Vessel collision: HC relief for MV Nordlake

Granting relief to MV Nordlake the merchant vessel that collided with the INS Vindhyagiri on January 30,2011 leading to a fire on the Indian warship the Bombay High Court on Wednesday held that in a suit for the release of an arrested vessel,an admiralty court cannot ask the vessel-owner to deposit a sum higher than the cost of the arrested vessel as security in court,if the damages sought are greater.

Granting relief to MV Nordlake the merchant vessel that collided with the INS Vindhyagiri on January 30,2011 leading to a fire on the Indian warship the Bombay High Court on Wednesday held that in a suit for the release of an arrested vessel,an admiralty court cannot ask the vessel-owner to deposit a sum higher than the cost of the arrested vessel as security in court,if the damages sought are greater.

The two ships collided at the Mumbai port last year. The Cyprus-flagged MV Nordlake was exiting the harbor as the Indian warship built in 1981 was trying to navigate its way in. A major blaze broke out on Vindhyagiri following the accident. There were no casualties.

After an order passed in an admiralty suit on February 23,2011,the Indian Navy had placed MV Nordlake under arrest. Its owners had sought the ships release after depositing Rs 46.87 crore,the value of the ship as assessed on April 7,2011.

Story continues below this ad

The Indian Navy had,however,claimed damages of Rs 1,058.54 crore at an interest of 18 per cent a year in the admiralty court. The MV Nordlake,however,said the suit for damages had not been proved yet and hence,its liability should be restricted to the cost of the ship. It also stated that the arrest of the vessel serves no purpose.

Additional Solicitor General D J Khambata,however,argued that under the Merchant Shipping Act,the entire amount of claims made by the Indian Navy would have to be deposited as security.

However,Chief Justice Mohit Shah and Justice R V More held that the Article Four of the International Convention for Arrest of Ships,1999,upheld by the Supreme Court,states that the amount of security should be the claim for which the ship has been arrested or the value of the ship,whichever is lower. Hence,in this case it would be the cost of the ship,Rs 46.87 crore,that would be lower.

. when value of the arrested vessel is less than the plaintiffs best arguable case in an Admiralty Suit for damages,the value of security which the Admiralty Court may call upon owner of the arrested vessel to furnish will not exceed value of the arrested vessel as independently assessed, the court ruled.

Story continues below this ad

The court asked the admiralty court to get the value of MV Nordlake assessed independently and pass the necessary order in the Indian Navys suit for damages.