Case Note & Summary
The appellant, Lufeng Shipping Company Ltd., a Chinese company, had a maritime claim of US$ 1,628,658.07 against respondent No.2, Whim Star Chartering Co. Ltd., arising from a voyage charter party agreement dated 6 April 2011. The appellant sought to arrest respondent No.1 vessel, M.V. Rainbow Ace, which was registered in the name of Rainbow Ace Shipping S.A. Panama, but allegedly beneficially owned by Wang Wendong, who also beneficially owned respondent No.2. On 28 January 2013, the vessel was arrested at the instance of the appellant. The owner of the vessel applied to vacate the arrest, and the learned Single Judge vacated the arrest on 6 May 2013, holding that the vessel was not owned by the charterer and therefore could not be arrested. The appellant appealed. The Division Bench considered the provisions of the International Convention on Arrest of Ships, 1999, which India follows. The court noted that Article 3(1)(b) of the Convention allows arrest of any other ship which is owned by the person who is liable for the maritime claim. The court found that the appellant had presented a chart and other evidence to show that Wang Wendong was the common beneficial owner of both the vessel and the charterer. The court held that the concept of beneficial ownership is recognized under the Convention and that the appellant had made out a prima facie case. The court allowed the appeal, set aside the order of the Single Judge, and restored the arrest of the vessel, directing the appellant to furnish security for damages.
Headnote
A) Admiralty Law - Arrest of Ship - Beneficial Ownership - International Convention on Arrest of Ships, 1999, Articles 1(f), 1(g), 3(1)(b) - The appellant had a maritime claim against respondent No.2 (charterer) under a voyage charter party. The appellant sought to arrest respondent No.1 vessel, which was not owned by the charterer but allegedly beneficially owned by the same person (Wang Wendong) who beneficially owned the charterer. The Single Judge vacated the arrest on the ground that the vessel was not owned by the charterer. On appeal, the Division Bench held that under the Arrest Convention 1999, a claimant can arrest a vessel beneficially owned by the person who is liable for the maritime claim, even if the vessel is registered in a different name. The court found that the appellant had made out a prima facie case of common beneficial ownership and allowed the appeal, restoring the arrest. (Paras 1-10)
Issue of Consideration
Whether a vessel can be arrested for a maritime claim against a charterer when the vessel is not owned by the charterer but is allegedly beneficially owned by the same person who beneficially owns the charterer.
Final Decision
Appeal allowed. Impugned order dated 6 May 2013 set aside. Arrest of respondent No.1 vessel restored. Appellant to furnish security for damages as directed by the Single Judge.
Law Points
- Admiralty jurisdiction
- arrest of ship
- beneficial ownership
- International Convention on Arrest of Ships 1999
- sister ship arrest
- maritime claim
- voyage charter party
