the ship-owner and of the
master in sending the ships to see in a seaworthy condition. The need for having such a
legislation at all times cannot be disregarded as it has proved to be a useful weapon in the
hands of the State averting the dangers of unseaworthy ship in their jurisdiction. With this
legislation, there is thus secured an increase in the means of ensuring safety of life at sea,
albeit, by forcibly stretching the duties and responsibilities of the ship-owner and his agents.
Any shortcoming or failure on their part is punishable under the punitive sections of the
above legislation. A negligent owner might be censured and a ship’s officer’s certificate
might be suspended, cancelled or lowered in grade.

LIABILITY IN CASE OF COLLISION AT SEA

The rule of Maritime Law with respect to the liability of ship-owners for collision at
sea is that “the ancient general law exacted a full compensation out of all the property of the
owners of the guilty ship”15for causing damage or injury to property and life at sea. At
common law, a ship-owner was liable to pay full compensation for personal injuries if caused
on board his ships to passengers due to: a) negligence of ship-owners servants b) in case of
collision—to the crew and passengers of other ships. The ship-owner was liable only for
personal injury and he is not liable in case of death because of the law ascribed by the maxim
“Action Personalis Moritum Cum Persona” i.e. a personal right of action dies with the
person. But the spate of railway accidents after the introduction of railway led to the repeal
of the above rule by the introduction of the Fatal Accidents Act, 1846. The right of action for
the benefit of the dependants of the deceased was recognized for the first time. This Act
entitled to bring an action for pecuniary loss suffered by certain specific dependants, in cases
where the deceased, had he survived, would have had a maintainable cause of action. The Act
also gave discretionary right to the Jury for the award of damages. This discretion of Jury was
wide. In assessing the damages they would inter alia take into account the station of life of
the deceased and the loss of his services to the dependants. In the circumstances, the ship-
owner had no means of knowing the extent of his liability.(Agarwal 1973 p.135).

15
Lord Stowell in the case The Dundee(1823), 1 Hagg. Adm. 109, 113. see Agarwal, 1973 p. 126.
 The ship-owners thought that the 1846 Fatal Accidents Act would prove ruinous to
them. Those who were engaged in passenger traffic were especially alarmed by the operation
of the 1846 Act. In the case of a collision or other accident, if a passenger ship was lost with
all or board, there was the likelihood of their facing a large number of claims of unlimited
liability. They might be required to pay damages awarded in all such claims regardless of the
fact that their total liability exceeded the value and freight of their ships. This possibility did
in fact alarm ship-owners and they constantly made earnest representations to the House of
Commons for the purpose of limiting their liability both in the case of personal injuries and
loss of life.
LIMITATION OF LIABILITY FOR SEA GOING SHIPS
Although the above rule provided compensation to the sufferer, it proved prejudicial
to ship-owners. The owner even of a well-manned seaworthy ship could hardly cope to avoid
entirely claims being brought against him in respect of damage caused by his ship or by
reason of death or injury caused to persons on board. Loss or damage in such cases might be
substantial and its payment could mean the ruination of the ship-owner. Hence law provided
him with some relief by giving him the right to limit his liability for losses or damages or
injury which occurred “without his actual fault or privity”. “To protect the interest of those
engaged in the mercantile shipping of the State, and to remove terror which would otherwise
discourage people from embarking in the maritime commerce of a country, in consequence of
the indefinite responsibility which the ancient rule attached upon them”(Lord Stowell). The
Merchant Shipping Act, 1854 section 504, limited the liability of ship-owners in respect of
personal injuries and loss of life to the value and freight of their ships (Agarwal, 1973).
It is to be observed that that the 1854 Act was a consolidating Act, it reproduced the
law of limitation of liability contained in the statute of 1734, 1786 and 1813. As a result it
became possible to set out the limits of liability in respect of almost all forms of actions in
one single section. (Agarwal 1973).
The rule of limiting liability of a ship-owner to value and freight of his ship was
prevalent in Holland as early as 1625 and also in Italy and in Mediterranean trade but it was
introduced in Britain only in 1734 (Agarwal, 1973).
In 1733, ship-owners belonging to the port of London, several merchants and other
persons petitioned to Parliament for limitations of their liability to the value and freight of the
ship. In that petition they said that the English ship-owners were at a disadvantage in
competition with foreign ship-owners who had the benefit of limited liability under their
laws. The petition was successful in its effect. It led Parliament to adopt the principle of the
limitation of liability and as a consequence to pass the Responsibility of Ship-owners Act,
1734. this act was passed because “it is of the greatest Consequence and Importance to the
Kingdom, to promote the Increase of the Number of Ships and Vessels, and to prevent any
Discouragement to Merchants and others from being interested and concerned therein”. This
Act tended to restrict the principle of limitation of liability to specific causes such as robbery
and embezzlement and did not extend it to the case of collision. This omission was made
good with the passing of the Act to limit the Responsibility of Ship-owners in certain cases,
1813 was applicable only to British ships and that too if the collision takes place within three
miles of British territory. It was not afforded to foreign ship even if collision took place
within the said three miles. The Court of Admiralty upheld unlimited liability in case of
collision between British ship and foreign ship in the High Seas. This position was altered
after the coming into force of the Merchant Shipping Act 1862.
The limits of liability being the value of the ship and her freight, always involved
litigation as to the value of the ship at the time of loss or damage especially in the cases of
collision. Bad and inferior ships had an advantage, in case of collision whereas the good and
valuable ships liabilities were greater. In such circumstances some of the owners of passenger
steamers were discouraged from continuing their trade. They preferred to shift to cargo trade
where they thought that, in the event of an accident, they would be saved from multiple
claims on account of personal injuries and loss of life. This encouraged unprincipled ship-
owners to employ inadequate and worn-out vessels in the conveyance of passengers and this
disturbed the passengers. Hence the modification of these limits were considered by the 1860
select Committee of the House of Commons. The Select Committee thought that in the
interest of fairness to both large and small ship-owners, the amount available for damages
should be ascertained by a statutory rate of certain sum per ton of the GRT of the ship, rather
than the actual value of the ship and her freight. All consideration as to freight was to be
abandoned. The Committee’s recommendations were accepted and incorporated in the
Merchant Shipping Act, 1862 which fixed the value of ships and extended the benefit of the
limitation to both British and foreign ship-owners in the event of a collision on the high seas.
The 1862 Act repealed the 1854 Act and provided new measure of liability. This Act
provided that the maximum sum for which a ship-owner could be held liable was ₤15 per ton
for loss of life and personal injury; and ₤8 per ton for loss of or damage to ships and goods.
Where there were claims for both the former claim fell upon ₤7 (the greater sum minus the
smaller) per ton, and if this fund was not sufficient they ranked pari passu with the latter
claims against ₤8 perton in respect of the balance unpaid out of the ₤7 per ton.
 This limits became unrealistic in the twentieth century, due to fluctuations in the value
of pound sterling. It was reported in the parliament that during 1950-56, claims which were
proved and allowed amounted to nearly two million pounds but that the actual amount paid
out to the parties was on ₤396 because of the outdated liability limit. In the absence of an
International convention relating to liability of ship-owners, foreigners seeking redress in the
English courts often had complaints. The Admiralty courts in England applied the Lex fori in
all cases of liability, while the continental courts favoured the law of the place of defendant
belonged.
This problem of the conflict of laws became centre of attention in 1897 with the
foundation of the International Maritime Committee.16 The subject of the unification of laws
relating to limitation of liability was constantly considered by the Committee at several
conferences. A draft convention in this respect was considered in 1913, and in 1922 and in
1924 the convention for the Unification of Certain Rules relating to the Limitation of
Liability of Owners of Seagoing ship came into being. However, it received only limited
support from the British Ship-owners and the parliament never ratified it.
The subject was looked afresh in a Diplomatic Conference in Brussels in Oct 1957
and the Conference adopted a Convention Relating to the Limitation of the Liability of
Owners of Seagoing ships in 1957. The Convention prescribed the rates for calculating the
value of the ship in terms of gold francs. The Convention was signed on behalf of the UK and
seventeen other maritime nations on 10th October 1957. The Convention was promptly
ratified by Parliament, and the Merchant Shipping (Liability of Ship-owners and others) Act
1958 was passed.
This Act substitutes for the former monetary rate of ₤15 and ₤8 the equivalent of
3100 gold francs and 1000 gold francs respectively. The Board of Trade may from time to
time by order made by statutory instrument specify the amounts which are to be taken as
equivalent of the amounts specified in gold franc. This arrangement is provided to keep step
with changing currency value. This Act has increased substantially the scope of limitation of
liability in respect of claims for loss of life or personal injury, claims for damage to property
including harbour works, basins and waterways, and claims for wreck raising charges. The
right to limit no longer depends on negligence and it is no longer confined solely to an act or
omission in the navigation and management of the ship. Moreover, the right to exclude or
limit liability is given to charterers, persons interested in or in possession of the ship,

16
This was a volutary association founded with the official support of the Belgian government in 1897 and
consisted of jurists, from most of the seafaring countries, with the knowledge of maritime affairs.
managers, operators, masters and members of the crew in addition to the first claimant—the
ship-owners. This provision protected the owner who was also the master of the vessel and
whose negligence caused the loss or damage. Formerly, such an owner was not entitled to
claim the limitation—a situation which afforded the plaintiff to hold him responsible to the
full extent of the loss or damage, and thus render the law of limitation of liability ineffective
to certain extent. (Agarwal, 1973 p.151).
INTERNATIONAL CONVENTION RELATING TO LIMITATION OF
LIABILITY OF THE OWNERS SEA-GOING SHIPS, 195717
Whereas in case of accident or collision, there is no such contractual relationship but
governed by international conventions. Limitation of liability was pressed for mainly by ship-
owners in case of collision of ships occur and such collisions are not governed by contract.
The liability for such loss is unlimited under the law of torts and common law. Hence the
ship-owners struggled hard to get these rules passed at the international level. This rule has
made it possible for the ship-owner to claim limitation even for tortuous liability (Khodie,
1977).
Originally the limits of liability consisted of the actual value of the ship and freight
earned during the voyage in which the accident occurred.18 These limits proved to be unjust
to the owners of the ships of large value earning large freights. Further, the implementation of
the limits gave rise to difference of opinion as to what constituted the actual value of the ship.
To obviate these difficulties, the limits were recast (Agarwal, 1973). This time it consisted of
the value of the ship to be fixed in accordance with the statutory rates as applicable to the
case. With little modification, this form of the limits of liability was reinforced by
International Convention relating to Limitation of Liability of the Sea-going ships, 1957.
India adopted this convention in 1970 by incorporating its contents through amendment in the
principal Act of 1958.
This convention limits the liability of certain persons for loss of life or personal injury
to any person being carried in the vessel or loss of or damage to any property on board the
vessel. Under this convention the persons entitled to limit their liability are: a)ship-owner b)
charterer, manager, operator or the vessel c) Master and members of the crew d) other

17
Done at Brussels, on October 10, 1957.
18
A Rule limiting liability of ship-owner to the value of goods and freight was prevalent as early as 1625, it was
made available in England in the year 1734.
servants of the ship-owner, charterer, manager or operator acting in the course of their
employment.19
Under this convention the ship-owners, charterer, manager or operator of Vessel are
entitled to limit their liabilities only when it can be proved by them that they were not guilty
of fault or privity whereas the master and members of the crew are an exception to this rule.20
Without this exception, the privilege granted under this convention would become
meaningless because invariably the act, neglect or default of the master and crew member
contribute to the occurrence giving rise to the claim.
In 1974, the Legal Committee of the IMCO examined the 1957 Convention suggested
for enlarging the above list of beneficiaries to include pilot (compulsory or otherwise) and
salvor. Khodie argues that the pilot should be allowed to limit his liability because he does
not supersede the master in the command of a vessel, but acts as his adviser.
The ship-owner cannot limit his liability in case of a) removal of wreck b) damage to
Harbour Works c) Salvage or general average and d) Claims of the master or crew or any
servant of the ship-owner governed by foreign law.
The ship-owner was given the right to limit the liability to the value of ship and the
freight for property and personal claims described therein. These limits of liability presented
difficulties at the time of ascertaining the amount of liability. The issue regarding the value of
ship used to become an important source of litigation and expense.
The concept of statutory value of ship for the purpose of limitation of liability has
come to be established by the 1957 convention. Calculation of the limits of liability on the
basis of the tonnage is well established. The tonnage to be taken as the basis of the owner’s
liability is that appearing on the ship’s register in force at the time of the collision, and neither
party is entitle to benefit of any subsequent register. The liability tonnage for the purpose of
ascertaining the statutory value of the ship is the net registered tonnage plus the tonnage
accountable to engine room.
The maximum statutory liability under the convention is 3100 gold franc per ton of
the ship. When an accident occurs and the ship-owner anticipates numerous claims which
may be more than the statutory liability limit, he may straight away file a petition for
limitation of his liability. If the total actual liability of the ship-owner as established in
various suits, say, $ 10,000,000. The tonnage of ship is, say, 20,000 tons and under the 1957

19
Article 6 (2) of the convention.
20
Article 6(3) provides that “when actions are brought against the master or against members of the crew such
persons may limit their liability even if the occurrence which gives rise to the claims resulted from the actual
fault or privity of one or more of such persons.”
convention, the total liability of the ship-owner could be limited to 3100 gold franc per ton of
the ships tonnage i.e. the liability could be limited to 20,000 multiplied by 3100.
Although the law gave to the owner this right to limit liability, it did not give it
completely free of all conditions. Thus, side by side with the right of limited liability can be
found growing the obligation of the owner to send his ship to sea in a seaworthy and safe
condition.
COMMON LAW LIABILITY
This rule of unlimited liability was said to have been imposed to safeguard against the
danger of theft by the master and crew or collusion between them and thieves. It appears that
ship-owners were content to recognize their obligation as it stood at Common Law, at least in
that they used to make it term of their contract in bills of lading or charter-parties that the
would deliver the goods in the same condition in which they were received. However, it was
not unusual for them to exclude their liability by incorporating wide exception clauses in
those instruments. These clauses, commonly known as ‘expected perils’, whenever
effectively incorporated into the contract, relieved the ship-owner from the sever liability at
Common Law, but otherwise the liability remained unlimited.
Under Common Law the ship-owner was absolutely liable for the safety of goods
while they remain in his custody, that meant that the ship-owner was accountable to the cargo
owners for all the loss and damage even if there was no negligence on his part (Bartle R.,
1963). It was held that the reason being that the carrier was in total control of the goods and
had the total knowledge of the circumstances in which cargo was damaged and the cargo
interest were not in a position to know what happened to their goods once it left the shore
(Riley v. Horne (1828) 5 Bing. 217). This position was well accepted in those times that a
common carrier that received certain goods for transportation undertook the responsibility of
transporting it without any loss or damage.
The ship-owners later, contracted out the responsibility, first, for genuine causes, such
as—loss damage caused by an act of God, a public enemy, inherent vices of the goods, fault
of the shipper or in situation where goods had been made the subject of a general average
sacrifice (Common law exemptions or law of torts). Then later claimed such exemption for
unjust causes, such as—carriers own negligence or the unseaworthiness of the vessel. Such
bills of lading were described as a “surrender instrument” granting the carrier a position of
virtual irresponsibility.
Legal recognition of this economic conflict between cargo owners and ship-owners
did not come until about middle of the 19th century with the beginning of the age of steam
propulsion and iron ships. The operations of wooden sailing ships were family based and
town based where the cargo were owned at least in part by the ship-owner himself and the
ships were partly owned by the owners of cargo. The voyage was described as a joint venture
by the ship-owners and the cargo-owners. Large manufacturing plants were yet to be built.
At common law, the carrier was considered a bailee of the goods entrusted into his
custody and was completely responsible for the safe delivery against all risks (Carl E.
McDowell, 1954). By the end of 19th century the courts started recognizing the fact that there
must be something to limit the carriers’ liability (Liver Alkali Co. v. Johnson (1874) L.R. 9
Ex.338) and provided for certain exception to the absolute liability, such as, act of God and
Queens enemies and also made provisions that the ship-owners can limit his liability in the
bill of lading. Later, this became general maritime law principle, which both common law
and civil law countries recognized and accepted. By then it came to be held that a carrier was
absolutely liable for cargo damage unless proved that: (1) the carriers’ negligence had not
contributed to the loss and (2) one of the four excepted clause (act of God, act of public
enemies, shippers fault or inherent vice of the goods) was responsible for the loss. If one of
the four exceptions applied, the carrier was liable only if it had been at fault, but in all other
cases it was liable without fault. It could be seen here that the law evolved from absolute
liability (no fault liability) to strict liability (fault based liability) by the end of the 19 th
century. But the British courts applied this principle only in the absence of an agreement to
the contrary between the parties and the British courts upheld that the ship-owners could limit
his liability in the bill of lading. The powerful British ship-owners invariably inserted clauses
in the Bills of lading exonerating themselves from any liability and the British courts upheld
the concept of “Freedom of Contract”, whereby the shipper and the carrier could agree to
allocate risk in whatever proportion, including the one in which the carrier assumed virtually
no liability even for their own negligence. The ingenuity of the ship-owner resulted in
frequent insertion of clauses exonerating himself from liability in respect of cargo on board
the ship. This affected the rights of third party such as a bank, or endorsee of the bill of
lading, who landed up with goods lost, short landed or damaged for which the carrier had
exonerated himself from responsibility by specific terms in the bill of lading.
Most European and commonwealth countries eventually followed the British
example. Majority of ship-owners were from Great Britain and they were rich and powerful
and hence they just exonerate themselves from any liability what-so-ever for transporting the
cargo.
 The carriers’ responsibility merely consisted in putting up a sea-worthy vessel to sail.
If it developed trouble during the voyage—even if the crew contributed to the defect by
faulty navigation—the shipper bore the loses in goods, just as the carrier suffered damage to
the vessel. Sometimes in the interest of saving the ship from sinking the captain had to dump
valuable cargo into the sea to make the vessel light enough. Here the understanding was that
on safe landing the passengers would dole out some cash contribution to meet the losses of
the shipper (General Average).
Such were the days of high adventure21 coupled with total immunity from liability of
the carrier for loss or damage to goods during sea voyage. But things changed with the
improvements in merchant navigation. The technological development in the shipping
industry, and the disappearance in the 19th century of the pirates and privateers, brought about
a complete swing of the pendulum in carrier responsibility.
The US Harter Act 1893
In the US, on the other hand, cargo interest were stronger, and bill of lading contract
provision freeing the carrier from liability for negligence were held to be against public
policy because they lessened the incentive to care for the cargo properly hence freedom of
contract was stricter. The federal courts permitted to limit their liability in many
circumstances, but carriers could not exonerate themselves from the consequences of their
own negligence or their failure to provide seaworthy ship.
The pattern of sea trade generated by the US and its involvement in the maritime
industry is very different from that of Europe. In the early nineteenth century the US held a
strong position in shipping and ship-building, but the disruptions of the American Civil War
coincided with the steel ship-building revolution in the 1860s. There was a rapid and largely
unopposed expansion of European domination, and the US’s involvement in the international
maritime scene gradually faded. By the early twentieth century the US had only a small fleet
trading overseas and depended heavily on the fleets of other nations to carry its foreign trade.
The attitude of the organized and powerful British ship-owners—the P & I Club,22
called for the United State to step in to protect the interests of the unorganized shippers.
Several countries unilaterally enacted domestic legislation regulating the exoneration clause

21
There was a time when sea voyage was considered high adventure. The carrier of goods had to face during the
voyage the fury of nature and man: perils of the sea, piracy, privateers, public enemies, etc. Small crafts carrying
precious cargo were the natural targets. Carriage of cargo in such circumstance was risky. When the whole ship
and crew faced such risks it would have been mean on the part of the shipper to expect the carrier to make good
losses or damage to goods during the perilous voyage. The carrier thus enjoyed total immunity.
22
The first modern P & I Club—the steamship owners’ Mutual Protection and Indemnity Association—was
formed in 1874.
in the bills of lading. The US took the lead in the domestic regulation of exoneration clauses.
The US congress through Harter Act intervened in the contractual relations between cargo
owning interest and shipping interest. It was said to be the forerunner of all cargo liability
regime.
In 1892, a Congressman Michael Harter of Ohio introduced a bill, which came to be
known as Harter Act that strongly favoured the cargo interest. This was the time when 87%
of the US cargo was carried by foreign flag ships, chiefly by British ships. Moreover, because
of the exculpatory clauses in the Bill of Lading the American cargo owners could not claim
for the loss or damage to their cargo due to the common law principle “right to contract” or
“freedom of contract.” The British Courts upheld the concept of “freedom of contract”
whereby the shipper and the carrier could agree to allocate risk, in whatever proportion,
including the one in which the carrier assumed virtually no liability even for its own
negligence.
The British stood supreme in shipping in the 1800s, is possessed almost half the
aggregate world tonnage of merchant vessels. The British courts were securing their interest
by upholding the “freedom of contract” principles for the ship owners.
The immediate need for the statute was a decision of the US Supreme Court in
Liverpool & Great Western Steam Co. v. Phoenix Insurance Co.23 that dramatically altered
the shipper-carrier relationship. Powerful and organized British ship-owners24 responded to
the US Supreme Court decision by inserting ‘forum selection clause’ (London) and ‘law
selection clause’ (British Law) in the bill of lading which defeated the American courts
decision invalidating the ship-owners negligence clause. Moreover, the British Courts were
protective of ship-owners in upholding exculpatory clauses. Hence the US congress acted to
protect American public policy by enacting Harter Act—a compromise or package deal
between conflicting economic interests. That is the compromise between the common law
rule of full liability and the contractual practice of no liability. The Act made it unlawful for
the owner of a vessel transporting goods from or between ports of the US and foreign ports to
insert in any bill of lading or shipping document any clause, covenant, or agreement relieving

23
129 U.S. 397 (1889). Facts of the case: Cargo carried aboard the British ship Montana from New York to
Liverpool was lost when the vessel went aground near Holyheadwales. The subrogee cargo insurer sued the
carrier to recover the damages allegedly caused by the carrier’s servant’s negligence. The carrier defended on
the basis of a bill of lading clause exculpating the carrier from liability for its own negligence. The court came
forward to protect to cargo interest which was relying on the British ships to carry on the US foreign trade.
24
The British ship-owners organized themselves as P&I clubs and Liner Conferences, the first conference of
liner shipping service (the Calcutta Steam Traffic Conference) was created in 1875.
the carrier from liability for loss or damage arising from negligence, fault or failure in the
loading, stowage, custody, care or proper delivery of the merchandise.
The Harter Bill dealt with carrier’s exculpatory clauses in the bill of lading, while
introducing the bill it was stressed that it “seeks to give our citizens some protection against
foreign ship-owners”(presumably the British ship-owners). Harter Act 1893 was the world’s
first legislative attempt to allocate the risk of loss in ocean transportation between carrier and
cargo interests. In its original form, the bill strongly favoured cargo interests. This bill was
viewed as a trade protection measure, particularly for grain and flour (cargo) interest. Senate
Commerce Committee cleared the bill; there were amendments to every section. The net
result was a compromise between cargo and carrier interests, although the prime purpose
remained the protection of American cargo interest from British Ship-owners.
The Harter Act prohibited: a) any contract provision lessening the ship-owners’
obligation to exercise due diligence to prepare the ship properly for her voyage and make it
seaworthy b) the ship-owner from contracting away liability for his employees negligence in
the loading, stowage, care, custody or delivery of the cargo but if the damage or loss caused
to the cargo was due to ‘nautical fault’ by the master or the crew of the ship then the ship-
owner was exempted from liability but this exemption was applicable only if he had
previously discharged his duty of due diligence in providing a seaworthy ship.
Other countries where cargo interests were strong followed the US lead and
unilaterally enacted Harter style domestic legislation governing exoneration clause in bills of
lading. New Zealand’s Shipping and Seamen Act 1903, Australia’s Sea-Carriage of Goods
Act 1904, Canada’s Water Carriage of Goods Act 1910 and French-Morocco’s Maritime
Commercial Code 1919. Similarly Japanese commercial code invalidated agreements
exonerating a ship-owner from liability for damages caused by ship-owner himself, or willful
act or gross negligence of the crew or any other employee or by the fact that the ship is
unseaworthy (Sturley, 1991 p.6).
New Zealand, Australia and Canada were the overseas Dominion of British Empire
where the cargo interest was powerful enough to move their government to enact legislation
similar to Harter Act. They were large exporters of raw materials. These countries believed
shippers were not being treated fairly by carrier interest in the mother country. But the ship-
owners were politically powerful in Great Britain. In response to cargo interests complaints
on the subject, the overseas dominions pressured the Imperial government to co-ordinate
Harter-style legislation for the entire British Empire. In 1917 the Dominion’s Royal
Commission, after hearing evidence from shippers and ship-owners in the UK and the self-
governing dominions recommended such legislation. In 1920, the British Prime Minister in
consultation with colonial authorities and the Dominion governments appointed a committee
to consider the matter. In February 1921 the Imperial Shipping Committee issued its report. It
unanimously concluded, “that there should be uniform legislation throughout the Empire on
the lines of the existing Acts dealing with ship-owners liability.”
Prior to this, the International Law Association (ILA)25 in 1882 at its Liverpool
Conference prepared a draft of Model Bill of Lading; the guiding principle behind the draft
was the need for a compromise between cargo and vessel interests. The central element of
this compromise was that the carrier should be liable for negligence “in all matters relating to
the ordinary course of voyage” such as stowage and care of the cargo, but should be exempt
from liability for “accidents of navigation” even though loses might be attributable to the
negligence of the crew. In addition, the draft introduced the concept of carriers obligation to
exercise “due diligence” to make the vessel seaworthy, provided for ₤100 package limitation
in the absence of declaration of higher value. This model Bill of lading came to be known as
“Conference Form” never achieved general acceptance. Hence the ILA temporarily
abandoned the Conference Form in 1885 and proposed a set of rules known as “Code of
Affreightment” this also had little impact.
The subject of “International regulation of foreign bills of lading” was raised in the
Comité Maritime International (CMI)—an unofficial descendent of ILA (Sweeny, 1993,
p.29)26 by the US Maritime Law Association in 1912, it did not yield any result, but the same
resurfaced when the “Voluntary Clauses for bills of lading” had been prepared in 1921 by the
ILA and the British Maritime Law Association. The British Maritime Law Association
brought the issue into the ILA after the Imperial Shipping Committee recommendation in
February 1921. The ILA held its next conference at the Hague in September 1921, to arrive at
uniform rules regulating the shipper-carrier relations, and the Maritime Law Committee met
in separate session and unanimously adopted the “voluntary code” came to be known as
Hague Rules 1921. The ILA Diplomatic Conference in Brussels 1922 transformed the
voluntary Hague Rule 1921 into mandatory form and adopted the same in the “International
Convention for the Unification of certain rules relating to the Bill of lading” which was

25
The International Law Association then known as the Association for the Reform and Codification of the Law
of Nations. Founded in 1873.
26
The CMI grew out of ILA in 1896. In 1897 several national “Association of Maritime Law” joined together
to create the Comité Maritime International persuaded the Belgian government to sponsor the first diplomatic
conference on Maritime Law, held in Brussels 1905. CMI has produced over twenty Brussels convention
involving maritime law, drafting conventions embodying a uniform law in a particular area.
signed in Brussels in August 1924 at a conference attended by 26 nations.27 The Hague Rule
came into force in 1931.
These rules deal with contractual relationship between the carrier and the shipper.
Essentially, they establish the carriers’ responsibilities and liabilities, and also his rights and
immunities under the contract of carriage. The countries which have adoped the Hague Rules
have given statutory force to these rules by national legislation called “Carriage of Goods by
Sea Act” (COGSA).28
Indian COGSA

The carriage of goods by sea is governed by the Indian Carriage of Goods by Sea Act
(COGSA), 1925 and other laws.29 The Indian COGSA, 1925 is an instrument that gives the
Hague Rules the force of law in India; the Hague rules, in India, apply only to ‘outward’ bills
of lading30 and coastal trading. Although the Hague Rules are embodied in the Indian
COGSA, 1925 India never became a party to the International convention laying down those
rules.31 The above act merely followed the UK Carriage of Goods by Sea Act, 1924.32

International law relating to bill of lading has progressed—the Brussels Protocol of

1968 adopting the Visby Rules or adopting the Hamburg Rules33—but Indian Legislation has
not, however, progressed. The Hamburg Rules prescribe the minimum liabilities of the carrier
far more justly and equitably than the Hague Rules, so as to correct the tilt in the latter in
favour of the carriers. The Hamburg Rules are acclaimed to be a great improvement on the
Hague Rules and far more beneficial from the point of view of the cargo owners. India seems
to be lagging behind, as compared to other countries in ratifying and adopting, the beneficial
provisions of various conventions intended to facilitate international trade.

27
The Hague Rules 1921 were given effect by the ‘International Convention for the Unification of certain Rules
relating to Bills of lading’ in 1924. League of Nations Treaty Series, vol. CCX, at 157.
28
The UK Carriage of Goods by Sea Act 1924, The Indian Carriage of Goods by Sea Act 1925 and The US
Carriage of Goods by Sea Act 1936.
29
In India, carriage of goods by sea are governed by: the Indian Bills of Lading Act, 1856; the Indian Carriage
of Goods by Sea Act, 1925; the Merchant Shipping Act, 1958; and general statutes. They are: Marine Insurance
Act, 1963; the Contract Act, 1872; the Evidence Act, 1872; the Indian Penal Code, 1860; the Transfer of
Property Act, 1882; the Code of Civil Procedure, 1908; the Criminal Procedure Code, 1973; the Companies Act,
1956; etc., as well as the general principles of law such as the law of tort, public and private international law
etc.
30
Section 2 of Indian Carriage of Goods by Sea Act, 1925 provides that the Act applies only to outward
shipment.
31
International Convention for the Unification of Certain Rules of Law relating to Bills of Lading,
Brussels, 1924.
32
The UK repealed the Carriage of Goods by Sea Act, 1924 with the view to incorporating the Visby
rules adopted by the Brussels Protocol of 1968. The Hague-Visby Rules are adopted by the Carriage of Goods
by Sea Act, 1971 in the UK. The latest law in place governing is Carriage of Goods by Sea Act in England,
1992.
33
The United Nations Convention on the Carriage of Goods by Sea, 1978.
 The Indian COGSA, 1925 does not provide for responsibility of the carrier prior to
loading and subsequent to discharge for loss caused to the cargo in his custody. Ship-owners
have been taking advantage of this situation by introducing clauses in bills enabling them to
avoid liability for loss caused to the cargo, while it is in their custody before loading and after
discharge. However, the Indian Courts have come to the rescue of ill-fated cargo-owners by
invoking provisions of Indian Contract Act, by simply treating the ship-owners as bailee34
(Venkatramiah, 1973).

Under the Indian COGSA, 1925 as it followed the Hague Rules, the deck cargo was
not considered to be ‘goods,’ but the modern shipping technology such as containerization,
requires the goods to be carried on the deck. This created tremendous inconvenience to the
shippers but now the position has changed, after the enactment of the Multimodal Transport
of Goods Act in 1993, which brought about changes in the COGSA 1925.

Bills of lading are usually prepared on the instructions and the directions of the
carrier. These are modeled on the standard forms supplied by associations of ship-owners or
liner conferences. Generally, the Bill of lading contains a Jurisdiction clause, which provides
that claims arising from the contract of carriage should only be brought in a designated
forum. These clauses are so devised as to promote the interests of the carrier, especially, to
suit his convenience in presenting his defence against cargo-owners’ claims for loss or
damage to cargo. Indignation has been often expressed by cargo owners against these clauses
for the reason that, the forum specified in the bill of lading causes great inconvenience to
cargo-owners, and thereby impede the full and fair presentation and adjudication of claims.
The attitude of Indian courts towards the ‘jurisdiction clause’ can be described by the
principle laid down by the Calcutta High Court:35

34
The requirements of bailment are: that there must be a contract between two or more persons; that it should be
preceded or followed by delivery of goods by the bailor to the bailee; that such a delivery is intended for a
specific purpose to be carried out by the bailee; and that bailee undertakes to return or dispose of the goods
according to the directions of the bailor, as soon as the purpose is fulfilled. A bill of lading for carriage of goods
by sea conforms to these requirements of bailment. Hence a ship-owner is a bailee of the goods entrusted to him
for carriage of goods by sea. When once the goods are delivered to carrier, whether they are actually loaded on
the ship or not, he should be held responsible to any loss caused to cargo owner, so long as the goods are in his
custody. The amount of care which a bailee (in this case the ship-owner) is expected to take in respect of the
goods in his custody, is in no way less than that which an ordinary prudent person takes of his own goods of
similar type under similar circumstances. If he is allowed to escape from his responsibilities by protection
clauses, such clauses will definitely operate as great hindrances in the development of international sea trade.
35
Laxminarayan Ramniwala v. Lloyd Triestino Societa her Azinni Di Navigaziene Sede in Triesta and
others (AIR 1960 Cal. 155) and Swedish East Asia Co. Ltd. v. B.P. Herman and Mohatta (India) Private Ltd.
(AIR 1962 Cal. 601).
 “… Parties cannot by a private agreement, whether such agreement has been
entered into in India or outside India, take away a jurisdiction which is vested in this
Court to try the suit just as the parties could not by such agreement confer upon it
jurisdiction to try case which it had otherwise no jurisdiction to try.” (Venkatramiah,
1973).

The above discussed defects in the Hague rules are overcome in the Hamburg rules,
but India did not become party to the Hamburg Rules, which were negotiated for the benefit
of developing countries. The reason is not known why India did not sign the Hamburg
Rules.36

Admiralty Courts Act 186137

A foreign vessel, no matter what flag she flies, owes temporary and local allegiance to
the sovereign of any port to which she comes. And the persons in such a vessel likewise must
obey the laws and regulations of the port. Such jurisdiction is discretionary. Once a foreign
vessel passes out of territorial waters, who owes no further duty to the port she has left unless
under ‘hot pursuit’. But her conduct on the high seas or in foreign ports may subject her to
penalties on returning on a subsequent visit.
All foreign merchant ships and persons thereon fall under the jurisdiction of a coastal
State as they enter its waters. Subject to the “right of innocent passage”, the coastal State is
free to exercise jurisdiction over the ships in respect of matters the consequence of which
extend beyond the ships. Such ships are subject to the local jurisdiction in criminal, civil, and
administrative matters. This jurisdiction is assumed only when, in the opinion of the local
authorities, the peace and tranquility of the port is disturbed, when strangers to the vessels are
involved or the local authorities are appealed to. Questions which affect only the internal
order and economy of the ships are generally left to the flag states. Coastal States are entitled
to assume jurisdiction in respect of maritime claims against foreign ships lying in their
waters. These the ships are arrested and detained for the enforcement of maritime claims. The
court of the country in which a foreign ship has been arrested may determine the cases
according to merits, provided they are empowered to do so by the domestic law of the
country. the maritime claim in respect of which the power of arrest is recognized in law,

36
The Hamburg Rule was concluded under the Chairmanship of Indian representative Dr. R.K. Dixit. I had met
him personally and asked him as to why India did not sign the Hamburg Rule for which he replied that it was
government’s decision not to sign that treaty.
37
The 1861 Act is sought to be amended by the Admiralty Bill 2005, if this Bill is passed then it would
consolidate and amend law relating to the admiralty jurisdiction of courts, legal proceedings in connection with
ships, their arrest, detention and sale and matters connected therewith or incidental thereto.
include claims relating to damage caused by any ship either in collision or otherwise; claims
relating to carriage of goods in any ship whether by charterparty or otherwise, loss of or
damage to goods etc. These principles of International law, as generally recognized by
nations, leave no doubt that, subject to the local laws regulating the competence of Courts, all
foreign ships lying within the waters of State, including waters in ports, harbour, roadsteads,
and the territorial waters, subject themselves to the jurisdiction of the local authorities in
respect of maritime claims, and they are liable to be arrested for the enforcement of such
claims.
The statute in India for arresting defaulting ships is the Admiralty Courts Act 1861.
There are no separate Admiralty courts as such in India but a special jurisdiction of admiralty
has been granted to the High Courts at Calcutta, Madras and Bombay which has a maritime
purpose, different from that of common law.38 The Admiralty jurisdiction of the High Courts
at Calcutta, Madras (Chennai) and Bombay (Mumbai) were the same as the Admiralty
jurisdiction of the High Court in England at the time of the enactment by the British
Parliament of the Colonial Courts of Admiralty Act 1890.39 The purpose of the Act of 1890
was not to incorporate any English statute into Indian law, but to equate the admiralty
jurisdiction of the Indian High Courts over places, persons, matters and things to that of the
English High Court.
After India attained independence,40 the Indian Parliament has so far not exercised its
powers to make laws with respect to Admiralty and thus the three Indian High Courts were to
apply Admiralty laws as it was applied by the English Court of Admiralty as defined in the
Admiralty Court Act, 1861. The Law relating to admiralty jurisdiction has changed many
times over the period in England41 but India is still holding on to the antiquated Act of 1860

38
By the end of the seventeenth century the admiralty jurisdiction in England was restricted, it was not as
extensive as compared to other European maritime countries due to a long standing Controversy in which the
common law courts with the aid of the Parliament had succeeded in limiting the jurisdiction of admiralty to the
high seas and as such excluded admiralty jurisdiction from transactions arising on waters within the body of a
country.
39
under subsection (2) of the said Act, and subject to the provisions thereof, over the like places, persons,
matters and things as the Admiralty jurisdiction of the High Court in England, whether existing by virtue of any
statute or otherwise and exercised in the like manner and to as full an extent as the High Court in England
having the same regard as that court to international law and the comity of nations. The subsequent extension of
the Admiralty jurisdiction of the High Court in England by statutes passed after that date by the British
Parliament, the Administration of Justice Act and is, 1920, re-enacted by the Supreme Court of Judicature
(Consolidation) Act, 1925, is not shared by the said three High Courts.
40
The fact that the High Court continues to enjoy the same jurisdiction as it had immediately before the
commencement of the Constitution, as stated in Art. 225.
41
The authority and power exercised by the High Court in England, the width of which was not confined
to the statute but went deep into custom, practice, necessity and even exigency. The jurisdiction of the High
Court of Admiralty in England used to be exercised in rem in such matters as from their very nature would give
rise to a maritime lien - e.g. collision, salvage, bottomry. The jurisdiction of the High Court of Admiralty in
(Thacker 2004). Hathi (2005) agrees that there is a lack of legislative exercise at the same
time he argues that there is no reason to think that the jurisdiction of the Indian High Courts
have stood frozen and atrophied on the date of the Colonial Courts of Admiralty Act, 1890.42
Courts’ admiralty jurisdiction is not limited to what was permitted by the Admiralty Court,
1861 and the Colonial Courts of Admiralty Act, 1890 but the High Court, Subject to its own
Rules, in exercise of its manifold jurisdiction, which is unless barred, unlimited. To the extent
not barred expressly or by necessary implication, the judicial sovereignty of this country is
manifested in the jurisdiction vested in the High Courts as superior courts. It is true that the
Colonial statutes continue to remain in force by reason of Art. 372 of the Constitution of
India, but that do not stultify the growth of law or blinker its vision or fetter its arms.
Legislation has always marched behind time, but it is the duty of the Court to expound and
fashion the law for the present and the future to meet the ends of justice.43
The arrest under the 1860 Act comparatively has very restrictive grounds. A suit
against a foreign ship owned by a foreign company not having a place of residence or
business in India is liable to be proceeded against on the admiralty side of the High Court by
an action in rem in respect of the cause of action alleged to have arisen by reason of a tort or
a breach of obligation arising from the carriage of goods from a port in India to a foreign
port.
Moreover India has not adopted the international conventions such as 1952 Brussels
Arrest Conventions44nor the Brussels conventions of 1926 and 1967 relating to maritime liens
and mortgages. Most maritime countries have adopted a statute based on the Brussels
Convention. Under foreign statutes adopting the convention, when Indian ships sails to those

England was, however, extended to cover matters in respect of which there was no maritime lien, i.e.,
necessaries supplied to a foreign ship. In terms of Section 6 of the Admiralty Act, 1861, the High Court of
Admiralty was empowered to assume jurisdiction over foreign ships in respect of claims to cargo carried into
any port in England or Wales. By reason of Judicature Act of 1873, the jurisdiction of the High Court of Justice
resulted in a fusion: of admiralty law, common law and equity. The limit of the jurisdiction of the Admiralty
court in terms of Section 6 of the 1861 Act was discarded by the Administration of Justice Act, 1920 and the
jurisdiction of the High Court thereby was extended to (a) any claim arising out of an agreement relating to the
use or hire of a ship; (b) any claim relating to the carriage of goods in any ship; and (c) any claim in tort in
respect of goods carried in any ship.
42
The Admiralty jurisdiction exercised by the High Courts in Indian Republic is still governed by the
obsolete English Admiralty Courts Act, 1861 applied by (English) Colonial Courts of Admiralty Act, 1890 and
adopted by Colonial Courts of Admiralty (India) Act, 1891 (Act XVI of 1891). Yet there appears no escape
from it, notwithstanding its unpleasant echo in ears. The shock is still greater when it transpired that this state of
affairs is due to lack of legislative exercise.
43
There is, therefore, neither reason nor logic in imposing a fetter on the jurisdiction of those High Courts
by limiting it to the provisions of an imperial statute of 1861 and freezing any further growth of jurisdiction.
This is even truer because the Admiralty Court Act,1861 was in substance repealed in England a long time ago.
44
International Convention Relating to the Arrest of Seagoing Ships or the International Convention on
Certain Rules concerning Civil Jurisdiction in Matters of Collision, both signed at Brussels on 10 May 1952.
countries, our vessels get arrested, while on the other hand when foreign vessels come to
Indian ports and claims are brought against them by Indian plaintiffs, our courts apply the
restrictive jurisdiction under the Admiralty Courts Act 1861 quite often defeating on
technicalities, a good case on merits, thus making the plaintiffs helpless, as the courts
jurisdiction is based on the antiquated law of 1861 (Thacker, 2004 p. 63). For example, under
this antiquated act, a sister vessel of the defaulting vessel cannot be arrested as security for
claim. Under the 1952 Arrest Convention, any vessel from the entire fleet of the defaulting
vessel can be arrested for claim against the defaulting vessel. It is also observed by Justice
Thomman that there is no law in India presently defines “maritime claims” and this state of
affairs is due to lack of legislative exercise.45
This antiquated act is proposed to be replaced by a new act—the Admiralty Bill 2005
has been drafted.46 If this Bill is passed, would virtually bring India on par with leading
jurisdiction like England, Singapore etc. It is to be noted that under 1861 Act, Indian vessels
are not liable to be arrested for: a) Necessaries b) cargo claims. This bar has been removed.
Under the 2005 Admiralty Bill, claims arising out of general average act is maintainable. A
specific provision is now introduced for arrest of a ship for port dues because very often
Indian entities provide lighterage and stevedoring services to foreign vessels and have no
means of recourse for unpaid dues. The mode and procedure of a sale through the court has
been specifically defined. The concept of ‘sister ship’ has been recognized which is not there
in the 1861 Act.
The 2005 Admiralty Bill seeks to repeal age old admiralty laws47 and seeks to enlarge
the cope of the legislation to cover claims pertaining to pollution damages, loss of life,
personal injury, towage of ships, pilotage of ships, port dues, disbursement made by the ship
owners and agents of ships.
Moreover the Parliamentary Standing Committee48 recommended that the High
Courts should be conferred pan-Indian admiralty jurisdiction which would facilitate the
courts to take out writ in rem and warrant of arrest which can be served or executed anywhere
in India for that purpose there should be a centralized registry where information regarding

45
in m.v. ELIZABETH v. Haryan Trading 1992 (2) SC 65.
46
The Admiralty Bill was drafted in 1998, but was not passed. A new Bill 2005 is been introduced in the
parliament.
47
i. the Admiralty offences (Colonial) Act, 1849, the Admiralty Jurisdiction (India) Act, 1890, the
Admiralty Court Act, 1861, the Colonial Courts of Admiralty Act, 1890, the Colonial Courts of Admiralty
(India) Act, 1891 and Patents relating to High Courts of Bombay Calcutta and Madras.
48
Department Related Parliamentary Standing Committee on Transport, Tourism and Culture, 99th
Report on the Admiralty Bill, 2005. presented to the Rajya Sabha on 21 st March 2006.
admiralty proceedings such as caveats against arrest of a vessel are shared with or
instantaneously accessible by other High Courts, so as to avoid any duplication of effort and
confusion.49 This would facilitate the claimant e.g. that after the vessel has sailed the security
or bail proves to be inadequate, he need not follow the vessel to which ever port it enters and
file admiralty suit in different High Courts thus this process would avoid multiplicity of
cases.
Under the 2005 Bill, all Indian vessels irrespective of the nature of the claim are liable
to be proceeded against, provided 6 days notice in writing is served on the owner stating the
cause of action. One important point to be noted that the 6 days notice period is not available
for foreign ships.

The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (The Admiralty
Act) came into force in India on the 1st April 2018. Almost six months to the day that the Act
came into force, India provides the UK P&I Club with his thoughts on whether the new Act
has bedded in well, what improvements this highly ambitious Act has brought about and what
issues remain outstanding. The Admiralty Act has been a much awaited legislation to codify
the rules and practices relating to enforcement of Maritime Claims and Liens, and arrests, in
India, as well as to incorporate and codify the principles of International Conventions into
Indian Law.

Background
The Admiralty Act repeals the archaic laws which had been applicable in India, namely the
Admiralty Courts Act, 1840; Admiralty Courts Act, 1861; the Colonial Courts of Admiralty
Act 1890; Colonial Court of Admiralty (India) Act, 1891 and provisions of the Letters Patent,
1865 pertaining to the Admiralty Jurisdiction of the Bombay, Calcutta and Madras High
Courts.

The Admiralty jurisdiction hitherto being vested in, and exercised by the High Courts of
Bombay, Madras, Calcutta, concurrently over vessels wherever they may be in the
territorial waters of India, as also vested in and exercised by the High Courts of Andhra
Pradesh, Gujarat & Kerala, over vessels in those states’ waters, has by the Admiralty Act
now been conferred upon the High Courts of all coastal states in India, including
Karnataka, Telangana, and Odisha, in addition to the above mentioned High Courts, over
vessels which are found within the State waters of the respective states, and consequently
their High Courts. Accordingly, the concurrent jurisdiction being exercised is a thing of the
past, and it would be the concerned State’s High Court within whose waters the vessel should
be found when the Suit is instituted that will have jurisdiction, irrespective of the place of
residence or domicile of the Owner. Accordingly, an Indian vessel can also now be arrested
in India for enforcement / recovery of a maritime claim.

The Admiralty Act aligns Indian laws with the International Conventions for Arrest of Ships,
1952 and 1999 as well as the International Convention on Maritime Liens, 1993; and

49
This is the position in Australia where there is centralized national admiralty court registry is
maintained with the Federal Court.
provides for the adjudication of identified maritime claims, provision of security for such
claims, arrest of vessels, and so on.

Improvements and clarifications

Previously, “vessel” / “ship” had not been defined, and by case law was understood to mean
‘anything which was capable of navigation’. The Admiralty Act now defines “Vessel” in
Section 2 (1) (l), to include any ship, boat, sailing vessel or other description of vessel used or
constructed for use in navigation by water, whether it is propelled or not, and includes a
barge, lighter or other floating vessel, a hovercraft, an off-shore industry mobile unit, a vessel
that has sunk or is stranded or abandoned and the remains of such a vessel. The Explanation
to this section specifically excludes a vessel that is broken up to such an extent that it cannot
be put into use for navigation, as certified by a surveyor.

This puts to rest the issue which was the subject of numerous applications pending before the
Courts challenging arrests of dumb barges, offshore units etc. on the grounds that they are not
“Vessels”. This also puts to rest the position where a single Judge of the Bombay High Court
had held that a vessel arriving India for the purposes of breaking ceases to be a vessel
capable of being proceeded against and arrested in an Admiralty Suit for enforcement
of a maritime claim. Until such time the vessel is beached and broken to such an extent that
it is incapable of navigation as certified by a surveyor, she can be proceeded against for
enforcement of maritime claims, and arrested.

Section 4 of the Admiralty Act sets out a list of Maritime Claims in respect whereof, the
High Courts can exercise their Admiralty Jurisdiction. The list of Maritime Claims are similar
to the Maritime Claims defined under the International Convention in relation to the Arrest of
Sea-Going Ships 1952 and the International Convention on the Arrest of Ships, 1999.
However, the Admiralty Act incorporates the following additional claims as Maritime
Claims in relation to which a vessel can be proceeded against and arrested. They are
claims related to port or harbor dues, canal, dock or light tolls, waterway charges and
such like; particular average claims; claims by master or crew or their heirs/
dependents for wages, cost of repatriation or social insurance contributions; insurance
premiums, mutual insurance calls; commission/ brokerage agency fees payable by vessel
owner or demise charterer; environment damage claims or threat thereof; and wreck
removal claims. Thus, the Act widens the Indian Admiralty Jurisdiction for vessel arrests as
compared to the scope under the International Conventions.

Although the claims under the Admiralty jurisdiction is enlarged, the enforcement of the
Maritime Claims by an action in rem has been narrowed down under the Admiralty Act.
Arrest of vessels owned by Time Charterers and Voyage charterers in respect of Maritime
claims against them is conspicuously absent from the new Act; i.e. Article 3 (2) of the 1999
Arrest Convention, does not find a place in the Admiralty Act; which gives rise to issues in
this behalf and in relation to enforcements of maritime claims against time/voyage charterers
in India.
Section 5(1) of the Admiralty Act inter alia provides that a vessel can be arrested only if :
i. Person who owned the vessel at the time when the maritime claim arose is liable for the
claim and is the owner of the vessel when the arrest is effected; or
ii. The demise charterer of the vessel at the time when the maritime
claim arose is liable for the claim and is the demise charterer or the owner of the vessel when
the arrest is effected; or
iii. Any other vessel in lieu of vessel above, subject to the provisions of (i) and (ii) above.
The above provision of the Admiralty Act and its divergence from the Arrest Conventions
has led to questions/ issues relating to arrest of ships / sister ships for claims against time
charterers, which issue is presently pending for decision before the Bombay High Court.

Section 5(2) permits sister-ship arrests. But, what a sister-ship is, would be subject to Section
5(1). Consequently, beneficially owned ship arrests, is not permissible in India.

Section 6 of the Admiralty Act also confers Admiralty Jurisdiction in personam in respect of
certain Maritime claims, subject to certain restrictions as contained in Section 7. Under
Section 7, for claims arising out of a collision and related claims, an in personam action can
be initiated against the Defendant only if the cause of action, wholly or in part arises in India,
or if the Defendant, at the time of commencement of the action actually and voluntarily
resides or carries on business or personally works for gain in India.

For the first time in India, by legislation, the Admiralty Act defines ‘maritime lien’ under
section 2(1)(g) and recognizes certain claims as Maritime Liens; and sets out their priorities
in Section 9. The Admiralty Act also specifies the period of limitation for Maritime Lien,
and states that the maritime lien shall stand extinguished after expiry of one year unless the
vessel is arrested / seized and such arrest / seizure has led to a forced sale by the High Court.
However, in respect of Maritime Liens relating to claims for wages or other employment
related payments, including cost of repatriation and social insurance contributions, the
limitation period is two years. The period of limitation would run continuously without any
suspension or interruption, except the period during which the vessel was under arrest or
seizure which time is to be excluded.

Likewise, the Admiralty Act also provides for priority of Maritime Claims in Admiralty
proceedings in Section 10. Maritime Liens have the highest priority, followed by registered
mortgages and charges, and thereafter all other claims. If there are more than one claim in
any single category of priority, they shall rank equally and salvage claims rank in inverse
order of time to when the claims accrued.

The Admiralty Act empowers the High Court to order the Plaintiff seeking an order of arrest,
to provide counter security either at the time of arrest or to continue an arrest. This provision
for the Plaintiff to provide security is to cover the vessel / owner in the event the arrest is held
to be wrongful or unjustified or excessive security has been demanded, or provided.
Presently, Plaintiffs give a written undertaking to the Court under the Admiralty Rules, to
pay such sums that the Court may award as damages in case any party sustains any prejudice
by the order of arrest of the vessel being obtained by the Plaintiff. Under the Admiralty Act,
in addition to such written Undertaking under the Rules, Court can order the Plaintiff to
furnish security (which would be a cash deposit or a Bank Guarantee in Court), which has
been introduced to curtail wrongful arrests and/or demands for excessive security, which
would be beneficial to vessel owners.

The High Court is empowered to auction and sell a vessel that has been abandoned by the
owner within 45 days of such arrest or abandonment, which may be extended by a further
period of 30 days for reasons to be recorded by the court in writing. This would obviate an
indefinite wait for the vessel to be sold by the court post arrest with no one entering
appearance for the vessel and/or arranging her release.

Outstanding issues and anomalies

The Act provides for Rules to be framed for the purposes of the Act, which are as yet till date
to be framed. Until such times as the Rules are framed and notified in the Official Gazette,
the existing Rules of the relevant High Court shall continue to be applied as appropriate.

Although the Admiralty Act is the first step towards codification of the Admiralty jurisdiction
and related practices and rules followed under Indian law, the Admiralty Act has led to
certain anomalies which are yet to be addressed by the Legislature or the Judiciary. One such
issue is in respect of the retrospective application of the Admiralty Act under Section 17 (2)
which provides that all admiralty proceedings pending in any High Court immediately before
the commencement of the Admiralty Act, are to be adjudicated by such court in accordance
with the provisions of the new Act. There is no savings provision in the Admiralty Act that
protects proceedings initiated before the Admiralty Act came into existence on 1 April 2018.

Another issue is that by virtue of the Admiralty Act, the issue of whether a dumb barge can
be arrested and whether the Court can exercise its jurisdiction over Indian vessels is put to
rest. However, by operation of Section 17, all such pending applications are rendered
infructuous i.e. pointless. This issue is yet to be addressed by the Courts or the Legislature.

Likewise there are other issues and teething problems. For example, some of the coastal High
Courts have never exercised and/or dealt with Admiralty cases before the advent of the
Admiralty Act and would have to put in place appropriate procedures for arrest etc., which is
still not done as of date (September 2018).

Courts would be called upon to address these issues in due course in appropriate cases, which
should then bring about more clarity and definitiveness to this new Act.

From the Admiralty Act, it would be noted that the same pertains only to arrest of vessels,
and does not permit arrest of cargo, freight or bunkers, under the Admiralty Jurisdiction of
the High Courts. Likewise, reading section 4 along with section 5 of the Act, in my view,
arrest of vessels for security in pending arbitrations or proceedings filed elsewhere, is not
permissible. This issue under the Admiralty Act, however, is presently being considered
before the Bombay High Court, and a decision is expected in due course.

In conclusion, while it has only been six months since the new Admiralty Act entered into
force, the Act has brought about some much needed clarification to the maritime law in India
albeit that many areas of the law still remain to be clarified and procedures still need to be
introduced and/ or refined. The Act is starting to achieve its main aims which are to
streamline procedures, clarify and iron out uncertainties and anomalies to make the previous
outdated maritime legal regime in India fit for purpose in a modern world.

Ship Arrest
Ship arrest is a process by in which a ship is prevented from trading or moving until the
matter in question is decided. It is an exclusive jurisdiction that is granted to an admiralty
court to detain a vessel to secure a maritime claim.

Article 2 of the International Convention Relating to the Arrest of Sea-Going Ships, 1952
defines the term arrest as the following:

"(2) "Arrest" means the detention of a ship by judicial process to secure a maritime claim, but
does not include the seizure of a ship in execution or satisfaction of a judgment."

Rationality

A ship arrest may be exercised under the authority of a court having admiralty jurisdiction,
for the following reasons:

 Loss of life
 Loss of property
 Salvage
 Collision
 Execution of a decree
 Violation of customs, usages, regulations or norms

Jurisdiction of Indian Courts

Before India gained Independence, under The Colonial Court of Admiralty Act, 1890, the
High Court of Bombay, Madras and Calcutta were the only judicial authorities competent to
deal with matters relating to Admiralty. The other courts of justice were restricted from
dealing with issues concerning the Admiralty. Under the Admiralty Courts Act, 1861, the
three presidency courts were vested with the same powers as that of the High Court of
England.

Section 35 of the Admiralty Courts Act, 1861 deals with the jurisdiction of Admiralty court,
and it reads as the following:

"35. The jurisdiction conferred by this Act on the High Court of Admiralty may be exercised
either by proceedings in rem or by proceedings in personam."

The Law relating to Admiralty jurisdiction is relevant even today under Article 372 of the
Constitution of India.

Therefore, in M.V. Elisabeth vs Harwan Investment and Trading, 1993 AIR SC 1014, the
question was whether a court having no admiralty jurisdiction could entertain a case relating
to Admiralty. The Supreme Court, in this case, widened the scope of admiralty jurisdiction in
India.

The Court held:

"Although statutes now control the field, much of the admiralty law is rooted in judicial
decisions and influenced by the impact of Civil Law, Common Law, and equity. The ancient
maritime codes like the Rhodian Sea Law, the Basilika, the Assizes of Jerusalem, the Rolls of
Oleron, the Laws of Visby, the Hanseatic Code, the Black Book of the British Admiralty,
Consolato del Mare, and others are, apart from statute, some of the sources from which the
Law developed in England. Any attempt to confine Admiralty or maritime Law within the
bounds of statutes is not only unrealistic but incorrect."

The Supreme Court made the following observation:

"The High Court in India are superior courts of record. They have original and appellate
jurisdiction. They have inherent and plenary powers. Unless expressly or impliedly barred,
and subject to the appellate or discretionary jurisdiction of this Court, the High Courts have
unlimited jurisdiction, including the jurisdiction to determine their powers."

Further, in this case, the International Convention for the unification of some rules regarding
Arrest of Sea-going Ships (The Arrest Convention), 1952 was also made applicable to India,
although it was not ratified.

Similarly, In M.V Sea Success case, the Supreme Court held that the principles laid down in
1999 Geneva Arrest Convention could be applied in India on matters concerning Admiralty.

In India, The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 was
enacted on 9 August 2017 to consolidate the laws relating to Admiralty. The Act
implemented, repeals all the outdated provisions relating to Admiralty.

As per Section 3 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act,
2017, the jurisdiction concerning admiralty matters shall be vested in the respective High
Courts, and the courts shall exercise their authority within the territorial waters of their
jurisdiction.

Therefore, now the scope of admiralty jurisdiction has been widened, and apart from the
presidency courts, the following courts (coastal regions) have jurisdiction to deal with
admiralty matters:

 High Court of Gujarat

 High Court of Andhra Pradesh
 High Court of Orissa
 High Court of Kerala

Permissible Claims

The High Courts' as discussed earlier, has the jurisdiction to entertain claims as provided
under Article 1 of the Arrest Convention, 1952 and Article 1 of the Geneva Arrest
Convention, 1999. Therefore, before the enactment of the Admiralty (Jurisdiction and
Settlement of Maritime Claims) Act, 2017, the claims were as provided under the
conventions as discussed earlier. However, now the Law relating to Maritime claim is
provided under section 4 of the Admiralty (Jurisdiction and Settlement of Maritime Claims)
Act, 2017.

Section 4 of the Act reads as the following:

"The High Court may exercise jurisdiction to hear and determine any question on a maritime
claim, against any vessel, arising out of any

 a dispute regarding the possession or ownership of a vessel or the ownership of any

share therein
 dispute between the co-owners of a vessel as to the employment or earnings of the
vessel
 mortgage or a charge of the same nature on a vessel;
 loss or damage caused by the operation of a vessel
 loss of life or personal injury occurring whether on land or on water, in direct
connection with the operation of a vessel
 loss or damage to or in connection with any goods
 agreement relating to the carriage of goods or passengers on board a vessel, whether
contained in a charter party or otherwise
 salvage services, including, if applicable, special compensation relating to salvage
services in respect of a vessel which by itself or its cargo threatens damage to the
environment
 pilotage
 goods, materials, perishable or non-perishable provisions, bunker fuel, equipment
(including containers), supplied or services rendered to the vessel for its operation,
management, preservation or maintenance including any fee payable or leviable;
 construction, reconstruction, repair, converting or equipping of the vessel;
 dues in connection with any port, harbour, canal, dock or light tolls, other tolls,
waterway or any charges of similar kind chargeable under any law for the time being
in force
 claim by a master or member of the crew of a vessel or their heirs and dependents for
wages or any sum due out of wages or adjudged to be due which may be recoverable
as wages or cost of repatriation or social insurance contribution payable on their
behalf or any amount an employer is under an obligation to pay to a person as an
employee, whether the obligation arose out of a contract of employment or by
operation of a law (including operation of a law of any country) for the time being in
force, and includes any claim arising under a manning and crew agreement relating to
a vessel, notwithstanding anything contained in the provisions of sections 150 and
151 of the Merchant Shipping Act, 1958 (44 of 1958)
 disbursements incurred on behalf of the vessel or iparticular average or general
average
 dispute arising out of a contract for the sale of the vessel
 insurance premium (including mutual insurance calls) in respect of the vessel, payable
by or on behalf of the vessel owners or demise charterers
 commission, brokerage or agency fees payable in respect of the vessel by or on behalf
of the vessel owner or demise charterer
 damage or threat of damage caused by the vessel to the environment, coastline or
relate interests; measures taken to prevent, minimize, or remove such damage;
compensation for such damage; costs of reasonable measures for the restoration of the
environment actually undertaken or to be undertaken; loss incurred or likely to be
incurred by third parties in connection with such damage; or any other damage, costs,
or loss of a similar nature to those identified in this clause
 costs or expenses relating to raising, removal, recovery, destruction or the rendering
harmless of a vessel which is sunk, wrecked, stranded or abandoned, including
 anything that is or has been on board such vessel, and costs or expenses relating to the
preservation of an abandoned vessel and maintenance of its crew; and
 maritime lien

Procedure

The Law relating to the arrest of a vessel in rem is provided under Section 5 of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017.

Under the section, the High Court may order for the arrest of any vessel within its
jurisdiction, where there is a reason to believe:

 The owner of the vessel is liable for the claim, or

 The demise charterer of the vessel is liable for the claim, or
 The claim is based on a mortgage or similar charge, or
 The claim relates to possession or ownership, or
 The claim is against the owner, demise charterer, manager or operator of the vessel.

Once the claim has been decided, the claimant has to state the detailed facts, along with the
other particulars and must make application for the substantive suit. The Admiralty suit
should specify:

 The name of the claimant

 The name of the vessel
 Flag of the Vessel
 Details of the owner of the ship
 Facts relating to the dispute
 Grounds and
 Prayer

Once an arrest warrant is issued upon a vessel, the owner of the vessel has to appear and
settle the claim or challenge the arrest made. The vessel may be allowed to sail subject to
furnishing of security for the claim. At the default of the owner, the ship can be sold, and the
sale proceeds may be used to settle the claim.

Therefore, the Law relating to ship arrest is now well settled in India. The admiralty law is an
area of development, and it plays an inevitable role in protecting the citizens as well as
ensuring that no organization or individual violates the Law of the sea.

Alternate Remedies for Ship Arrest in Civil Claims Matters

For various specific maritime claims and liens a ship can be arrested under international
maritime legislations in various jurisdictions in action in rem. A ship can be arrested for both
in civil and criminal matters. In civil matters, when the ship could not be arrested for want of
jurisdiction, the creditors sought for alternate remedies from the court. Until 1970’s the
creditors did not have any other remedies except for getting the ship arrested. Alternate
remedies were evolved through judicial process (court orders and judgement), to secure the
interest of the creditor or the claimant.
In common law legal system the available alternate legal remedies are:
Injunction as equitable remedy
Mareva injunction
Mareva injunction with Anton Piller Order
Freezing Injunctions
Norwich Pharmacal Order
In civil law legal systems the available remedies are:
The principle of Saisie Conservatoire and Saisie-contrefcon,

This paper would discuss why alternate remedy is sought instead of ship arrest. The demerits
of ship arrest and whether the alternate remedies sought by claimants are effective tools to
surmount the demerits of ship arrest.
MARINE INSURANCE
Insurance of goods during their transit from the exporting country to the importing
country is an important incident in an international sale transaction. Marine insurance
contract is a contract whereby the insurer undertakes to indemnify the assured, in a manner
and to the extent agreed, against marine losses incident to marine adventure.
An unavoidable item of operating costs is insurance. A high portion of marine
insurance costs is determined by the insurance of Hull and Machinery (H&M), which protects
the owner of the vessel against physical loss or damage. H&M insurance is obtained from a
marine insurance company or through a broker who will use a policy baked by Lloyd’s
Underwriters.
Protection and Indemnity (P&I) insurance provides cover against third party liability.
The P&I insurance is obtained through P&I clubs, which secure ship-owners against injury or
death of crew members, passengers or third parties, pilferage or damage to cargo collision
damage, pollution and other matters that cannot be open insurance markets.
Marine Insurance means insurance against risks incidental to maritime adventures. It
is the oldest forms of insurance. With the growth of world shipping and world maritime trade,
marine insurance has assumed great importance and provides protection to the different buyer
and seller of goods, the banks and other financiers, etc. The law of marine insurance is based
largely on common law i.e. recognized customary commercial usages and practice. There is
not public international law governing marine insurance but many countries have enacted
national legislation to codify the important rules of law in this field. The relevant enactment
in India is the Marine Insurance Act, 1963. This closely follows the English Marine Insurance
Act 1906, except for some minor changes.
A contract of marine insurance is an agreement whereby the insurer undertakes to
indemnify the assured, in terms of the contract, against losses incidental to maritime
adventures. The consideration which the insurer receives for his undertaking is called the
premium. The pecuniary interest of the assured in the property or subject exposed to maritime
perils is called the insurable interest. Any person who is interested in a marine adventure may
have an insurable interest. Such insurable interest may be in respect of: a) any ship, goods or
other movable exposed to “maritime peril”50b) Freight, passage money, anticipated profit or
other pecuniary interest or the security for any advances loans or disbursements which is
endangered by the exposure of insurable property to maritime peril c) any liability to a third
party that may be incurred by the owner of, or other person interested in, the insurable
property by reason of maritime peril—e.g. incase of collision at sea.
In addition to cargo and hull insurance an important branch of marine insurance is
insurance of liabilities of ship-owners may incur to third parties. The third party may be the
owners of cargo or of other fixed or floating objects like wharves, piers, buoys, sub-marine
cables, pipelines, etc. or a member of the crew, a passenger or stevedore, or public
authorities—the port trusts, customs or immigration authorities, the breach of whose
regulations may attract penalty to be paid by ship-owners. With the advancement of transport
technologies like containerization, third party claims have been extended to cover loss or
damage to containers and liabilities to third parties arising out of the operation of containers
on land. It is common for ship-owners to cover such liabilities through P&I Club. It is non-
profit association or organization of ship-owners which provide against third party liabilities
on a mutual basis. The essential different between insurance market and the P&I club are: a)
The club cover is unique, in that the insurer is also the assured, because each member
contributes to the other member’s claims and gets contributions from the others to his claims
b) the market takes fixed premium while the clubs do not c) the market books for profit
where as the clubs are non-profit organizations d) the club covers unlimited liability it does
not prescribes maximum limit for insurance cover except in the case of pollution cover e) the

50
The term “maritime peril” means, the peril incidental to the navigation of the sea, i.e. perils of the sea, fire,
war perils, pirates, rovers, thieves, captures, seizures, restraints and detainments of princess and peoples,
jettisons, barratry, or other perils like kind which may be designated by the policy.
clubs not only provide insurance cover but also service which includes the handling of all
third party claims made against the member of which he is covered.
Indian ship-owners are permitted to continue to insure Protection and indemnity Risks
with any international P & I Club of their choice.
Liability for General Average Loss or Contribution may be covered by marine
insurance by means of a specific provision to that effect in the policy.