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Tuesday, April 24, 2012

SC refuses to stay release of MV Nordlake

There have been spate of accidents at sea getting reported on Newspapers – Enrica Lexie and Prabhu Daya were widely reported.  On 21st April 2012, a petition for Special Leave to Appeal filed  by the Union Govt came up for hearing and the Court observed that – ‘We do not see such an urgency in this matter to be taken up on a non-sitting day. Therefore, post the matter on Monday 23.04.2012)’

Then on Monday, The Supreme Court  refused to stay  Bombay high court order permitting a Cyprus merchant vessel MV Nordlake, to leave Indian shores after paying an amount equivalent to the ship's value.  The vessel would now be able to set sail from the Mumbai coast after a single judge bench of the high court accepts the final valuation report.  This in fact involves a high profile victim -  1058 crore valued INS Vindhyagiri.  Some digging of facts for understanding the victim first.

Commonly grouped as Frigates are several types of warships – of various sizes and hues.  In India, INS Nilgiri (F33) was the lead ship of her class of frigates. Commissioned on June 3, 1972 into the Indian Navy, she was decommissioned in 1996.  INS Nilgiri was the first major warship built in India keel up. It was built at Mazagon Docks Limited, Mumbai in collaboration with Yarrow Shipbuilders, Glasgow. The success of Nilgiri led to the Indian Navy along with Mazagon Docks redesigning the last two ships of the class - INS Vindhyagiri and INS Taragiri.  ‘Giri’ ships were all named after hill ranges of India.   Subsequent ships in the class are also named after the beautiful  hill ranges of India.

The victim of the collision - INS Vindhyagiri (F42) is a Nilgiri class frigate of the Indian Navy. Vindhyagiri was commissioned on 8 July 1981.  It is reported that on 30 January 2011, it collided with a Cyprus flag merchant ship MV Nordlake near Sunk Rock lighthouse at the entrance of Mumbai harbour at 3:30 pm. It is reported that several civilians including family members of the crew were on board at the time of the incident. No casualties were reported. A major fire broke out due to the collision which took more than 15 hours to control. It also caused a major crack in the hull of the ship.
On 31 January 2011, the ship sank due to the damage caused by the fire.  Due to flooding of its compartments, the ship touched the bottom. 

After the collision a  FIR was  lodged with Mumbai police and  the container vessel MV Nordlake was arrested and  held back in the Mumbai harbour.  A suit was filed in the Admiralty Court at Mumbai which was decreed on 7th March 2012.   The Suit had been filed seeking damages to the tune of Rs.1058.54 crores together with interest at 18% per annum from the date of suit till payment.  The defendants MS Nordlake GMBH had filed Admiralty Suit Lodging under part XA of the Merchant Shipping Act, 1958 to limit their liability in respect of claims of whatsoever nature in the aggregate of Rs.20,01,86,113/- being the limit prescribed by Part XA of the Merchant Shipping Act, 1958.

The vessel owners sought release of the vessel stating that the claim for damages was yet to be proved; it would ultimatelybe the value o the vessel which would be the governing factor and the valuation as on the date of sale would be the crucial aspect.  They prayed that upon furnishing security either up to the limitation claimed or up to the value of the vessel and vessel should be released as her condition would deteriorate in value if continued to be under arrest. 

On the other hand, on behalf of Union Govt it was contended that there is a strong triable case; the ship being foreign ship would be difficult to he held if it leaves Indian territorial waters and may not return to the jurisdiction of Indian courts. The claim thereby, even if successful, would remain unexecutable or land in trouble in private international law in its enforcement.

Thus the  Chief Justice at Mumbai had set aside the order dated 26 November 2011 of the learned Admiralty Judge and restore Notice of Motion No.1525 of 2011 on the file of the learned Admiralty Judge for the purpose of deciding the same after getting independent valuation of the arrested vessel.

Now comes the news that the Supreme Court refused to stay the release of  the container vessel.  Refusing the Centre's plea, a Bench of justices H.L. Dattu and C.K. Prasad, however, said it was “keeping open” a question of law on the issue and no interim order can be passed by it at this stage.  “We wonder how vigilant you are that your naval ship has been hit by a merchant ship,” the Bench asked, in response to Additional Solicitor-General Indira Jaising's plea to stay the Bombay High Court's order to release the Cyprus ship.

Will update more on the subsequent posts.

With regards – S. Sampathkumar.
24th April 2012.

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